Just as you need a wallet to protect your fiat money, debit and credit cards, it is also important to determine where to keep your cryptocurrencies. When you buy cryptocurrency on a trading platform, you have the option of keeping it or trading it. You can, however, transfer them away from the exchange or the trading platform to a personal crypto wallet, which can be software that is linked to the Internet (a hot wallet) or a hardware wallet (cold storage).
Here’s all you need to know about crypto wallets and why you’ll need one in 2022.
What is a Crypto Wallet?
A cryptocurrency wallet is software that allows you to engage with a blockchain network. To store and trade cryptocurrency, you must have a wallet address, whether you are a trader, a HODLer, or an investor. You can use your crypto exchange wallet, a mobile wallet installed on your phone or a hardware wallet.
How Many Types of Crypto Wallets Exist?
There are two types of crypto wallets: software wallets and hardware wallets. They may also be referred to as hot or cold wallets, depending on their operating processes. Here are a few examples to help you understand better.
Hot wallet: For example Binance exchange
Mobile crypto wallets: For example Kochure wallet
Hardware wallet: For example Nano ledger
What is a Hot Wallet?
Hot wallets or software wallets are connected to the Internet in some way. For example, when you open a Binance account and send funds to your wallets, you are putting them into Binance’s hot wallet. These wallets are simple to set up and provide instant access to funds, making them ideal for traders and other regular users. However, if you are based in Nigeria, it’s difficult to fund your account on Binance using your local currency – naira or withdraw directly to your bank account.
What is a Mobile Wallet?
Mobile hot wallets are specifically built as smartphone applications. They are very useful because they allow you to transfer and receive bitcoins via wallet addresses and even QR codes.
Mobile wallets are best for daily transactions and payments, making them an attractive option for spending and receiving bitcoin, Eth, USDT, and other cryptocurrencies. Kochure Wallet is a well-known mobile crypto wallet. An advantage of this mobile wallet is that you can easily buy crypto using your local currency – Naira. You can also sell your assets easily and withdraw to your bank account without the help of a middleman.
What is a Hardware Wallet?
Hardware wallets are generally physical devices for storing notable cryptocurrencies like bitcoins, USDT and Ethereum. Unlike the hot wallets, they are not connected to the internet before they can operate making them free from hacking because your crypto assets are obviously stored offline. One major problem with this type of wallet is that you can lose it if not kept properly and all your assets would be gone.
Why You Should Use a Crypto Wallet
If you are a cryptocurrency trader, using a hot or mobile wallet helps you to easily access your funds and trade. Your cryptos or digital assets can be generally protected if you have taken extra precautions to safeguard your crypto account with two-factor authentication(2FA) techniques and passwords. However, if you intend to HODL a big amount of cryptocurrency that you do not intend to sell soon, cold or hardware wallets are preferable alternatives because they are not linked to the Internet, making them more secure and immune to internet phishing assaults or hacking.
Here’s Why You Need a Crypto Wallet in 2022
Just like bank account numbers are essential in banking, crypto wallet addresses are essential in utilizing Bitcoin and other cryptocurrencies. Crypto wallets are one of the fundamental pieces of infrastructure that allow funds to be sent and received over blockchain networks. Each form of wallet has advantages and downsides, so you need to understand how they work before diving in.
Click here to download Kochure Wallet and enjoy fast and convenient crypto transactions.