Beginners Guide To Cryptocurrency
Storing your cryptocurrency safely with a good wallet isn’t difficult, unless you don’t know the best crypto wallet to use.
This guide is about how to buy cryptocurrency for beginners in 9 easy steps. You will learn how to get started in investing in digital assets like Bitcoin, Ethereum, and other cryptocurrencies safely and securely step-by-step. I know this technology is complex and the process seems intimidating and I’m going to make this as easy as possible for you. The Simplest Way I can Describe Everything You Need to Know About Cryptocurrency. Here is a guide to cryptocurrency for beginners. We offer simple answers to questions like what is cryptocurrency, how does it work, what is Bitcoin, what is blockchain, how do I buy cryptocurrency, etc. Metaphor: Cryptocurrency is a bit like online banking without a central bank.
Are you looking for the best way to keep your investment safe?
Is it hard finding the best wallet to secure your digital currency?
If you want the best cryptocurrency wallets for storing your crypto-coins, right here am going to show you almost all the wallets you can choose from to store secure your assets safely.
There is no way you will be using only one kind or type of cryptocurrency wallet, because we live in a world, where technology has made almost everything and anything possible.
Many professionals doing cryptocurrency trading, that always get different cryptocurrencies like using different wallets to safely guard and secure their investments – be it a big money investment or little pocket-money.
However, choosing the best cryptocurrency wallet for your multi Bitcoin cryptocurrency transactions, depends on specific needs you’re looking unto, and the level of security you also want for your investment.
Before we continue to know about the best crypto wallets for your cryptocurrency investment, I will like you to know that the best kind of cryptocurrency wallet, is the one that allows you to have full access to your private keys.
Investors are always advised to keep their wallet private keys safe in a very secured place that only them will know.
If you also ask me, I will say that for me, a multiple currency wallet will be the best for you, because it will serve as a universal crypto wallet.
Let me go straight and explain what cryptocurrency wallet is all about.
Shall we?
What is cryptocurrency wallet?
If you are considering investing in cryptocurrencies like bitcoin, or any of altcoin investment, that would be very great, but you will obviously need somewhere to store your coins.
It is from this place that you will store your crypto investment is where from, you will be sending or receiving all your crypto assets.
This storage place, space or device is the cryptocurrency wallet.
Crypto wallets comes in forms and kinds. These forms include hardware wallets, software wallets, paper and web online wallets.
Most of these kinds of wallets, especially the desktop software wallets runs in full nodes. This means that they always download the complete blockchain copy to get access to your cryptocurrency stake.
The full nodes wallets always takes time to synchronize with the blockchain to reach your stored cryptocurrencies. This makes them to create massive amount of data in offline storage of the device.
Alternatively, there is a lite version of the wallet known as, Simple Payment Verification (SPV) wallets which uses the full node, but this time, it uses full nodes that is hosted elsewhere.
This makes it helps to make it faster to reach blockchain network to confirm transactions. It also uses less space in the storage disk.
Multi vs single crypto wallet
A single coin currency wallet is the type that only supports only one type of cryptocurrency. These kind of crypto wallets are mostly made specifically for that cryptocurrency which they support.
For example, BitLox anonymous crypto hardware wallet is a bitcoin wallet made specifically for making bitcoin transactions anonymous.
In other words, multi-currency wallets are those cryptocurrency wallets that can support many crypto-coins at the same time.
As a cryptocurrency investor, you may have acquired many kinds of cryptocurrencies, so maintaining all of them with separate wallets can be very tedious, and overwhelming.
This is why you need to use a multi-currency wallet (universal cryptocurrency wallet) that can be able to securely hold all your crypto investments in one place at once.
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However, some cryptocurrencies like; Ripple and Monero still uses their unique wallets. They’re not well supported by some of the best multi-cryptocurrency wallets in the market.
This means, you will need to get wallets that are made specifically for those cryptocurrencies.
What is a crypto wallet key?
A crypto wallet key is a very long alphanumeric series of codes or pass-phrases that unlocks your crypto investment wallet content, and in most cases, these pass-phrase called, seed words.
Seed phrase-words are unrelated words used to retrieve crypto assets stored in a wallet. Anyway wallet that uses these codes or pass-phrase is known as a HD (Hierarchical Deterministic) wallet.
In other words, anyone can have full control or access to all the cryptocurrency stored in your wallet, without the need to also have access to your devices (e.g. Personal computer, Mobile phone etc.).
This is how most people lose their cryptocurrency investments to thefts. So be very careful with where you’re keeping your seed word pass-phrases.
Wallet keys are used to create wallet transaction address. Crypto wallet address is an ID characters used to receive or send cryptocurrency from your wallet.
In HD wallets, wallet IDs can be created multiple times, and this helps to prevent you from sharing your private key publicly in the bid to transact with your cryptocurrency investment portfolio.
Thus, there are still some risk involve in sharing public address to other people. Especially, when they always recognize your address in any transaction.
Types of Cryptocurrency Wallets
Before we proceed, there are different types of crypto wallets according to how they store, or retrieve the cryptocurrency stored with them during transactions.
Hot wallet
These are the type of wallets that uses keys created by devices that has encrypted access to the Internet. These types of wallets requires access to the Internet to store or retrieve your crypto assets.
The device in which they are installed can be fully accessed remotely.
Though hot wallets are the most popular type of wallets do to its utility, they are regarded as highly unsecured technologically. In case of hack, they are always the very first target for most hackers
Cold wallet
Cold wallets are regard as the most secured type of wallets due to the fact that, they don’t need Internet access to send or retrieve cryptocurrency transactions.
They totally store your investments without the need to reach the blockchain using Internet. Example of wallets in this category are; hardware wallets, paper wallets and brain wallets.
Brain wallets are the ones that only give you pass-phrases, and password you need to gain access to your investment, while paper wallet is the type of wallet that you need to write, or print your pass-phrases to your wallet.
Hosted wallet
This is the type of wallet that is hosted or installed in a third-party server, which you don’t have any access to your private keys. The private keys are held in an online server on your behalf.
In the case of hack attack, these servers are heavily attacked due to multiple number of wallets that are stored in them.
See these servers, just like banks that holds your financial asset on your behalf. These servers are not insured or regulated by the FDIC insurance.
Decentralized wallet
This type of wallets is somehow the same with the cold wallets. It allows you the fullest access to your cryptocurrency transactions.
You will not need any third-party server, Internet or person to exchange your cryptocurrency with other platforms and investors.
It doesn’t increase your anonymity anyways.
Factors to know a secured wallet
Before you choose to start making use of any wallet, please make sure the cryptocurrency wallet has most of these features listed below…
1. Backup Private keys
To fully have control of your cryptocurrency investment portfolio, you will need a wallet that has a feature to back up its pass-phrase seed words.
This will help you to retrieve or transfer your money to another wallet in the case of misplacement or lose.
2. Two-factor authentication
This kind of security is called, Second-Level-Security. Some wallets interchange this feature with fingerprint in devices that has bio-metric sensors.
2-FA is that kind of security whereby, if a hacker manages to crack or hijack your password, they will still need to comment a special kind of code that will always be sent to your mobile phone number, before access to your wallet can be granted.
3. Multi-signature support
This feature is for when more than one person is making use of a particular wallet address.
To avoid misusing, multi keys is needed before a some amount of Ripple coins can be transferred out of such address that has multi-sign feature.
However, this feature can also be used by one person to fully protect their cryptocurrency funds lose from theft.
4. Not hosted on an exchange
A large number of cryptocurrency enthusiasts have used exchange wallets like that of; Coinbase and Luno online wallet to keep their investments.
This is not a good practice as there can be massive hack attack on the exchange, and the target mostly are on the wallets due the huge number of cryptocurrencies stored in it.
Generally, storing cryptocurrencies using exchange online wallet is not recommended for security purposes, and these exchanges will not allow you access to your private keys which they keep to themselves on your behalf.
This also means that, you don’t have any control of your cryptocurrency investment.
Avoid using exchange wallets to store cryptocurrencies unless you are using the platform to trade them while having a time-frame to move all of them to a more secured hardware wallet (Highly recommended).
Kinds of crypto wallets
This also brings us to discuss on the kinds of cryptocurrency wallets, how they are, and how they work altogether:
Hardware cryptocurrency wallets
Hardware wallets are mostly recommended, because they have very high security. They are easy to carry about, due the fact they look like USB devices, which allows you access to your private keys.
Ledger Nano S
Since 2014, Ledger company has been known as one of the companies in the cryptocurrency market, to produce one of the most secured wallets to store cryptocurrencies.
The Ledger Nano S comes with a LED screen that displays payment validation and PIN to confirm transactions. This device is very convenient and easy to carry around in your pocket.
Nano S features two-factor authentication. It comes with its own operating called, BOLOS, and has support for windows 7+, Mac OS 10.8+ and almost all Linux systems.
Ledger Nano S also has support for multitude of cryptocurrencies. It requires you to have it connected to your personal laptop with Internet access to work perfectly.
Ledger Nano X
The Ledger Nano X cryptocurrency wallet is the newest instalment of hardware wallets from Ledger. It’s aesthetically pleasing and extremely secure.
The Ledger Nano X has several lines of defence making it an extremely secure option for storing your cryptocurrency assets.
Through the use of a microchip and PIN Code, this device can only be turned on when a PIN is entered correctly, and once a certain amount of PIN code failures, the device will be wiped completely.
Don’t worry… Your crypto investments are still safe. This is due to another line of security known as your recovery phrase.
By default, Nano X may not have the necessary firmware for storage, but these can be easily installed. But according to the Ledger website, the device is capable of having over 100 wallet apps, including ALL ERC-20, and Ethereum tokens.
The Ledger Nano X currently supports over 1185 cryptocurrencies!
Trezor Wallet
Trezor is produced by SatoshiLabs. The Trezor team are the people to produce first hardware wallet using modern cryptography. The wallet has a LED screen display, which is used to get access to the PIN code.
Trezor One also has two-factor authentication feature used for verifying transactions. This device offers support for up to 500 alternative coins.
It is compatible with most operating systems like; Windows, Mac OS and Linux operating systems. Just like the Ledger hardware wallet, Nano S, you also need to connect it to a computer for it to work.
Cryptocurrency Software wallets
Software wallets are mostly secured mobile applications, or software made specifically for storing cryptocurrencies. Some of these wallets are also offline wallets, but still not as secured as hardware wallets.
Jaxx wallet
Jaxx to me, is one of the best crypto wallet app for both PC and mobile phones. It supports almost 70 cryptocurrencies as at the time of writing this post content.
It is actually a dedicated client for Windows, Mac and Linux – including an app for Android and IOS gadgets. It also has Chrome browser extension.
This cryptocurrency wallet application, Jaxx is also an offline wallet but uses Internet to synchronize and access the blockchain network when transacting cryptocurrencies.
Binance Trust wallet
Binance cryptocurrency exchange partnered with Trust company to release the trust wallet. This is the best mobile crypto wallet app, if you would like to take part in cryptocurrency airdrops.
It has support for only Ethereum DApps (e.g. ERC 20 and ERC 23) tokens. This is also a secured wallet to stored all your Ethereum based cryptocurrencies.
It is mostly preferred for mobile crypto wallet users.
Cryptocurrency Paper wallet
These are not really the best cryptocurrency wallets in the market, but it allows you to print, or write private keys on a piece of paper, which seem more secured.
But the risk of loosing your investment due to misplacement of the paper, or tear is higher than other wallets.
This kind of wallet are also among the most secured wallet, but it also comes with a risk of loosing your cryptocurrency investment if not kept away from water.
Online web wallets
This is a less secured and inexpensive way of storing your cryptocurrency assets, even though most beginners insist that they’re among best crypto wallets online.
These kinds of wallets are those wallets hosted in an exchange (like; Luno or LocalBitcoins) to temporally keep your investment, while using the exchange platform to do cryptocurrency trading.
It’s mostly not advisable to leave your coins on the exchanges for too long, to avoid loosing your cryptocurrency investment in case of hack attacks.
My final thoughts
The best wallets to be used for reducing the risk of loosing your cryptocurrency investment, are those wallets that doesn’t need to continuously have access to the Internet to keep your coins.
These kind of wallets are always secured from hackers.
Hardware wallets are highly preferred wallets you should have at your disposal as a serious crypto investor, to fully secure your investment from lose and thefts.
The best strategy to use other kinds of wallet, is to keep up a time-frame for keeping any cryptocurrency asset with these unsecured wallets.
If you have already chosen your best multi-currency wallet, and wish to buy your first cryptocurrency at best rate, I will recommend you use CoinSwitch, which is one the best exchange platform you can use right away.
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