Important Things to Consider before Choosing a Cryptocurrency Wallet
A cryptocurrency wallet is a device that is used to access and manage one or more cryptocurrencies. A cryptocurrency wallet is a software that enables people to access and manage cryptocurrencies.
Cryptocurrency wallets are of different types. Each type is capable of catering for different user goals which may even require more than one type of crypto wallet to achieve.
Before you eventually settle for a particular crypto wallet, it may be important for you to conduct research on the types of crypto wallet options that exist and their characteristics, and determine how well they can suit your needs and crypto investment goals.
This article discusses some important things you should consider before choosing a cryptocurrency wallet to store, access, and manage your cryptocurrency:
Although online (hot) crypto wallets may be more convenient to use than offline (cold) crypto wallets, online wallets aren’t the most secure types of wallets.
If you are an active crypto investor or trader, or have a lot of cryptos, it is advisable to use a highly secure cold wallet to store most of your crypto assets offline.
Even if most of your cryptos are offline, you can always transfer them to an online crypto wallet whenever you want to make use of them for different purposes such as investing and shopping.
Important questions you may ask yourself when considering the most secure crypto wallets:
- is the website (for the crypto wallet) secure?
- what type of authentication does the crypto wallet use?
- are there online reviews about the crypto wallet?
(Note: You may have to search the internet for one or more websites that provide reviews for different types of crypto wallets.)
Some crypto wallets can handle different types of cryptocurrencies, while some others can’t. Many crypto wallets have their respective official wallets for just one cryptocurrency.
If you’re interested in one cryptocurrency, and not that interested in diversifying among many cryptocurrencies, then you can settle for the official cryptocurrency wallet that is designed to hold the particular cryptocurrency of your interest.
(Note: The official wallet of a cryptocurrency is usually found on the crypto company’s website.)
However, if you wish to have more than one cryptocurrency in a wallet, then go for a multicurrency wallet which is similar to the majority of online wallets that makes it possible for users to store different cryptos and make transactions between/among multiple cryptos.
3. Transaction fees
Transaction fees are a pressing issue for some crypto investors or enthusiasts. If it’s also an issue for you, especially if you’re involved in a lot of crypto shopping, then you need to research and find out the likely transaction fees you may have to be paying if you are using a particular wallet.
Knowledge of the transaction fees is very important to active crypto investors and traders who, when ignorant about transaction fees, may carry out a lot of transactions and end up paying more for transaction fees and earning less from their investments.
What is the point of being an active investor when you are incurring losses because of transaction fees?
Although not equally important to everyone, anonymity is another aspect you may consider when choosing a crypto wallet. Why? Because anonymity can give you an extra layer of security by helping you put a divide between your online presence (personal life information) and your crypto funds.
Some crypto wallets offer complete anonymity, while some others don’t. Anonymity makes it difficult for people to track and steal cryptos tied to your personal information.
If you want to be anonymous, especially if it will boost your security, then choose the most private wallets such as Electrum, BitLox, and Samourai, depending on your needs.