Do you want to start trading cryptocurrencies but are clueless on how or where to begin? If yes, you need a cryptocurrency e-wallet to start with. Continue reading to learn more.
Cryptocurrencies have gained popularity and widespread acceptance in under a decade. As per a recent survey, 13% of Americans brought at least one cryptocurrency in the last year, and since then, this percentage has only increased.
If you also want to trade or buy your favorite crypto, you need a cryptocurrency digital wallet first. But which e-wallet would meet your needs, and how can you get one? Keep reading to find answers to all your questions.
What Is a Cryptocurrency Wallet?
Also known as crypto wallet or Bitcoin wallet, a cryptocurrency wallet works like your traditional wallet. However, instead of holding your paper currency, this system secures digital cash.
This e-wallet stores private and public keys that are essential to trade, buy, or sell a wide variety of cryptocurrencies. Besides, this system offers digital signatures that help authorize every transaction.
A cryptocurrency wallet can be an app, device, program, or simply a service. The private key helps to unlock your wallet, so you need to make sure that it is safe and secure at all times.
Do You Need a Cryptocurrency Wallet To Make Transactions?
Yes, if you want to trade or make transactions using your cryptocurrency, you need to have a digital wallet to get complete control over your earnings.
The Popularity of Cryptocurrency Among Ecommerce Businesses and Banks
Many businesses and financial institutions are slowly adopting cryptocurrency. Different banks around the globe are investing in crypto to diversify and increase the number of their assets. Moreover, they have finally understood the benefit of this currency to streamline processes and make banking innovative and efficient.
According to a report, industries like restaurants, IT services, and online e-commerce stores are increasingly accepting crypto as an online or in-store payment method. Some physical stores are still struggling with this currency, but soon, they will also likely witness a rise in this adoption.
Considering the popular trend, it is possible that holding a crypto wallet may become a necessity in the coming decade. If you don’t want to miss out on your favorite products and services, you should probably set up an e-wallet for yourself.
Different Types of Crypto Wallets
There are different forms of cryptocurrency digital wallets. Each has its advantages and disadvantages regarding security and use.
Here are two significant categories of such e-wallets:
Hot Storage Cryptocurrency E-Wallets
These wallets include desktop, mobile, and web wallets. They are connected to the internet and do not have any fee for their services. However, such wallets come with high-security risks and are more prone to online theft.
Desktop wallets store your cryptocurrency on the desktop computer. These e-wallets allow you to have complete control over the funds, but you will have to keep your desktop safe from malware to avoid any regrets.
Mobile wallets store your cryptocurrency funds on your smartphone. These apps are pretty convenient and are ideal for quick payments. Coinbase Wallet, Trust Wallet and Binance are a few cryptocurrency trading platforms that are easy to get started with.
Lastly, web digital wallets are browser-based and hence are available on your smartphone or desktop. However, unlike the two options above, they do not allow you to control your funds.
Cold Storage Cryptocurrency E-wallets
Cold storage wallets are small devices that come with their encryption. These devices are portable and give you the liberty to download and trade any cryptocurrency of your choice.
These e-wallets are expensive but are considered safer than hot storage wallets. It is because they store your cash offline and reduce the chance of any external access.
How to Set a Cryptocurrency E-wallet?
Here’s how you can set up your hot storage wallet in a few simple steps:
- Download your preferred wallet app. Please do proper research and homework before you choose the right application for yourself.
- Once done, create your account.
- Put in your private key. It is usually a 12-number phrase that you should always keep safe and avoid sharing.
- Finally, transfer the currency to your wallet and start trading.
Follow the steps below to set a cold storage e-wallet:
- Purchase the device or hardware from well-reputed brands
- Install the brand’s unique software. You can download this software through the brand’s website and follow all the instructions to set your digital wallet.
- Make sure to transfer your crypto to this newly-created wallet to buy more currency.
You can set either of them or even get both wallets for your use. For instance, if you own a significant number of cryptocurrency assets, a combination of hot and cold storage wallets would work. You can use the former for any quick purchases and trading, and the latter can help you secure all your cryptocurrency resources.
Is it Safe to Use a Cryptocurrency Wallet?
Unlike a traditional wallet, a cryptocurrency wallet comes with password protection and unique security features like factor authentication, a secret phrase, and encryption, so you don’t have to worry about your sensitive data. Moreover, even if you are buying a product from a tried and tested ecommerce business, it is vital not to share your details with the merchant and increase the chances of theft.
Here’s how you can keep your wallet safe:
- If you are concerned about any cyber threat, perhaps opt for a cold storage wallet only.
- Avoid saving your private key on electronic devices. Keep the number secure offline.
- Don’t use your wallet using a public or insecure internet connection.
- Avoid suspicious or unknown links.
- Set a strong password for your wallet.
- For your daily transaction, keep a separate wallet.
- Having a backup for your cryptocurrency wallet will save you from the loss of data.
Wrap Up
In a nutshell, if you want to trade or purchase cryptocurrency, you need to have an e-wallet to store your funds. With so many banks and ecommerce stores slowly adapting to cryptocurrency, having this technology is gradually becoming a necessity.
So, make a move and choose the proper wallet for yourself. When making a selection, pay attention to your security demands and ease of use for smooth trading and convenience online.
