We have said this once and we will say it again; don’t leave your money on an exchange. It’s the only way to secure yourself from heists.
Hot vs Cold Wallets
Unless you are going to trade, keep your crypto stored safely in a wallet. There are two types and we will help you know which one to choose when.
What kinds fits me?
A brief rundown of it is that if you aren’t planning to trade often then get yourself a hot wallet. If you’re new and don’t want to invest in something expensive then go hot. But if you’re serious and plan for long-term HODLing then get yourself a cold wallet.
Now on to the details, a hot wallet is the easiest wallet to create once you buy your first cryptocurrency. Hot wallets are free hence more vulnerable to hacks but better than leaving your money on an exchange. Anything is better than leaving your money on an exchange.
They are free and pretty easy to set up. Variety of formats are offered like software, mobile, and online. It is important to remember that different wallets support different cryptocurrencies so keep in mind to pick something that fits your need. Here are some options:
Self-proclaimed #1 online wallet that stores the top guns like Bitcoin and Ethereum. Easy to use and with a clean interface, it is your best bid if you want to invest in BTC or ETH.
This works well with Trezor, a hardware wallet we will touch upon in cold wallets. It’s a little harder to set up in comparison but works well with multiple machines and supports Ethereum and every ERC-20 compliant token.
One of the pioneers that have been around since the early days (2011) that comes with a software wallet with added safety features. Unfortunately, this one has it’s options limited and only supports bitcoin.
This one’s an attractive, easy to use the wallet for those who can afford to invest in several cryptocurrencies. It’s great but only gets left behind because of one thing that it doesn’t have two-factor authentication making it slightly less secure than the rest
This one is your best bet when it comes to safety and security because all your coins are stored offline. If you won’t be accessing your wallet for months or years then cold wallet is the safest choice as long as they are used correctly.
These are free to set up and very safe to use. Although there is a little room for error unlike hot wallets or hardware wallet, there is no way to get back your private key if once lost or if your paper gets destroyed in a fire or something. They are for single use hence are better for long-term investments.
Hardware wallets are easier to use and contain, they are even more powerful and convenient as compared to a paper wallet. Both these options integrate well with hot wallets.
The Trezor and Ledger Nano S are both strong long-term options that connect to a computer via USB easily. What can be more convenient than that?!
Trezor works well with myetherwallet as it makes it easy to move ERC-20 tokens over to cold storage. Trezor and Ledger both offer two-factor authentication and way to store your private key in case you lose it. They both do a good job but what makes Trezor better is if your juggle with new coins and want to migrate them easily.
Ledger Nano S is faster in adopting new coins as compared to Trezor I that has its own way of storing ethereum and ERC-20 tokens. You have to install a software each time you want to use a different coin and you can only install up to four apps at a time. This makes the transferring process a bit more tedious.
Whatever you choose, don’t broadcast where you keep your money. Be safe and have fun!