You’ve just bought cryptocurrency, whether it’s Bitcoin, Ether, Bitcoin Cash, or any of the mainstream cryptocurrencies currently leading the market. You’ve used a cryptocurrency exchange and now you’re wondering where you’re supposed to keep your digital currency.
Cryptocurrency exchanges are generally considered secure but not ideal places to store your cryptocurrency. They are major targets for cybercrime, but they take several steps to make themselves securer places to store your digital currencies. A good cryptocurrency exchange will keep most of the coins stored with it in offline storage. About 80% of coins should be kept in cold storage and 20% available for trade and withdrawal. There are some concerns about cold storage that have come to light in recent months due to the passing of the QuadrigaCX founder, but exchanges should be learning a lot about contingency plans to prevent falling victim to the same flaws.
Using a cryptocurrency exchange is great if you trade regularly or if you plan to use cryptocurrency for regular transaction. Many cryptocurrency exchanges also charge transfer or withdrawal fees if you want to move your cryptocurrency off the exchange, though it’s generally a better idea to avoid these exchanges and use platforms that let you move your digital currencies for free.
In the long run, if you invest in cryptocurrency or use it regularly, you will want to invest in a wallet.
What type of cryptocurrency wallet do you need?
The two main categories of cryptocurrency wallets are hardware and software, also known as cold and hot. A software wallet is online and part of your mobile, desktop, or completely online. Software wallets are great if you want to keep your cryptocurrency online and easy to access. Regular traders or people who make purchase with Bitcoin will want a software wallet.
Hardware wallets are ideal for investors and people who plan to hold onto their digital currencies for a long period of time. They come with a chip or some means of connecting to a computer when you need to transfer them back and forth. A hardware wallet puts security first, but they can be too expensive for casual investors.
What’s the difference between mobile, desktop, and online wallets?
The primary advantage of having a mobile wallet is that you can use like an actual wallet when you’re out in the world. More and more retailers are accepting Bitcoin, and you use a mobile wallet to pay.
Desktop wallets let you store your coins locally on your computer, giving you complete control without having to rely on the interface provided by a third-party. Some people use unused computers out of fear of hacking.
Online wallets are fully accessed through the web, accessible anywhere, but requires a good deal of trust in the site owners.
Check out this resource for a list of Ethereum wallets to use that are secure and convenient. You can find wallets that are completely free to use and have easy-to-use interfaces, as well as wallets like Trezor Model T that are designed to put security first and foremost. Find the Ethereum wallet that fits your needs and that takes advantages of all the benefits of the Ethereum network.