The Importance of Storing Cryptocurrencies Safe in a Wallet

The cryptocurrency industry has grown exponentially in the past few years, and as more investors like you hop on the bandwagon, it’s crucial to protect your assets. The following tips will help you store your coins safely to get stolen or lost. With these safety precautions in place, you can sleep calmly knowing that all of your hard-earned cryptos are stored in the safest place.

What is a cryptocurrency, and how exactly does it work

A cryptocurrency is a digital or virtual currency that uses cryptography for security. A defining feature of these currencies, and what makes them different from traditional fiat money systems, is the absence of a central authority figure (e.g., government). This means there’s no one person in charge of control over the production of new units/coins.

Why you should store your cryptocurrencies in a wallet

There are many benefits of storing your cryptocurrencies in a wallet. One of the main reasons is that you’re able to keep them safe from hackers and thieves who might try to steal your coins or put malware on your computer. Another benefit is that it gives you control over how much power/control someone else has over your money.

Types of wallets

The types of cryptocurrency wallets are desktop, mobile, hardware, and paper.

Desktop wallets are software programs and tools that you can download on your home computer or laptop to store the cryptocurrency coins locally on the device. It also provides a layer of extra security by allowing you to encrypt your wallet, so only someone who knows your password has access to it.

A hardware wallet is an electronic but physical device built for the sole purpose of securing cryptocurrencies. You connect it to your computer by USB, and then you can send coins from your crypto wallet without ever being connected online. As a result, they’re often used for large amounts of money.

Mobile wallets are software programs that store cryptocurrency on mobile devices like smartphones or tablets with an internet connection.

The other way people store their cryptocurrency funds in a safe place is by using paper wallets, which are just pieces of paper that can be stored in a preferred location. However, there is the risk that if you lose the paper, your cryptos are also gone forever.

How to make sure your funds are safe when storing them in a wallet

To keep your funds safe when storing them in a wallet, it is best to use a hardware wallet. They’re often used for large amounts of money because they provide an added level of security and keep your private keys out of the hands of hackers when compared with software wallets. All other methods have significant disadvantages because they are not as safe and provide no extra security.

You need to know that a cryptocurrency service does not provide the same money security standards as a bank does. For example, Crypto brokers are not SIPC secured, and deposited funds are gone forever if lost.

Tips for selecting the right crypto-wallet for you

Let’s talk about how to select the right crypto wallet. First, you need to think about what type of cryptocurrency you are planning to store. For example, some wallets specialize in storage for Bitcoin and other digital currencies only, while others support various cryptocurrencies.

It would be best to consider how many coins or tokens each wallet supports (most offer multi-cryptocurrency compatibility) and the level of security they provide.

Furthermore, you need to identify the level of anonymity you are looking for. Finally, consider your personal needs and preferences as well.

Top 3 of the most popular cryptos by market capitalization

1. Bitcoin was the very first cryptocurrency to be released back in 2009 by a person or group under the pseudonym Satoshi Nakamoto. Bitcoin uses open-source software, which means it can’t be hacked from outside sources because many people are looking at its code.
2. Ethereum is the second-largest on the list, and it was created in 2015. It can be used to exchange goods and services and calculate smart contracts from inside the Ethereum blockchain rather than off-chain or on a centralized system like Bitshares. The 27 year-old Ethereum co-creator Vitalik Buterin has become the worlds youngest crypto billionaire.
3. Litecoin is ranked third by market cap, but it has been around since 2011, making it one of the oldest cryptocurrencies out there.

Conclusion

We’ve just walked through the different types of crypto wallets needed to keep your cryptocurrency safe. You should be well-informed on what you need to know before selecting a crypto wallet and feel confident in which one is right for you.

The most important thing to remember is that there’s no single wallet for everyone. You need to know your own needs and then pick a crypto wallet accordingly.

It would be best to consider how many coins or tokens each wallet supports (most offer multi-cryptocurrency compatibility) and the level of security they provide.

Furthermore, you need to identify the level of anonymity you aim for. Finally, Crypto investing should be seen as speculative investing, and therefore the money invested should fit your risk commitment strategies. Typically, less than 10% of total assets available should be invested in speculative investments, while 90% are usually held with long-term investments in stocks that pay dividends, have positive earnings results and a company strategy that works.