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How to Set Up a Crypto Wallet?

Crypto wallets don’t hold actual funds, and that’s their crucial difference compared to actual units. Instead, they keep the information you need to access and trade your coins.
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How to Set Up a Crypto Wallet?

A crypto wallet helps you to manage and trade your digital assets. It’s necessary for keeping or trading virtual currencies. You might be thinking about getting one but don’t know how to install it. This guide will cover all the basics, including how these wallets work and factors to consider when choosing the right option. Here is what you need to know about using crypto wallets!

What Is a Crypto Wallet?

Crypto wallets don’t hold actual funds, and that’s their crucial difference compared to actual units. Instead, they keep the information you need to access and trade your coins. A crypto wallet keeps private and public keys that you need to access your BTC and other currencies on the blockchain. You use these keys to trade your assets and confirm transactions.

There’s a distinction between public and private keys. The public keys serve to get funds when trading, and you can share them with the sender. You should keep the private key safe as you use it to prove crypto ownership and approve transactions.

What Types of Wallets Exist?

  • Software wallets. These are also familiar as “hot storage” wallets.  You download the software and install it to manage crypto funds. There’s a certain risk of hacking, especially if you aren’t careful. You download software wallets to your PC or mobile.
  • Hardware wallets. These are “cold storage” wallets. You purchase a small device that looks like a flash drive. That ensures your keys remain offline, and you have different security measures that ensure your funds remain safe. The experts agree it’s the safest way to store crypto.
  • Hosted wallets. You host these on a platform like a cryptocurrency exchange. They involve using the service of a third party, and they often come with limited features.

How to Set Up a Crypto Wallet

The installation process depends on the wallet type. Before you pick a certain product, make sure it supports your desired crypto. Here are the steps to follow for each category!

Software Wallets

  1. Pick the desired wallet and download the software.
  2. Install the software on your device.
  3. Follow the instructions to set your wallet and add funds to it.
  4. Store private keys in a safe place.

Hardware Wallets

  1. Pick a suitable hardware wallet and purchase it.
  2. Once the wallet arrives, connect it to a PC with an internet connection.
  3. Follow the instructions on the screen to install the wallet.
  4. You’ll get a recovery phrase. Make sure to store it safely. It’s your backup option to retrieve funds if you forget the credentials to access the wallet.
  5. Some wallets support installing an app to access funds easily.

Hosted Wallets

  1. Pick an exchange or platform that offers a wallet.
  2. Register an account on the website.
  3. Add funds to your wallet.
  4. If possible, enable two-factor authentication and other security measures.
Coinbase Learn: How to set up a crypto wallet (Credit: Coinbase YouTube Channel)

Tips to Use Crypto Wallets Safely

  • Go with hardware wallets. The cold storage option is the safest way to manage and trade your crypto. If you keep keys offline, hackers can’t get ahold of them. Check out our selection of top wallets currently available.
  • Confirm that the internet connection is secure. You should avoid public hotspots or Wi-Fi networks you share with other users. Stick to your home network to access wallets, and add VPN protection if necessary.
  • Split your funds into multiple wallets. Even if the hackers manage to steal funds from one wallet, assets in others remain secure.
  • Make sure your device is safe. Installing firewalls and antiviruses can be useful. Also, make sure not to install suspicious software.
  • Don’t fall for scams. You NEVER share your private key. Scams like phishing emails are common but don’t fall for fake promises and malicious ads.

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