It’s forking simple! If you have a Bitcoin or Crypto wallet you are in control of your money, not the exchange where you bought it that could get hacked or shut down. You are in control. Wallets keep your coins safe, whatever happens!
This industry is new people and the tech has to catch up with the booming demand, and it will. For now, however, you have to take a bit of time and understand wallets. Its not as tough as you think.
Having the feeling of control is what most newbies lack when learning what wallets are and how to use them. For this reason, many people leave their money on exchanges where they have bought their Bitcoin or Cryptocurrency. These are called hot wallets or web wallets. It’s fine if you are trading on there but leaving large amounts on exchanges is not advisable. At the time of writing, December 5th 2017, questions are being asked about some exchanges and their practices. This will be the case for a while. Remember this is not a traditional market and in the main is not regulated. Its big time buyer beware. July 23rd update While may exchanges could be deemed for reliable than even just 6 months ago, the risk of a hack still is prevalent, get a wallet, be your own bank.
This industry is growing rapidly but many wallets still have bad user interfaces and often the instructions are not so easy to follow for someone new to this space. The options are growing and the whole usability issue even for the non-tech user is improving.
It’s important to remember you’ve come to this game VERY VERY early hence the profit potential, so sure, trade away but get some of your Bitcoins and or Cryptocurrency offline and in a hardware wallet. If your not trading and are holding long term which in our opinion is what someone new to this should do, then get all your Bitcoin and Crypto offline. Its what every industry professional will tell you is the best practice. These are the two best hardware wallets in our opinion, and we think everyone should have one.
As far as software wallets go blockchain.info has a wallet with an easy to follow interface. Some of the Hardforking team use it. Its associated with Ccoinmama which is the place some of our team bought their first bitcoins with a credit card. It’s the wallet Ccoinmama recommends.
Others in our team have bought Bitcoin with exchanges in small amounts and are happy to leave it there. Its all about managing risk. While hacks don’t happen every day they do happen. Yes, people also lose Cryptocurrency when sending it between wallets so take your time, send a small amount first. Get comfortable with what you are doing.
Another common practice is to buy on an exchange like Coinbase or Cex.io then move to an exchange offering one of the coins you want to buy like Stella Lumens Tron etc. The main entry exchanges are often limited to a few Cryptocurrency coin offerings like Bitcoin Litecoin or Ethereum. This is essentially moving from one hot wallet to another.
Just be aware that exchanges are not places to store coins they are places to trade them. I repeat don’t leave coins on exchanges if you are not trading.
Table of Content
4 Main Types of Wallets
1. Web wallets
Cex.io: A respected exchange that allows you to buy cryptocurrency using USD and EUR by sending through Master/Visa cards, Swift, bank transfers or by using other cryptocurrencies. Cex.io has excellent customer reviews, high order book liquidity which allows quick transactions between top cryptocurrencies and good security for your deposits.
Poloniex: It is also a peer to peer exchange like Localbitcoins, but it allows a much wider range of tokens to be bought and sold.
Coinbase: It allows fiat to crypto purchase using debit cards, visa card, etc. and then you can exchange them inside the wallet. Ots the main player in this industry for buying Bitcoin.
2. Mobile wallets
Mobile wallets allow you to have mobility with your crypto. They are susceptible to pick-pockets just as much as the phones they are installed on, so you need to store the private key somewhere very secure just in case you lose your phone. Also, do yourself a favour and avoid unsafe places!
3. Desktop wallets
While it is advisable to put your desktop wallet offline in cold storage, some desktop wallets offer online functionalities like coin exchange.
If offline, you can stow away your stash in a desktop that needs no maintenance, is offline and is password protected. Don’t keep your private key in, say, a word document in the same desktop or laptop!
4. Hardware Wallets
There are two main types of hardware wallets
Digital Hardware wallets
Once again we think these are very important to own but that’s just our opinion.
Yes. Old School style. Paper wallets can even be handwritten, but most are printed. It is a paper representation of any other of the wallets we have above, but the best ones are kept in cold storage for long-term holding.
It a good idea to have multiple wallets if you have what you consider a large amount of Bitcoin/Crypto, in effect spread your risk.
Hardware wallets for Bitcoin/Crytpo you are not trading with on exchanges is what most of us do. Its simply a case that once your Bitcoin/crypto is in a wallet that is yours ie not with an exchange, you have full control.
If you just can’t get your head around wallets then the safest option at the moment are recognised exchanges like Coinbase or cex.io. We are not financial advisors just people like you who went through the process you are going through. Some of us lost money on the Mount Gox exchange hack, some of us are traders and have our investment on exchanges and others bought some bitcoin and got it all offline into hardware wallets. The choice is yours, but take your time, start with small investments and keep learning. We will keep updating the latest options in the industry. We hope this article helps.