How to set up a crypto wallet

Acquiring digital assets is only half the battle, it’s just as important to keep them secure. To do this, you need to set up a crypto wallet properly. Today, crypto wallets are a whole industry involving the biggest players in the digital market.

If you want to set up a crypto wallet, you will have a hard time at first. Then you will understand the essentials and it will become much easier. Also, the set up process depends on different types of crypto wallets. However, before we get to the main topic, it is worth clarifying basic points about crypto wallets to make sure that newcomers to the crypto sphere are better informed. So, let’s start.

What are crypto wallets?

A crypto wallet keeps the private keys (and public ones) of the digital asset owner while providing a user-friendly interface for funds management. They are considered the safest option for holders of such currency. Now crypto wallets help store assets in both digital/physical locations (we are talking about a software wallet and a hardware wallet). The main features of a crypto wallet:

  • Using a crypto wallet is as easy as any other software.
  • High level of security and private key protection.
  • Instant operations without intermediaries and any barriers.

So, a private key allows you to monitor and manage your assets. When the private key and the recovery/secret phrase are forgotten, the user will lose access to all funds. If the public address gets lost, it can always be recovered if you have access to the private key.

How to сreate a сrypto wallet?

Before you start collecting such a currency you need to create and set up a crypto wallet. It’s not as complicated as it may seem at first glance. To start, you need to follow a few simple steps:

  • First, you need to choose a wallet that you will create and set up.
  • There are several options for further action (you will need to install the software wallet, buy a hardware wallet or register on the site).
  • The next step is to carefully set up all available security tools, including passwords, and the secret/recovery phrase.
  • Now you can start buying coins/tokens and send crypto to your wallet.

While some crypto wallets support only one currency, most offer multi-asset solutions. With their help, users can store several different digital assets at the same time.

Basic types of crypto wallets

Can’t choose a wallet? Let’s look at the main types to make it easier for you to make the right decision. There are cold and hot wallets. The former are standalone, and the latter type requires an Internet connection. Cold ones can even be touched, it can be the same flash drive.

Now let’s talk about the next type. If you have a deposit in a bank, you can easily imagine what a custodial wallet is. So, a custodial wallet looks like a deposit – you keep your funds on a certain platform and use additional services. All major crypto exchanges like Coinbase, Kraken, and Binance have custodial wallets. In this case, the private keys are available to the crypto exchange.

How to use a crypto wallet?

Decide on the type of wallet. For instance, if you choose a hot desktop option, you will need to download it to your device. Choose reliable programs with a good rating and the ability to work with several currencies at once.

When you select a hardware option, you will have to buy one. Also, pay attention to ratings and reviews. If you are going to buy crypto, be sure to check the rates on several exchanges. They may vary significantly.

How to сreate and set up a сrypto wallet?

When you choose a wallet, also pay attention to the ease of its creation and setup. How to install and set up a crypto wallet? The sequence of actions will vary on the type you choose. Now we will start with the most popular options.

Hardware wallet

This type looks like an ordinary flash drive. Hardware wallets are considered the most secure of all available options. Everything is very simple: you need to buy a hardware wallet and install the necessary software on it. The package will include setup instructions, so you won’t have any problems. You can also quickly connect the hardware wallet to crypto exchanges. Some hardware wallets allow you to buy an asset and download it to a flash drive for offline storage.

Software wallets

Today, software wallets are special apps that are downloaded and installed on the computer. They are also called desktop wallets. Once you’ve selected the software wallet, you just need to run it to start the setup process.

When installing the desktop version, you may also need to make a backup copy of your password. This will help you regain admission to your desktop app in case your computer crashes. There is no third party in this area that you can turn to for help if you forget your password. This type can be either warm or cold.

Hot wallet

If you’re setting up a hot desktop wallet, you’ll also need to download an app. Next, you create an account and set up strong security methods with a password and facial recognition. You also need to write down a secret/restore phrase (keep it in a safe place so you don’t forget). That’s all, you can transfer funds.

Custodial wallet

For this option, it is essential to find a reliable platform. So, you’ll not only secure your funds but also get the advantage of low commissions. You’ll need to create an account and enter some personal info to confirm your identity. The registration procedure takes a minimum of time, and then you can transfer your digital assets.

Non-custodial wallet

This is a tool for storing digital assets with the option of full control of keys and funds. The owner remains responsible for the security of the coins. Non-custodial wallets have many advantages. The main one is full control over funds and privacy of access to them. Non-custodial wallets are easy to set up. There is an option to create multiple accounts with one provider.

Which type is best for you?

The main thing you need from a wallet is to securely store your data. When choosing a suitable way to store your assets, think about how often you will use the wallet: only on the Internet or pay for goods/services offline. 

Some wallets offer convenience and ease of use, while others are better protected from hackers and scammers. Ultimately, only you can decide which type best suits your needs. So, when you send crypto to your wallet, you must be sure that it’s safe.