How to choose the best Crypto wallet and how to use the money
Cryptocurrency, the wave of the future, has enticed many. Investors are hoping to cash in on the increasing value of cryptocurrency, and business owners hope to accept and use cryptocurrency for transactions. The upward trend surrounding cryptocurrency is not going away, so anyone who has even the slightest interest in the currency should seize the opportunity to join the community now. As with all forms of investments, there are some extra steps involved with cryptocurrency, including using a crypto wallet. Cryptocurrency is a deregulated currency, meaning it’s not backed by central governments or banks. Because of this characteristic, to own or invest in cryptocurrency, you’ll need a virtual wallet that is compatible with the currency. Luckily, there are an increasing number of options that people can choose from, but it’s still important to research the wallets you are considering because there are a variety of options. For example, one could choose a hardware wallet, bitcoin trading platform that doubles as a wallet, or a standalone software wallet. We’ve outlined how to choose the best cryptocurrency wallet and how to access the funds from the wallet.
How to Choose the Best Cryptocurrency Wallet
There are many features to consider when looking for a cryptocurrency wallet. We’ve outlined the most pertinent here-
The first feature you should consider when looking for a wallet is security. Always check to ensure the website has HTTPS, which signals that the site has a strong security protocol. Consider whether the wallet offers two-factor authentication and secure login options. Another feature to look for a multisig option, which essentially requires more than one key to authorize the cryptocurrency transaction –think about needing two keys to secure a lockbox, it’s the same concept, but virtual. Speaking of keys, the wallet should offer an option for a provided key which will allow you to have more control over your cryptocurrency and how you move it in and out of your wallet. Privacy has been an increasing issue in cryptocurrency wallets, to ensure that you have privacy within your wallet, check to see if they promote address reuse or if each wallet uses a new cryptocurrency address. Transparency is another factor to consider; does the wallet have a transparent process about how they operate and how they secure the cryptocurrency? Lack of transparency is a big red flag. Similarly, choose a wallet that is reputable and has good reviews. Some wallets offer more anonymity than others. Anonymity is more preferential, so choose a wallet that either maintains anonymity or verifies your identification by preference. Choose a wallet that allows you to have a backup encrypted wallet in case of breach.
How to Access Funds from Cryptocurrency Wallets
Regardless of the wallet you choose, the steps for accessing funds are relatively similar for all of them. Once you’ve chosen a wallet and deposited cryptocurrency into it, when you want to withdraw, you will choose a “send” option of equivalent. When withdrawing, be aware that there are often fees associated with each transaction. You will need a receiving address to send the cryptocurrency, so you will need to set up a ledger live account to find a receiving address. Next, verify the receiving address. Return to your wallet, insert the receiving address, verify it and send the cryptocurrency to that address. It’s important to ensure you are sending the coins to the correct receiving address, so always double check those receiving addresses. Smaller payments can arrive in as little as 10 minutes while very large payments can take up to 10 hours to go through.
Also Read: What are cryptocurrency exchanges?
Top three Cryptocurrency Wallets
There are three different types of cryptocurrency wallets that one can choose from: Hardware wallets, software wallets, or wallets within trading platforms. They all have unique features and perks, so the choice will depend on your cryptocurrency goals. Hardware wallets offer unique security features that software and platform wallets cannot, platform wallets allow for seamless investing, and software wallets are more portable and versatile. Below are top examples of each.
1. Hardware Wallets
The Ledger Nano S wallet is known as the best overall hardware wallet. Rather than downloading software, the wallet is physical. With this hardware, there are a variety of security factors to ensure the cryptocurrency remains safe.
2. Trading Platforms
Some trading platforms, such as Bitcoin trading platforms double as a cryptocurrency wallet, which is helpful to reduce transaction fees for investors. If you are primarily interested in Bitcoin for investment reasons, then consider using a trading platform that doubles as a wallet to keep everything in a single, easy to manage location. An example of a top trading platform that doubles as a cryptocurrency wallet is Robinhood.
3. Software-based Wallets
If you are looking for a software based wallet, then consider Coin base, which is known as one of the best software wallets for cryptocurrency. The wallet provides private keys, holds multiple cryptocurrency, and has a variety of other security features in place.