A crypto wallet is a physical or software device that stores the passkeys you need to interact with a blockchain, the shared ledger of all digital transactions. The blockchain is a database of encrypted data that allows you to send and receive cryptocurrencies like bitcoin, ether and dogecoin without relying on a third-party service or intermediary.
Buying and using crypto is exciting, but it also comes with its own risks. The cryptocurrency market is highly volatile and subject to dramatic price swings on a daily basis. And while reputable crypto exchanges provide some insurance against hacks, they’re not backed by the FDIC like your traditional bank account is.
If you’re new to cryptocurrencies, you may be wondering where to buy your first wallet and how to use it. Luckily, there are plenty of options to choose from, so you can find a device that’s right for you.
One of the most secure options is a hardware wallet. These devices use a USB drive as the main storage medium for your crypto. They offer users a wide variety of features and can be extremely convenient, especially for people who regularly trade. Popular models include Ledger Trezor, Nano X and KeepKey.
The main advantage of hardware wallets is that they’re much more difficult to break into than software wallets, even when the owner falls for a phishing attack. Despite this, you should always make sure you’re using a trusted provider to store your coins.
When you buy a crypto wallet, it’s important to consider whether it’s custodial or noncustodial. With custodial wallets, the company you sign up with holds your private keys. They are a popular option for beginners because they give you more control over your wallet than a marketplace or exchange might.
You’ll also want to verify the security measures that the wallet has in place, including encryption and password-protected storage. This will help to protect your assets from hackers and other bad actors.
Unlike cold storage wallets, hot wallets are connected to the internet and allow you to access your crypto whenever you want. They’re typically more expensive than cold wallets, but they can be a good choice for advanced investors who want to stay connected to the cryptocurrency market.
The best hot wallets are compatible with a wide range of hardware wallets and support a wide range of cryptos. They’re also easy to use, allowing you to deposit and withdraw crypto quickly and easily.
What’s more, they’re often more user-friendly than cold wallets and are easier to manage than a traditional online bank account. You can also use hot wallets to store other types of assets, such as equities and bonds.
If you’re a beginner, we recommend starting out with a simple wallet that only supports a few coins and doesn’t require you to register an account on the platform. This way, you can try out the technology before you commit to a large amount of money.