The world of cryptocurrency is opening up a lot of options for ordinary investors. Even if you’re not interested in mining for Bitcoin, you can turn a few investment dollars into quite a bit of crypto in a short amount of time. However, you’ll need a wallet to store your crypto as well as a trading platform.
What is it?
Like a paper wallet, a crypto wallet can hold onto your cryptocurrency. Depending on where you put the wallet, you can also withdraw crypto directly and buy products and services. According to the experts at SoFi Invest, your questions on ‘what is a cryptocurrency wallet?’ will make more sense if you focus on security instead of flexibility. Your crypto will be safer and more secure if you make it harder to get to; rather than buying directly with it, you can exchange it for fiat currency and just pay in cash, keeping your crypto in a secure, offline or “cold” wallet.
What are the different types of wallet?
You can install a desktop wallet on your computer which will give you a lot of control and limit your exposure and risk. From here, you can exchange, invest and trade Bitcoin in particular.
A mobile wallet can go anywhere your smartphone goes and allow you to buy directly from any vendor that accepts Bitcoins. Before installing this wallet on your phone, do your homework; it could put you at risk of malware.
Web wallets can be accessed from anywhere you can login online. Blockchain and Coinbase are popular web wallets. Be very careful with your password when setting up this web wallet. While you can access this wallet from your phone, you generally don’t have the option to purchase directly from this account.
You can store a hardware wallet on a thumb drive. This is an example of a cold wallet; unless it’s plugged in, it’s secure. Make your trades, save your data, and pull the drive to prevent theft by hackers.
How do you get one?
You can get a crypto wallet simply by setting up a trading account. You should find the option to store your crypto in a wallet tied to your trading account, though there may be a fee. If you want to be able to make purchases directly with your bitcoins, you’ll need a mobile wallet such as Hive Android or Mycelium Bitcoin Wallet. Again, it’s buyer beware. Tether your phone with care to avoid malware exposure.
If you are determined to build a sizable crypto portfolio, it’s a good idea to invest in a hardware wallet; simply purchase a removable device with the space to hold your bitcoin key and designate a safe location to store your drive.
When you’re first starting out, a wallet may not be necessary. However, as your crypto holdings expand, having a removable storage wallet will protect you from hacking and malware. Start small and work with a reputable exchange while you become accustomed to the volatility and excitement of cryptocurrency trading.