Cryptocurrency changes our mindset regarding money, but before that, it is necessary to have some safe place to keep it. This is where crypto wallets come in. In this guide, we take you through how to create your own crypto wallet, from the kind of wallet to the setting up of the most robust security measures.
Why Would You Want a Crypto Wallet?
Cryptocurrencies are not like physical money; they exist in digital form only. You cannot hold cryptos, but you can surely keep them in a crypto wallet. This wallet acts just like a digital safe holding your lifelines in access and management of your cryptocurrency holdings.
There are two main categories of crypto wallets: hosted wallets and non-custodial wallets.
- Custodial wallets are wallets hosted by a cryptocurrency exchange, such as Coinbase or Gemini. They are very convenient and user-friendly. He trusts them with the security of your crypto because the private keys to the wallet are held by the exchange, and he just uses his wallet.
- Non-custodial wallets: These give you full control of your private keys. This obviously places the responsibility on you to look after your keys, but in so doing places you in full and secure control of your cryptocurrency.
Selecting The Right Crypto Wallet
So, what the best crypto wallet really is depends on what you need and what you prioritize in a wallet. Here are some key factors to consider:
- Security: Really important. Look for wallets with strong encryption, multi-factor authentication, and a good reputation for security.
- Ease of use: It is one of the features that make this platform very easy to use, especially for beginners in the cryptocurrency world.
- Supported Currencies: This ensures that the wallet supports the cryptocurrencies with which you aim to conduct your transactions.
- Desktop vs. Mobile: Go for a desktop wallet to be more secure or prefer a mobile wallet for convenience.
- Hardware Wallets: To up the security factor, consider hardware wallets—they are physical apparatuses that keep your private keys offline.
How to Make A Crypto Wallet
Once you have decided on a wallet, making it is easy. Here is a general procedure—note that steps may differ slightly depending on the wallet you get.
- Download and Installation: Download the Wallet app from the provider’s official website or app store (do not use third-party app stores).
- Sign Up: Register by following the on-screen directions. You may need to provide some basic details, like name and email.
- Backup Your Recovery Phrase: As you set it up, you will be given the recovery phrase—a random array of words. This will be somewhat like the master password for your wallet. Write it down carefully on a piece of paper, and make sure you keep it offline in a secure location. Don’t share this sentence with anyone.
Important note: your recovery phrase is very important for you to have access to your crypto in cases of device loss or forgotten password. Keep it safe and never store it in digital form.
How to Secure Your Wallet
Here are some of the basic security practices to get your crypto secure:
- Strong password: Utilize a strong and unique password for your wallet. Enable a two-factor authentication mechanism for added security.
- Software updating: Ensure your wallet has the latest security patches.
- Phishing Scams: Be wary of phishing emails or websites that seek to mislead you into revealing your recovery phrase. Do not share that information with anybody.
- Public Key vs. Private Key: Understand the difference between your public key (the one you provide to others to receive crypto) and your private key (the one you use to spend crypto). Keep your private key private.
Using Your Crypto Wallet
Once the wallet is all configured and secured, you can now use it to:
- Get Cryptocurrency: Share your public key with other people so they can send you cryptocurrency.
- Send Cryptocurrency: Transfer cryptocurrency to other users by providing them with your public key and the amount you wish to send.
- Buy and Sell Cryptocurrency: While some wallets actually allow the user to buy and sell crypto within the app, it is usually recommended to use a reliable cryptocurrency exchange for bigger transactions.
Congratulations! You have just made a step into the world of cryptocurrencies. Remember, there can never be anything of a higher priority than security. These steps and best practices in securing a crypto wallet build confidence in the management of digital assets.
Timothy Jensen is an expert writer who specializes in the world of cryptocurrencies, including blockchain technology and Bitcoin. He has a passion for explaining complex topics in an easy-to-understand way. Timothy’s work aims to demystify the digital currency landscape for his readers.