Once you buy your cryptocurrency, you need somewhere to store it. This is typically done using a cryptocurrency wallet which is an ultra-secure digital vault. It also acts as the app or platform you use to manage your cryptocurrency. The best wallet allows you to buy and sell cryptocurrency, exchange different cryptocurrencies and use your cryptocurrency in different and novel ways. Understanding all this then, how do you choose a cryptocurrency wallet?
Hot or Cold
The first serious consideration is whether you need a hot or cold wallet. A hot wallet is a software solution connected to the internet that you can either set up yourself or set up through an exchange.
A cold wallet, on the other hand, is a hardware solution that you connect to your computer occasionally to store or transfer cryptocurrencies, or to use them in other ways.
A hot wallet is convenient but less secure than a hardware solution. Cold wallets also typically support more cryptocurrencies than hot wallets.
Security
The cryptocurrency wallet you choose must have the highest level of security. At the very least, it should have password or pin authentication. Next, it should also allow two-factor authentication for added security.
Some cold wallets even come with additional authentication options like fingerprints for added security.
Access to and Control Over Private Keys
The private keys to your cryptocurrency give you total control over the cryptocurrency. If you do not hold your private keys, you only have claim over the cryptocurrency and are not the custodian. By having total control, the custodian can do anything with your cryptocurrency.
Also, if the custodian goes bankrupt, there is a massive probability you will never see your cryptocurrency again. This is why it is so important that the wallet you choose gives you complete control over your private keys.
Holding your private keys is important because you have total control of when you can exchange, sell or buy cryptocurrency. If the custodian holds the keys, you need to ask them for “permission” to complete trades, and they can delay these trades or even charge you for making them. With your private keys, you can simply head on over to the OKX cryptocurrency converter, see how much a specific cryptocurrency is going for and buy or sell it instantly without delays or interacting with any custodians.
Reputation
The reputation of the cryptocurrency wallet maker is also critical. Sometimes, a wallet has security flaws, whether by accident or design. These flaws put your assets at risk. To ensure the wallet is secure, you can research its maker online.
You will find a lot of information about the wallet on forums and other places where people congregate. Use reviews from review sites cautiously because some reviewers are biased when reviewing these wallets.
Also, go with a solution that has been around for a long time that has a good rating. Being around for such a long time means people trust it.
Getting the right cryptocurrency wallet is essential to the safety of your cryptocurrency as well as the ease of trading or investing in crypto. Do enough research keeping the factors we have discussed above in mind to find the right one for your needs.x
