For the past 2 weeks I have been researching, reading articles and watching videos that have to do with the basic info regarding Cryptocurrency. Since my goal is to be able to participate in this futuristic market, where basically a new form of "money" appears out of thin air and its traded for bitcoins or other Cryptocurrency that can be translated into real cash or buying power over the internet, I gathered the basic info on how to set up in the Crypto world and start Cryptotrading.
Step #1: Set up a wallet.
A wallet is basically like a bank account where you can save your Cryptocurrency. The main reason why you need a wallet is to protect your Cryptocurrency from hackers that want to take it from you. So make sure that you choose a safe, easy to use wallet that is also insured, so you won't loose your savings in case anything goes wrong. Do your research to what fits you best but remember that in case you start trading, its best to keep your Cryptocurrency in a wallet, than storing it in a crypto trader account for long periods of time.
What are the different types of Cryptocurrency wallets?
There are several types of wallets that provide different solutions on how to store and access your digital currency. Wallets can be divided into 3 categories: software, hardware, and paper.
When we talk about software wallets, you can choose to use them on your desktop, mobile or online.
Desktop: wallets are downloaded and installed on your PC or laptop. You can access them only from the specific computer in which they are downloaded. Although a Desktop wallet offers one of the highest levels of security, you still have to be very careful, because in case your computer gets hacked or a virus attacks it, there is a possibility that you may lose all your Crypto funds.
Mobile: wallets run on an application on your phone or pad and are very useful because they can be used anywhere, including retail stores. Mobile wallets are usually much smaller and simpler compared to desktop wallets, they have limited space due to your phone's storage space and its best to you use them only for spending and not for storing.
Online: wallets run on the cloud and are accessible from any computer or mobile device in any location world wide. Although they are way more easy to access, because online wallets store your private keys online, it makes them more vulnerable to hacking attacks or theft.
Hardware: wallets where you can store your user’s private keys on a hardware device like a USB. Although hardware wallets are capable to make transactions online, they are stored offline so that gives them extra strength on security. Hardware wallets can be compatible with several web interfaces and can support different currencies; it just depends on which one you decide to use. A hard wallet user can simply plug in their device to any internet enabled device, enter a pin, send currency and log out. The good thing about Hardware wallets is how easily you can transact while also keeping your money offline and away from any threats.
Paper: A paper wallet is a document that contains copies of the public and private keys that make up a wallet. Often it will have QR codes, so that you can quickly scan them and add the keys into a software wallet to make a transaction. The benefit of a paper wallet is that the keys are not stored digitally anywhere, and are therefore not subject to cyber-attacks or hardware failures. The disadvantage of a paper wallet is that paper and ink can degrade, and paper is relatively fragile – it’s definitely worth keeping well away from fire and water for obvious reasons. Furthermore, if you lose a paper wallet, you’ll never be able to access the bitcoins sent to its address.
I recommend that you first search the internet and find out yourself what are the best rated and highest reviewed wallets out there and then wisely choose the one that best fits your needs. It looks like a lot of people are using https://www.coinbase.com/, a US company that also insures your Cryptocurrency, where on the other hand there has been a lot of buzz about https://www.exodus.io/ a new wallet with super friendly user features and outstanding customer support, even by their founders.
An useful, much needed post for so many newbies. Can i ad how i see all this, and how i use them.
IMHO the key factor to decide which one to use is "how much funds it will keep, and for how long". I use four of the named five.
MOBILE: for small amounts 0.001-0.5 BTC, to be possibly used in the next 6 month
DESKTOP: almost as above, up to 1BTC, for 1-12 month storage. Using it less and less, tend to be replaced by ever improving mobile wallets.
HARDWARE: for 0.5 -5 BTC storage, and or for a longer term, 1-3 years
ONLINE: NOT use at all. NO intention to use in the future. NO exeptions.
PAPER: for funds larger then 5BTC, and for storage beyond 3 years. The only one I recomend for anything larger then 10 BTC , or longer then 5 years storage.
MULTI SIG type much recomended if you go significantly higher/longer.
I think this concept of diferentiation is rather closse to optimum.
At least to me, and to my current understanding of all these security issues.
looks like everybody is mentioning the ownership of a few wallets, depending on what you want to do online with your Crypto currency. Thank you for the extra info on Crypto wallets @onealfa
I already knew a lot about wallets but I must say that your post is nice to read. I have to admit that I didnt know about the size of the mobile wallets. A must read for newcommers.
Thank you for your comment @xervantes ... I am also just starting to get into the Crypto world, so I am more that happy to share what I am learning daily, with the steem community.
Thanks for this. As a crypto newbie this is one of the first things I needed to learn. Would love to see some follow up posts to follow your crypto journey and what you've learnt so far.
I will make sure to do so @failure-by-desig ... it looks like all us newbies will travel this Crypto road to the top together... :-)
I like the simplistic explanation and organization of this post, definitely would point it out to some of my newbie-crypto friends.
thank you @emperiumfx