Even though cryptocurrencies like Bitcoin are not a physical thing that you can withdraw from an ATM, you do need a place to store this money. After all, it does not just blindly float around the internet waiting for you to access it. You need a secure place to store your stash of Bitcoin or any other cryptocurrency. Storing cryptocurrency is essential to success if you are going to engage in any kind of cryptocurrency transactions. This storage device is commonly referred to as the wallet. The wallet is where you store your personal cryptocurrencies. Now, there are different kinds of wallets out there, each of have different properties, some being better and more secure than others. It’s time for us to talk about everything you need to know about storing your cryptocurrency in your personal wallet.
Storing Cryptocurrency – The Wallet
The wallet, like we said before, is the place where you store your Bitcoins and other crypto-coins. Since Bitcoin and other currencies of this sort are not ensured by any banking or insurance institution, any wallet you use absolutely needs to be 100% secure. There are various ways of ensuring that your wallet is secure, with one of the main ways being with a key code or a password in layman’s terms. You and only you have access to your wallet through your personal key code.
This is indeed very secure, but it can also pose some problems. If you lose your code, you will have no way of accessing your wallet. Not having access to your wallet means that those coins are forever lost in the infinite sea of the web. You will never see those coins again if you lose your password. Also, these passwords or key codes can be stolen via hacking. If someone else gets a hold of your key and your wallet info, they can easily take all of the coins out of the account. This is why it is essential to never share your key with anybody.
Storing Cryptocurrency – Different Wallets
There are various storage methods that you can use to store your cryptocurrencies. The first type of wallet is the online web wallet which keep private keys secure on their servers. These online web wallets such as like Blockchain.info work pretty well, but they do come with certain risks of theft and hacking. However, they do not require you to have any personal storage space on your computer or otherwise. Next, there are hot wallets. Hot wallets are apps or programs that you have on your computer or smartphone, which connect through the internet. These application based wallets can be used to make transactions and to store small sums of cryptocurrencies, but they cannot be used to store the entirety of your cryptocurrencies. Both of these methods work just fine, but they are not the most recommended.
When it comes to storing cryptocurrency, we would recommend using a form of cold storage. Cold storage means that the coins are not stored on some kind of online cloud-like system or web based server. One of the most popular and secure cold storage methods is to simply use a USB drive, external hard drive, or some other such storage device. It’s easy, safe, and secure. Next, there is a thing called the paper wallet, which more or less resembles a bank note. This is actually just a piece of paper containing a password or code for redemption. They contain a certain amount of Bitcoins or other cryptocurrency, and once you enter the code to gain access to them. This method is not recommended as it is one of the less secure methods of storing cryptocurrency.
Next, there are also physical Bitcoins, which holds the Bitcoin’s public address and they key. These can come in the form of something that resembles a credit card and recently have taken the form of actual coins. Perhaps the most secure way of storing cryptocurrency is with a specialised cryptocurrency offline wallet. These resemble USB drives, but are designed with special security measures and are designed specifically to store Bitcoin and other cryptocurrencies. Most people would recommend using an offline hardware wallet as they tend to be the most secure of all. These are often refereed to as ledgers, with the more advanced versions actually having their own displays so you can check the balance without connecting it to your computer. All of the above listed storage methods are viable options, but some are better than others.
Storing Cryptocurrency – Traits Of A Wallet
Choosing which version and type of crypt-wallet you use can be a little difficult. Let’s go over some of the most important traits that you should look out for when choosing your own wallet for storing cryptocurrency.
- How much does the wallet cost? Is it free? Are there any commission costs? What are the drawbacks?
- Does the wallet choice you are going with have a good track record in terms of security?
- Is the wallet easily accessible? How easy is the wallet to use? Can you access it on your computer, phone, or other methods?
- Can the wallet of your choosing store more than one different kind of cryptocurrency?
- Can the wallet be used to make fast purchases or is there a lengthy transaction process involved?
- Does the style of the wallet suit your needs?
Storing Cryptocurrency – Some Recommended Wallets
Let’s take a look at some of the best, most modern, and most convenient options to go with for storing cryptocurrency.
- Keepkey is a relatively new company that has an awesome hardware wallet. This wallet has a really modern design and it comes with an easy to use user interface as well. The Keepkey hardware wallet is also known to be very secure. It’s a little bulky, but that is not one of our main concerns.
- Nano Ledger S is another well known and highly trusted hardware wallet option you can consider. The piece of hardware itself may not be all that fancy, but it is known for being one of the most secure options around, both in terms of physical and virtual theft. It’s a very small wallet, so keeping it in your pocket is no issue.
- Trezor is another good hardware wallet option to go with. When it comes to security, these guys have made it their goal to make the Trezor wallet the most secure far and wide. If security is a big concern of yours the Trezor is a good option to consider.
- Electrum is a software wallet that you can go with. This is a very versatile option that is also compatible with hardware wallets. It can store various kinds of cryptocurrencies and it’s known for being quite secure too.
- Jaxx is another good software wallet to go with. This one is actually designed for use with your mobile devices. It’s a very intuitive and user friendly storage app that can be used on your computer or mobile device.
- Coinbase is a good hot wallet option to go with. It’s a good option for storing cryptocurrency and for making transactions all with one slick online storage cloud. Coinbase is very secure, but the problem is that it only allows for the storage of Bitcoin and Ethereum.