What is a Crypto Wallet?

A crypto wallet is a tool that allows cryptocurrency owners to store their crypto assets. It also allows them to buy and sell and sometimes trade cryptocurrencies. A crypto wallet typically provides owners with a unique address on a blockchain while you also get a private and public key. 

Hot wallets

Cryptocurrency wallets that are functional when connected to the internet are hot wallets. For example, exchange wallets and other trading app wallets. Most traders who conduct multiple daily transactions use hot wallets. Also, retail traders who don’t have many coins leave their assets parked on an exchange wallet. 

Pros

• Fast access to your crypto coins.
• Can be used from mobile or desktop.
• Beginner-friendly option.

Cons

• In case of a hack or malware attack your parked coins are at a greater risk.
• Losing access to the wallet or losing mnemonic keys means loss of funds.
• In case of exchange breach or hack, users may lose their funds. 

Cold Wallets

Cold Wallets are physical electronic devices that can be used to store cryptocurrencies. For example, Ledger hardware wallet. Most investors use dedicated third-party hardware wallets to store their crypto coins. 

Pros:

• In hardware wallets cryptocurrencies are stored offline, therefore the risk of hacking is minimal. 
• Cold wallets can store many different kinds of coins and it also ensures better protection of sensitive info. 

Cons:

• Expensive: Hardware wallets can be expensive.
• When trading or selling crypto coins, these have to be connected to the internet. 

Growing Your Crypto Wealth

The first step is to store cryptocurrency securely. Now that you know about storing cryptocurrencies safely you can also participate in activities to increase your crypto wealth. A few of them are cryptocurrency trading, staking, yield farming, and liquidity mining amongst others. In the next article, we will discuss the money-making opportunities from cryptocurrency investments.

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