Crypto Wallet Guide: Which wallet to Choose? Hot & Cold Wallets, Guide
If you are reading this, and you want to know about crypto wallets for beginners in 2023-2024, then this guide is right for you. This article will tell you everything that you need to know about the importance and the different types of crypto wallets out there, how they work, and how to choose one.
A Crypto wallet is crucial for the security of your crypto. With constant online threats from hackers, leaving your coins on exchanges can be a very risky choice, especially if you are a serious investor!
What is a Crypto Wallet?
A Crypto wallet is software or hardware that is designed and made to help you store your crypto securely. Instead of leaving your crypto on exchanges that are run on the exchange’s server, keeping crypto in wallets allows you to have full custody of your coins.When you use a crypto wallet for the first time, it is necessary to set up a new account. Depending on your account name and password, the wallet will randomly generate your very own private key and public key.
The private key is the most important thing in the wallet. This set of numbers and letters is what allows you to access your wallet. It is unique only to the account you just created and if you lose it, you will also lose access to your wallet. To make it easy to remember, the wallet will help you transform your private keys from a set of random letters and numbers to a set of words. This set of words is called the recovery seed (or mnemonics), like the name suggests, you can use the recovery seed to be the back-up of your wallet. The private key must be kept private at all costs. If someone stole your private key, they can use it to access your wallet.
The public key is less important. This is another set of letters and numbers that are supposed to be made public. Anyone who wants to transfer your crypto will input your public key into their wallet and the crypto will be directed to you. The public key can also be referred to as the wallet’s address. It helps other wallets identify your account and transfer your crypto correctly.
Different Types of Wallets
Crypto wallets come in many forms – as computer software, as an APP, or as specially made hardware. Software and APP wallets are known as HOT wallets. They are easy to use and are usually free. However, because they are installed on computers and smartphones that are online most of the time, they are prone to be hacked. To prevent any hacks, hardware wallets are made to give crypto the most secure protection. These hardware wallets are devices that are always offline and work with another online device as a proxy to help transfer crypto. While the hardware wallet is offline, there is no way for hackers to attack.
HOT WALLETS
Pro:
- Easy and free to use.
- Easy to set up and always accessible on your smartphone or computer.
Cons:
- Always online. If you are targeted by a hacker, they can easily hack you remotely.
- Smartphones might be stolen and hacked.
COLD WALLETS
Pros:
- Devices are designed specially to store crypto, filled with many security features.
- Always offline so hackers cannot steal your crypto remotely.
- Comes with multiple authentication methods to increase security.
- Some brands like ELLIPAL come with anti-tamper protection to protect against offline attacks as well.
Cons:
- Sometimes difficult to use and get used to
- Not free. Will need to be purchased.
- Transactions can only be made when used with the wallet’s pairing APP or software.
How easy it is to use Hot and Cold Wallets?
People usually have the misconception that wallets are hard to use and making them lose the best time to trade, so they leave most of their crypto on exchanges. However, one must first understand that wallets are made for different reasons than exchanges.
Wallets are made to keep cryptocurrency safe because it is not safe to store on exchanges. People who understand this and want to store crypto for long-term gains will choose to store their crypto in wallets. They will not focus on trading.
On the other hand, people who trade daily will not use a wallet because it slows them down. Trading directly on exchanges is quick and gives them a good price. The best traders always have spread their risks by keeping the majority of their crypto in wallets while having another fund on exchange today trade.
If you are someone who is looking to store cryptocurrency long term, and not day trade, wallets are essential tools for you. Hot wallets are very simple and easy to learn. They are mostly simply designed mobile APPs or computer software that you can learn and master in a few minutes.
Cold wallets on the other hand might need some time to get used to. Nonetheless, they are all designed to be as easy to use as possible so most of the time, people will not have trouble mastering the cold wallets.
Which cold wallet to choose?
The main parameters for choosing a hardware wallet. Comparison of hardware wallets
In the hardware wallet market, there are several dozen hardware wallet offers from both leading manufacturers and promising start-up companies.
When choosing a hardware wallet, it is recommended to take into account the following parameters by which you should compare hardware wallets and choose the most acceptable option for you:
1. Supported Currencies, Coins.
2. How you actually access your crypto.
3. Ease of Use & User Suitability
4. Supported Operating systems
5. Wallet Backup and restore coins
6. Security Features
7. Manufacturer’s Credibility & Reputation
8. Portability
9. Costs and Prices; Discounts and Codes
10. Independent reviews; consultations with experts, professionals, and experienced users of hardware wallets.
Compare the models of hardware wallets from leading manufacturers according to various technical and functional characteristics and choose the best option for yourself.
By considering these important features, you'll have a much better idea of which hardware wallet is right for you.
Use a comparison table - here.
Note: Keep in mind the following tips that will help ensure the security of your hardware wallet, and therefore your crypto coins and tokens:
- No wallet is 100% secure. If you want to ensure the safety of your funds, the buck stops with you. The most secure wallet in the world is useless unless you properly follow wallet setup or security instructions, so exercise caution at all times.
- Only buy from a reputable seller. Only buy hardware wallets direct from the manufacturer or an authorised reseller since buying a second-hand wallet puts you at risk of hacking and theft. The list of official online stores of leading manufacturers of hardware wallets can be found here.
- Keep private details private. You should never disclose your hardware wallet's secure PIN and your crypto private keys to anyone.
- Don't lose your recovery seed. You need your recovery seed to access your crypto coins if your wallet is lost or stolen, so make sure you write this seed on a piece of paper and keep it safe. Better yet, write it on several pieces of paper and keep them all in separate but secure places. Consider purchasing a recovery phrase backup device like , for even greater peace of mind. CRYPTOTAG provides you with a safe way to save your hardware wallets recovery seed. The letters of the individual words of the Recovery Seed can be embossed into extremely resistant titanium with a single hammer blow. This keeps your backup much safer than on simple paper. You can find out in detail how this works in the review.
Conclusion
Crypto wallets are essential tools that crypto traders and investors worldwide use to store their cryptocurrency securely and without risks. Two types of crypto wallets include hot wallets and cold wallets.
Hot wallets are most of the time mobile Apps or computer software that you can freely download, without cost, to help store your crypto securely on your smartphone or computer. Cold wallets are hardware devices designed specially to store and secure crypto. As cold wallets are 100% offline at all times, they are much more secure than hot wallets.
Crypto wallets are suitable for traders that wish to hold on to their investments in the long term. It is not suitable for people who just want to day trade. Nonetheless, both hot and cold wallets are designed to be easy to use and most people will be able to master them within a day.
Learn more about the best TOP 30 hardware cryptocurrency wallets
You can see this list here.
TOP 29 Hardware Wallets, the Official Online Stores
| 1 |  | Trezor hardware wallet, the official online store |  |
| 2 |  | Ledger hardware wallet, the official online store |  |
| 3 |  | KeepKey hardware wallet, the official online store |  |
| 4 |  | BitBox02 hardware wallet, the official online store |  |
| 5 |  | CoolWallet hardware wallet, the official online store |  |
| 6 |  | ELLIPAL hardware wallet, the official online store |  |
| 7 |  | D'CENT hardware wallet, the official online store. |  |
| 8 |  | SafePal hardware wallet, the official online store |  |
| 9 |  | SecuX hardware wallet, the official online store |  |
| 10 |  | BC Vault hardware wallet, the official online store |  |
| 11 |  | BitLox hardware wallet, the official online store |  |
| 12 |  | Keystone hardware wallet, the official online store |  |
| 13 |  | ProKey hardware wallet, the official online store |  |
| 14 |  | NGRAVE hardware wallet, the official online store |  |
| 15 |  | Keevo hardware wallet, the official online store |  |
| 16 |  | GridPlus hardware wallet, the official online store |  |
| 17 |  | Ballet hardware wallet, the official online store |  |
| 18 |  | OPOLO hardware wallet, the official online store |  |
| 19 |  | Foundation (Passport) hardware wallet, the official online store |  |
| 20 |  | ImKey hardware wallet, the official online store |  |
| 21 |  | Tangem hardware wallet, the official online store |  |
| 22 |  | HashWallet hardware wallet, the official online store |  |
| 23 |  | Material Bitcoin hardware wallet, the official online store |  |
| 24 |  | ShieldFolio hardware wallet, the official online store |  |
| 25 |  | OneKey hardware wallet, the official online store |  |
| 26 |  | Blockstream Jade hardware wallet, the official online store |  |
| 27 |  | Cypherock hardware wallet, the official online store |  |
| 28 |  | Keepser hardware wallet, the official online store |  |
| 29 |  | NEXA hardware wallet, the official online store |  |
TOP 20 Best Metal Cold Storage Seed Phrase Backups, the Official Online Stores
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