A crypto wallet is an app, device or physical medium used to securely store cryptocurrencies and generate keys to access the assets kept or to be kept in the wallet.
But wait, let me burst your brain with some amazing facts about crypto wallets. They are not for audio-money fanatics or virtual billionaires! It is for those who have crypto assets or aspire to make it big in crypto. Here for the knowledge? Let us not play the role of Kasongo in the zoo, but Kasongo is doing some amazing things, especially with the lions. Let us continue.
Creating a crypto wallet is one thing and the ability to keep your assets in them securely is another thing. Depending on the type of wallet you have, losing your private key, if you use a custodian wallet, for instance, is equal to losing all your assets.
How do you know which wallet you need and when? How do you know how to create the wallet you need and what each of them represents?
This article will serve as a guide to creating and understanding what a crypto wallet represents.
What is a crypto wallet?
A crypto wallet is like a normal physical wallet where one keeps money and goes back to it whenever one needs it. The crypto wallet allows one to generate keys for a safe place where one will be able to manage the cryptocurrencies.
These keys are easily used to access an address assigned to an asset or be able to initiate transactions whenever one wants.
There are different types of crypto wallets and each of them have cases where they serve.
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Types of crypto wallets
The types of crypto wallets include;
- Non-custodial wallets
- Hosted wallets and
- Hardware wallets
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Non-custodial Crypto Wallets
These are the commonly used wallets for storing crypto assets. This type of wallet is independent and individuals can manage them on their own.
Hosted wallets
This type of wallet is common among crypto traders and investors. When you buy a crypto asset, this wallet is automatically generated for you; it is a third-party wallet whereby, a third party is in charge of your crypto. With a hosted wallet, you do not need to worry about losing your keys or wallet USB.
Hardware wallets
A hardware wallet is more physical than is it based online. With this type of wallet, you can securely keep your wallet safe offline and you do not have to bother losing your assets when your computer is lost or hacked. The hardware wallet is a physical wallet and is rarely used among investors and traders due to its high cost.
How to create crypto wallets
The process of creating a crypto wallet depends on the type of wallet you want;
If you want to create a non-custodial wallet;
- Head to the Google Play Store or App Store and download any crypto wallet app like Trust Wallet, Metamask, etc
- Open the app and click on “Create wallet”
- Generate a private key and be sure to write it down and keep it safe
- Understand that losing your private key is equivalent to losing your assets in the wallet
To create a hosted wallet;
- Choose a platform of your choice, platforms like Coinbase to purchase cryptos
- Provide your personal information like email address and phone number
- Generate your wallet key
- Secure your wallet by turning on the 2 FA for extra security
Finally, to create a hardware wallet, you can look for where they are sold and purchase one, it looks like a thumb drive.
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Crypto wallet security tips
To securely keep your assets in the crypto wallet, you have to understand which tip works for the type of wallet you choose.
For example, if you are using a self-custody wallet, just keep your private keys safe by writing them somewhere you can remember or backing them up. Understand that if anyone else has access to your private keys, they can transfer your assets.
Be sure to read the terms and conditions of the wallet you are about to create to understand how you can enhance the security of your wallet.
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