How To Open a Crypto Wallet -There is a lot of talk about cryptocurrencies and all that is related to it. Bitcoin, Ethereum and other digital currencies became very well known in 2017. Their price has exploded, making fortunes for people that have invested in it for a long time.
Bitcoin has increased its selling price by around 15 times in a little less than a year. Other coins have also experienced a fast rise in its prices. All of that is enough to attract a lot of attention to the cryptocurrencies. Many people are looking to invest in it, but don’t really know how to.
Although the profits have been great, it is a volatile market and can lead to losses too. The price of the coins vary a lot every day, or even in a matter of hours. That is why it is best to be well informed before starting to invest.
How to invest in Crypto?
There are virtual platforms that are used for trading cryptocurrency. Those are the digital exchanges. In those digital exchanges you can trade you fiat currency (Dollar, Euro) for cryptocoins or do the opposite. You can also trade your cryptocoins for other digital currency.
To use those exchanges you need to register first. You need to put your personal data and your method of payment. Some exchanges even accept credit cards. After that, you need somewhere to store the cryptocurrency that you acquire. That storage is called a crypto wallet.
A crypto wallet is something similar to your bank account. It is where you are going to keep your cryptocurrency. You can use it also to send and receive currency from other wallets or use it to do trading and even to purchase something.
The wallet is a safe place where you can keep your currency. Another great advantage of a crypto wallet is to quickly access your currency. That allows you to do actions fast and easily.
When trading on the same platform that is your wallet, you can do immediate trades and pay less fees.
There is also the option to purchase products and services. With the popularization of cryptocurrency, a lot of different establishments are accepting cryptocoins as payment. In that case, your crypto wallet would function as an actual wallet. It is like having your currency inside your pocket.
Different kinds of wallets
Wallets can be one of three kinds: hardware, software or paper. The software wallets are divided in other three categories: desktop, online or mobile. Let’s take a look on all of them.
• Hardware: These wallets have to be connected online to make transactions, but they keep your currency stored offline. That is a security advantage. Harware wallets can hold many different kinds of digital currency, it is up to you to decide what kind of currency you will want to store. There are many different options on the market. Usually, a hardware wallet is very similar to a USB drive.
• Online: It is a cloud based wallet. It can be accessed from any device in anywhere. You only need your password. They are the most practical wallets, but lack in security.
• Mobile: The mobile wallets are apps that can be downloaded on your phone. They are very practical, it is like carrying your actual wallet around. For using your wallet to pay at stores that accept cryptocoin, this is the best option.
• Desktop: You download your wallet to your computer. You can only access your wallet through the computer where it is downloaded. It is a very safe option, but still not as safe as Hardware wallets.
• Paper: Those are very secure wallets, but not as practical as others. First you create a wallet through a software, than you print out the “keys”. Those keys are like the address of your wallet. You can transfer your coins from your software wallet to your key wallet using the number on it. To take it out of the wallet, you can just type the numbers there are on the paper on the software to have access. You can also use a QR code.
Hot and Cold
You may see people calling crypto wallets hot or cold. Those terms are used to define the safety levels of the wallets. Basically, every wallet that is connected to the internet is “hot”, while the others are “cold”.
The wallets connected to the internet are called hot because their security levels are worse than the cold ones. Software wallets (desktop, mobile and online) are hot, while hardware and paper are cold.
So, are those wallets really safe? Well, as shown above, there are wallets that are safer than others. But even if you have a really safe wallet, it is good to take some precautions.
Try using wallets that are official or recommended by the companies that manage the different cryptocurrencies. They know which ones are better for their coins. Also, be careful with wallets connected to the internet. Always keep the software up to date, have solid passwords and invest in online security, like a good anti-virus.
You need a wallet to be able to use cryptocurrencies. So, try to pick a good one that can fulfill your needs. Always know if they can hold the currency you want and if they are secure. After finding a good wallet, you can finally enter the cryptocurrency market.