So you’re dipping your feet into cryptocurrency and you’ve made some of your first transactions. You’re going to need a way to store your assets, or technically speaking, your “private keys” or access to these assets. And while there are an array of options, getting started can actually be very straightforward once you have a little knowledge. Wallet options for storing your crypto are what you need to know about.
The simplest type of wallet is the one built into the exchange you use
Here, coins are automatically stored in your account. Exchanges assure customers that they’re secure, as many haven’t been the target of any major attack. But the fact is, on the exchange, your private keys and therefore your money is kept online at least some of the time, so naturally there is some risk of someone stealing your data. This includes app wallets on your mobile device as well. If you’re dealing with a small amount of money, these methods are very convenient. But once you accrue enough that you’re worried about losing it, a more secure option is your best bet.
Web and software wallets can be a little more secure
When you have money in an exchange like Coinbase, they are in charge of your private key and your assets. If you use a service such as MyEtherWallet or Metamask, two popular web wallets, you control your private key. Your wallet is only online when you are actively using it.
This process is slightly less convenient, in that now you will have to copy and paste your private key or scan a QR code to exchange money. For additional security, these web wallets are compatible with extensions that alert you of fraudulent addresses.
The most secure options are probably a hardware or paper wallet
A hardware wallet is a small device that typically connects to your computer via USB. It stores your private keys entirely offline. A hardware wallet, however, is a little less convenient, as it must be plugged in and verified for each transaction.
A paper wallet is basically just a print out of your private keys. It is often a choice for assets that you’re not planning on moving around any time soon. While a given hardware wallet is only compatible with certain coins, you can print a paper wallet for any asset. The main thing to consider about both hardware and paper wallets is that with these, you are solely responsible now for your private keys. So you must store them securely. Often this means using a fire and flood-proof safe.
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