Learnwithsteem: What type of crypto wallet should I use? by @armstrongdiho

CRYPTO WALLET

What type of crypto wallet should I use, has been a problematic question to the newbies. Well, the truth is that know what you need then make some research to find out a suitable one for your needs.

Choosing a crypto wallet is one of the essential tools a trader should consider very necessary. Different crypto wallets have different purposes and functions so choosing it depends on your needs. However, there are several things like security, custodianship, and interacting with smart contracts are key points to consider. Perhaps you also may want to access your wallet on different devices, so all these should be considered as well.

Cryptocurrency as we all know is any kind of currency or money that exists virtually or digitally and utilizes cryptography to achieve transactions. So, we can say that cryptocurrency is naturally decentralized digital or virtual currency developed to be used over the internet. However, it's an open peer-to-peer system that exists solely as digital access to an online database whereby it is apparent to send and receive currency online without the involvement of mediators such as banks and the transfer of coins can be anywhere, any time across the worldwide for low fees.

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Moreover, cryptocurrencies track down on a digital register or database of recorded data of all transactions called the blockchain and it counts on cryptography which provides security as well as prevents faking and counterfeit transactions.

This brings us to this cryptocurrency can be stored in a digital wallet or cryptographic wallets like hot and cold wallets. Note that cryptocurrencies can either be mined or purchased from cryptocurrency exchanges like Binance, Hubio, etc.

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Well, there are several crypto wallets such as MetaMask, MathWallet, browser extension wallets and Binance Chain Wallet are nice options. However, if you like a mobile experience, MetaMask, MathWallet, Trust Wallet and SafePal are available for iOS and Android. Also, they’re decentralized and store your key (private) on your device.

For the highest security, SafePal offers it as it is a cold storage hardware wallet.

TYPES OF WALLETS

1 Custodial: in this type of wallet, the provider holds your private key. This is a scenario with your digital assets or funds in an exchange’s wallet. And one thing about a crypto wallet is that without owning your private key, you aren’t entirely in control of your wallet.

Probably, you won’t be able to connect to DApps either. For example, if you only want to spot trade BinanceSmartChain (BSC) tokens and other crypto assets, a custodial wallet is an acceptable choice but you have to be careful. While this is safe to do on Binance, you should not trust your crypto funds or assets to any custodial wallet or exchange.

2 Non-custodial: This is another wallet where you own your private keys. I can say it’s the safest choice for most crypto investors or traders, as long as they secure and take good care of their keys and seed phrases. Majorly, the seed phrases are very important because they help to retrieve it recover your lost key.

However, the wallets we’ll cover later are all non-custodial options that allow you to interact with DApps.

✅ Hot wallets: when we hear the word got doesn't mean the wallet is hot 😅. Well, they are known as a hot wallets because they are crypto wallets connected to the internet and are typically non-custodial (except you’re using a centralized exchange). One peculiar criterion of Hot wallets is that they are convenient for making transactions but come with some security threats.

You might ask why it comes with some security this is because your private key is held online with your public key and is usually accessible with a user-set password. Just like any password-protected aid, you could be hacked or phished. However, to mitigate the threats and risks, you should also make use of two-factor authentication (2FA) methods.

✅ Cold wallet: this wallet is indeed cold because you store your private key offline on a specialized hardware device. Some traders and investors recommend it as the most secure means to hold your BSC tokens but have its flaws as it’s often the most ineffective method for making transactions and interacting with DApps.

My recommendation is that you have to make proper research about the crypto wallet you want to store your funds. For exchanges, you can make use of the Binance platform and for a diverse non-custodial cryptocurrency wallet, I recommend the Trust wallet. Also, do well to diversify your investment and never put it all in one cryptocurrency.

CONCLUSION

Cryptocurrency is a digital or virtual currency that can be accessed via an internet-connected device and can be stored via wallets or exchanges. In this post, I have explained the types of wallets, so, ideally, you make proper research on wallets (know the merit and demerit, especially the flaws associated with the risk) before storing your funds.

THANKS FOR READING THROUGH