Choosing a reliable and great crypto wallet is just as important as investing in bitcoin. Many newcomers are flabbergasted with the sheer amount of information to grasp when it comes to cryptocurrencies and bitcoin. Choosing the best wallet can be a daunting task, but it’s crucial to safeguard your investments properly.

Many newcomers store their crypto with the exchange they buy from and never use crypto wallets. While this isn’t inherently wrong, it puts your crypto assets at risk. If the exchange goes out of business or declares bankruptcy, you may lose access to your assets.

So What Are Crypto Wallets?

Simply put, crypto wallets are a form of wallet separate from exchanges which allow you to store your crypto investments safely in a sort of digital safe. Choosing the best wallet is crucial, as this is one of the best and safest ways to store your crypto assets.

By establishing a secure connection with the blockchain network, your crypto wallet of choice will allow instant token sending and receiving with all the benefits of blockchain technology.

Understanding The Different Crypto Wallets

With many different types of crypto wallets available, it’s important to note that some will focus more on security over convenience and vice versa. Some wallets will even act as exchanges with additional features which allow users to sell, buy and even trade crypto assets.

The most popular form of crypto wallets is mobile app crypto wallets which can easily be downloaded on modern smartphone devices. That being said there are several options to store your crypto on desktop software/ online exchanges and even hard wallets. Some of the best options for crypto wallets are enlisted by Business2Community accompanied by reviews and comparisons between each crypto wallet.

Understanding Custodial and Non-custodial wallets

Let’s start with the more popular non-custodial wallets. These wallets are limited to only one person with access to the wallet’s private keys and the backup phrases for the wallet. These offer the tightest form of security but it also has one major issue. One bitcoin owner whose story went viral after he lost his wallet password brought the issue in limelight.

Without the key or backup phrase, you cannot access your crypto assets. It’s crucial to store the keys and backup phrase in multiple secure places.

Custodial wallets, on the other hand, do not give you personal access to private keys or phrases. Instead, you trust a third-party provider, such as an exchange or broker.

This option is more convenient but less secure. However, if you use trustworthy exchanges like Binance, which are regulated by tier-one licensing bodies, it remains a safe choice.

Types Of Crypto Wallets

Crypto wallets fall into two main categories: software wallets and hardware wallets. You can store, send, and receive cryptocurrency with software wallets, which are apps for desktop or browser add-ons.

Hardware wallets, similar to a Pendrive, require insertion into devices like a desktop or laptop to access your funds.

These wallets are also known as “hot” and “cold” storage. Software wallets are hot storage because they keep funds online, while cold wallets refer to hardware wallets, which store data offline.

Hardware Wallet

A hardware wallet, as we stated earlier, is a tiny device that typically resembles a Pendrive, which allows you to store crypto offline. Choosing the best wallet involves considering a hard wallet, as it is considered the safest method for storing crypto. Since the signing in and out process is all done offline, it is impermeable to hackers.

These wallets tend to go for around $100 dollars and tend to be a little more complex to use when compared to software wallets making them less convenient. Hardware wallets can communicate to a computer in 3 main forms.

• Company App operated through Bluetooth
• Online Based Interface
• A completely separate software wallet

Software Wallet

Software wallets operate completely online and can be in form of a computer program or mobile app which holds the private keys online. Often these wallets are easier to use and make for a much more convenient option for the cost of a little less security.

These wallets are usually free to open and in return will charge small fees on transactions in and out of the wallet. There are also 3 main forms of software wallets.

• Online Based Wallets such as MetaMAsk
• Desktop wallets
• Mobile App Wallets

How To Choose The Best Crypto Wallet

When choosing your preferred method of storing your cryptocurrencies there are a few major factors one should consider.

Security

Bottom of the line these wallets are used to keep the cryptocurrencies safe. If your looking for the ultimate safety your best and safest option would be the hardware wallet method. That being said security and convenience can be achieved through software wallets.

When using a software wallet, ensure your device is protected. Whether it’s on a mobile or computer, use at least a pin or password.

Some software wallets also offer facial and fingerprint recognition. This adds convenience while maintaining a high level of security.

Reputation

Make sure the security method you choose is proven. If you pick the first crypto wallet that catches your eye, you could be risking your assets. Check review sites or do research on the wallet. Make a pros and cons list. Compare different wallets to find the one that best suits your needs.

Private Keys Access

Earlier we mentioned the difference between custodial and non-custodial wallets. Depending on the level of security you are going for custodial wallets might not be the best option. These wallets are generally considered unsafe since you literally are handing out access to your funds to a third party.

On the other hand, companies like PayPal have been doing this for years. Therefore, it’s essential to choose the best wallet and pick a trustworthy site if you decide to go this route. The main benefit of using these wallets is the ability to regain access if you misplace your backup phrase and key.

Do this mistake with non-custodial wallets and you can practically kiss your crypto assets goodbye.