When you start something new you can quickly be overwhelmed by too much information, it is the case with the cryptocurrency wallets. You probably look in the first place on Google with specific keywords where you can find a link to a blog, website or social network. Even that is not very easy to find your way through so much information and you get stuck to the same point before you did the search. I got this feeling myself when I was looking on how to start with this new technology.
You need to start somewhere, and the first step is to have a wallet configured, you can view a wallet like your personal ATM or your bank account. A wallet is a place where you send and receives your precious bitcoins. There is a variety of cryptocurrency wallets available on the market:
Type of cryptocurrency wallets
- Web Wallet: Basically you have to create an account on a specific website like Coinbase. The website will provide you a bitcoin address that you can send and receive your bitcoins. You must be aware that it is not the much secure way store a huge amount of bitcoin. If the server gets hacked, you can lose all your fund. Also, you are not the owner and you can't control the people who manage the website.
- Paper Wallet: Type of wallet that is pretty easy to understand, you will handle your fund on a piece of paper, but you need to place it in a safe place.
- Hardware Wallet/Cold Wallet: The most secure type of wallet available that I am aware of. When you store your bitcoins on this type of wallet, you are offline and it is very safe. The only point to consider is that you can be robbed by a theft in the real word. Place your equipment safe in your home or in the bank vault 😉
- Smartphone Wallet: This is the one I chose for myself and I think it is the one who will become the most popular. Basically, you download an app on your Android Phone or iPhone and configure your wallet to send and receive your bitcoins.
I remember I was confused when I tried to choose my first cryptocurrency wallet. I didn't understand all these terminologies from the bitcoin world, I was completely afraid to get my first wallet setup. I was sweating and nervous when I looked the information online, confused which one I need to choose and why.
For my first cryptocurrency wallet, I chose a web wallet because it was easy to create an account and I had my wallet ready to send and receive bitcoins. When I dig deeper on the security issues, I was in doubt if I did the right choice. As I mentioned already, you don't have control of your funds stored on the site and you are at the mercy of the owner.
So I decided that I wanted more security and sleep well at night. I chose to use a smartphone wallet. The advantage is that you have full access to your funds and from my point of view this is wonderful. The process is very straightforward, you download, install and secure your wallet. With this type of cryptocurrency wallet, it is good only if you have a small amount of money. Imagine if you store 5000 USD on your phone and you lose it, your nerve will blow away and you will fell apart L.
From my current knowledge on the subject and base on my own experience. The first step is to choose a smartphone wallet for your daily needs and keep only small amounts on it. Then, for a bigger amount of bitcoins, you need to have it in a secure vault. Go for a hardware wallet, in the beginning, you need to invest in buying it, but see it as a good investment. It is very important to protect yourself and keep your bitcoins secure.
To finish, the first step is to take your time to choose from all the cryptocurrency wallets available and evaluate your need. See the wallet as your own bank account, you need to secure it and take security seriously like any bank account in the real world.
If you need more information, don't hesitate to ask in the comment section below.