Full Guide to Crypto Wallets Usage and Crypto Trading
For people who are not familiar with the industry, using a cryptocurrency wallet may seem a little hard at the beginning. If we add that there are some things that must be done in order to ensure that crypto wallets are used appropriately and funds are stored securely, a full and compact guide on how to use them is required. There are plenty of materials online about this topic, but we’ve managed to write that’s relatively short and contains most of the important things you need to know.
Crypto wallets types
Unlike the traditional wallet which you are carrying in your pocket, cryptocurrency wallets represent virtual storage of user’s payment and identification information for several different payment systems. There’s no money in a cryptocurrency wallet, all coins are stored on a blockchain. A crypto wallet stores public and private keys that allow a user to access his funds.
If you want to work with top crypto currencies, you must know that there are a few different types of wallets, all with their own characteristics and functions. An online wallet is one that runs on the cloud and can be accessed by its users from multiple devices with internet connection.
Mobile wallets represent phone apps that are very useful and easy to access, allowing them to make payments even in physical stores. Desktop wallets are pieces of software downloaded and installed on a PC or laptop and accessible only from that device.
Other than these categories, we must also mention hardware wallets, which are USB-type devices that store cryptocurrencies physically. Paper wallets represent a similar but cheaper alternative to hardware wallets and are physical copies of your generated public and private keys.
Security is one of the main issues when dealing with cryptocurrencies and each of the above-mentioned wallets carries several disadvantages. When it comes to online wallets, critical information is stored on a cloud and in case a hacking attack takes place, you could be left without tokens, even though it wasn’t your mistake. Also, since these wallets are accessible from multiple devices, users must ensure that they add multiple levels of authentication so no one will ever manage to log in without their approval.
Mobile wallets are safe as long as your phone does not have any malware or someone gets access to it. Use fingerprint authentication or other biometric solution to stay safe. Desktop wallets also require that you keep your PC clean all the time. Updated antivirus, original OS, and no strange software installed on it are a few important requirements.
Hardware wallets carry the highest level of security, but still, if you want to trade cryptocurrencies, you will need to transfer funds from them to an online, mobile, or desktop wallet. The same applies to paper wallets.
Account opening key tips
We assume that taking care of the basic steps required to open an account with a crypto wallet provider is easy to handle (filling personal information, confirming account), so we would like to provide a few useful tips that must be done. First and foremost, once you’ve logged into your account you should make sure to save your backup phrase. Most of the wallets provide one. This is an important layer of security.
Second of all, you should link your mobile number and enable 2-factor authentication. Your password alone, no matter how complex won’t ensure enough security. Whether it is Google Authenticator or fingerprint, add a second level of security.
These two are critical to be done and depending on the wallet provider you want to choose, you may get other useful security features.
Now that you have the cryptocurrency wallet, bought and stored cryptocurrencies in it, you would like to start trading cryptocurrencies. That won’t be possible directly from your wallet. You must open another account, this time with an exchange platform. Once you’ve done that, you will have online crypto wallets at the exchange in all tokens supported, and you will need to transfer tokens from your wallet to the wallet available at the exchange.
In general, the user interface is friendly and you’ll notice each step you have to take in order to transfer funds easily. If not, most exchange platforms provide FAQ or customer support, which means you will get help from a representative, in case you need it.
Dealing with cryptocurrency wallets turns out to be a tricky thing, considering all the security vulnerabilities that arise with digital money. Still, that does not mean crypto currencies are not good or useful at all. By taking the precautions we’ve highlighted above, you will be able to avoid most of the painful experiences beginners have to face. Don’t forget to consider that cryptocurrency transactions are not free and you need to study the commissions in order to work with the company that offers the best conditions.