Cryptocurrencies are growing both in overall use and acceptance in both the business world and among the public. With large banks and other respected finical institutions putting more resources and research into crypto it appears that digital currency and associated technologies such as the blockchain have a bright future ahead.
Every investor is looking to diversify their portfolio, and you may be interested in crypto and adding it to your existing investing strategies. However, crypto is a new technology and has its own unique features and methods that you have to learn to confidently make use of it. One such technology is the crypto wallet. Let’s take a look at what crypto wallets are and how to choose the best crypto wallet for your needs.
What Is a Crypto Wallet?
When trading cryptocurrencies you need a place to send your currency and that is your crypto wallet. In the simplest terms, a crypto wallet is a storage program that stores your coins. Crypto wallets are versatile they can be a program on your computer, stored on a flash drive, or accessed through an app on your smartphone.
To get more technical a crypto wallet also keeps records of your current balance and contains your paired public and private keys which are used to identify you specifically and track your sales and trades via the blockchain.
Crypto wallets also come in two different types hot and cold. A hot wallet is connected to the internet and ready for active daily use hence the term hot wallet. A hot wallet is a lot like your traditional wallet containing currency and ready to use. A cold wallet is not active and is not connected to the internet keeping your crypto safe and in cold storage. Cold wallets often take the form of thumb drives or USB devices.
A cold wallet is a lot like a saving account where money is stored but not intended for daily or immediate use. Many traders make use of both hot and cold wallets much like you would in traditional banking.
Picking a Crypto Wallet
There are many options for a crypto wallet and the best choice depends on what your goals and personal preferences are. Here are some things to consider when picking out a wallet.
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Type
ome people prefer to make use of web-based wallets and others like smartphone apps. Accessibility and security are things to consider as is how you access the internet. Many users gravitate towards smartphones due to on-the-go use and the fact their phones are often safely in their possession.
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Ease of Use
Some wallets are more complex than others you’ll have to compare of ease of use with features before making a choice. Also, be sure to look for features you consider valuable or ones you’ll be making common use of.
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Support
The best crypto wallets offer support teams to help you with your problems. Not every wallet has this and the last thing you want is to have no one to reach out to if you have a problem or concern.
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Coin Compatibility
There are thousands of cryptocurrencies being traded today. Not every wallet supports every type of cryptocurrency in fact some are so specialized they may only support one currency. Check to make sure the wallet you’re using supports the crypto types you want to use.
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Reputation
Finally, read reviews online, check social media, see what people are saying. High rankings, good reviews, and happy users are signs that a crypto wallet is well-made and well-supported.
Final Thoughts
Cryptocurrency is growing every year and the last few years, in particular, have seen rapid growth. This has not only led to an increase in value but an increase in usability. With more users and better-made apps trading and buying cryptocurrency is easier than ever.
Interesting related article: “What is Blockchain?“
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