If you’re reading this article, chances are that you have at least some small amount of Bitcoin, Ethereum, or another cryptocurrency. You might be curious about how to safely store your coins, and we are here to help!
This post will cover the basics of what a crypto-wallet is and how to set one up on your desktop computer or mobile phone. We will also answer some important questions you may have about the subject before even buying your crypto coins. Let’s see how you can safely store your crypto coins after purchasing from crypto exchanges like Anycoin.
First, What Are Crypto Wallets?
Your cryptocurrency is a very valuable asset, but it’s important to do everything you can to keep it safe and secure. Cryptocurrency wallets are designed to store your digital currency and make it easier to securely buy and sell. It allows you to receive, store and spend tokens offline. Just like the way your bank account helps you store your fiat currency, your crypto or digital wallet is what you need to store your cryptocurrencies.
However, it is not as simple as it sounds. Choosing a crypto wallet to store your coins can be complicated. There are different types of wallets, and each has its own unique pros and cons. So you need to understand each type of wallet and then choose the one that is best for you.
What Are the Different Types of Crypto Wallets?
There are three main types of crypto wallets: hot wallets, cold wallets, and paper wallets.
- Hot Wallets: These are the most common type of wallet, and they are the easiest to use when it comes to sending or receiving cryptocurrencies. They are used online to store cryptocurrency in a digital form. Hot wallets are usually not insured by banks or insured by any third party. This means that if your private key (a string of characters) is stolen, it can be used to access your funds. Examples of hot wallets are Coinbase, Exodus, Robinhood, Mycelium, etc.
- Cold Wallets: Cold wallets are essentially offline storage devices for cryptocurrencies. While hot wallets may lose money due to hacker attacks or hardware failures, cold wallets do not have this risk because they are stored offline on an external device. Examples include Trezor, Ledger Nano, KeepKey, etc.
- Paper Wallets: Paper wallets are similar to hot wallets, except they require physical possession of the private key before you can gain access to your funds.
How to Safely Store Your Crypto Coins
#1: Do your research
Before you get started, it’s important to do your research. First and foremost, you will want to know what the most popular crypto wallets are. Next, you should read up on the pros and cons of each type of crypto wallet so that you can make an informed decision about which one(s) will work best for your needs. Once you can decide, go ahead and download the software wallet on your desktop or computer.
#2: Download the software wallet you’ve chosen
After checking the latest reviews and finding the best option for you, now go ahead to download the software wallet you’ve chosen. You can download it on your desktop computer or mobile phone.
Check to make sure that it is an official version, not a fake one, by checking out its website and looking for reviews online from other users who have used it before. If there is lots of praise and little complaints or negative comments about a certain product, then chances are that it’s legitimate enough and safe to download from.
Once you’ve downloaded your new wallet onto your device and opened it up, go ahead with creating an account as well as setting up 2FA (two-factor authentication). This will add another layer of security for all transactions made through this app should someone else get access to them somehow down the road. Otherwise, any transaction could be made without needing any passwords whatsoever!
#3: Create a new strong, unique password
Use a password manager. Password managers are software programs that help you store unique, strong passwords for all of your accounts. They can also generate random passwords for new accounts and store them in an encrypted database. There are many different types of password managers, including browser extensions and dedicated apps for mobile devices and desktops.
Create long, complex passwords with at least 20 characters using a combination of uppercase letters, lowercase letters, numbers, symbols, and even emojis! It’s important to use something memorable but hard to guess so that it’s not easy for hackers or other malicious actors to guess your account information if they’ve got access to it somehow (which is why it’s super important not just use “password1” as your password).
#4: Generate your new public key and corresponding private key
After installing the software wallet, it will generate a new public key (account number) and corresponding private key. This is what is needed to access your crypto coins. The public key can be shared with others, while the private key should be kept private at all times. Otherwise, anyone who knows your private key can access your funds.
If you lose your private key, you may also never be able to access your coins again because your private key is the only thing that can help you gain access to your wallet.
#5: Write down your private key and store it in a safe place
Writing down your private key is the most secure way to store it. It’s best to avoid storing it on any computer, phone, or other devices. You should also never share your private key with anyone and never send it over email!
Where should you keep the paper with your private key? Put it in a safe place and make sure no one can access it without your permission. If you have access to a safe deposit box or a vault, these are ideal places for keeping any important documents such as birth certificates, passports, and other personal documents against theft, fire, or flood.
#6: First test with only small amounts of money
If you’ve never used cryptocurrency before but want to get started, one of the best ways to do that is by using a small amount of money. This will allow you to practice making transactions and storing your coins safely. This will help ensure that when you invest in larger amounts and keep them in storage, it’s done right.
With that said, take some time to set up your crypto-wallet and make sure it’s safe as well as easy for use by everyone else who might use it! It’s well worth it for peace of mind knowing that all this hard work has paid off.
Best Practices for Storing Your Crypto Coins
- Store the bulk of your crypto coins in a cold wallet because it is the most secure option for storing crypto coins.
- Use hot wallets to store small amounts of crypto.
- Don’t leave your coins on a crypto exchange for too long – anything can happen to the platform, and your coins will go down with it.
- If you choose a hardware wallet (cold wallet), ensure to choose a password that is difficult to guess, and don’t share it with anyone.
- Write down and store your recovery phrases for your wallet in a secure place, and never share it and your private key with anyone. At the same time, don’t save them on your computer.
We hope that you now know how to safely store your crypto coins. It may take some time to set up your crypto wallet, but it is well worth it to make sure your money is safe. If you are new to the world of cryptocurrencies, take some time to practice storing them safely and making transactions with small amounts before investing large sums in them or trading on an exchange platform.