Beginner’s Guide on Where to Store Crypto
With the growth of coins and digital assets in early 2021, new investors are pouring into the market. One of the first decisions these investors have to make is which cryptocurrency they want to invest in. However, apart from choosing the right cryptocurrency, you also need a place to store it.
Many experienced crypto investors or enthusiasts may be familiar with the options. But, it can be difficult for a newcomer to become familiar with the available methods. In an effort to help those new to crypto, this guide is going to cover what makes each storage option a good choice.
Hot wallets can be viewed quickly and easily online, which makes them very convenient. In the general term of “hot wallet” there are several different types.
They can be downloaded to your computer or phone (software and mobile wallets), or even accessible from any device (in the case of cloud wallets). This makes them very friendly for beginners, as well as simple to understand and use.
Of course, since the wallet is always online and logged in, you need to take the appropriate security measures. Make sure any device you use is protected. Otherwise, you could run the risk of being hacked.
Another option is to store your coins in the exchange where you can buy, trade, and sell cryptocurrencies. Like hot wallets, this implies that your crypto remains online. It is a very convenient method and makes it much easier for you to manage your funds. So, whether you want to convert your 1 ETH to BTC or store your crypto assets, an exchange is a popular option.
While this is very convenient, there are potential security risks. For example, the exchange will have full control over your crypto. This makes your funds more vulnerable to theft or fraud. This does not mean that the exchanges are not secure. But most investors would agree that using a dedicated wallet is less risky than storing all of your crypto money on an exchange.
These are wallets that keep cryptocurrency offline. Thus, they are less likely to be the target of hacking attempts. When it comes to cold wallets, there are a few unique options for your crypto. Some wallets store your money and other sensitive data on a piece of hardware like a USB flash drive. They can be connected to a computer and can even have an interface, but they don’t have internet access.
A paper wallet, on the other hand, keeps your cryptocurrency keys on real paper. Some people will also use engraved metal or laminate their copy. Cryptographic keys can be written or generated by special software and then printed. This means that only you will have this information and that it is almost impossible for someone to steal it. Of course, you don’t want to lose or damage the paper, as these keys are usually your own way to gain access to your crypto.
While cold wallets are considered one of the safest options, they are also the least practical. Due to their offline nature, they are not perfect for frequent transactions as it can be tedious to access and unlock them. They make more sense for those who want to hold onto their cryptocurrency, as opposed to frequent trading.
In conclusion, as you can see, there are a variety of options where you can store your crypto. Of course, before investing in cryptocurrency, remember to do your research and only invest what you can afford to lose.