You probably have a wallet or money clip for your cash and credit cards, right? The same idea goes for altcoins. When you have cryptocurrency, you need to have somewhere to store it. That’s where crypto wallets come in.
But how do you put a virtual coin in a leather wallet or metal money clip? That’s not going to cut it.
So, let’s break down the best ways you can store your altcoins. And, like most things in life, it’s all about safety first!
A crypto wallet is a place to store your digital currency. There are a lot of different crypto wallets out there.
The main difference between the categories is if they are a hot wallet or a cold wallet (and no, we aren’t talking about temperature).
A hot wallet, not to be confused with a hot pocket, is connected to the internet. It can be accessed at any time. Most software wallets and exchanges fall into this category.
A cold wallet isn’t connected to the internet. So, you can store your crypto offline. It’s basically virtual “cold storage.” Since you’re offline, you can’t transfer crypto out of a cold wallet at any time. But, you can receive funds at any time. A cold wallet can be a hardware wallet, USB, or other similar data storage device.
So, if you’re wondering if you should go hot or cold, the answer depends on your goals. Most people use hot wallets to make frequent trades. If you’re going to hold onto your crypto assets for the long-term, then a cold wallet may also be a good idea. Plus, it’s easy to remember that way: if something’s hot, you want it out of your hands quickly. If it’s cold, you can hang onto it longer.
You can also mix it up and have both kinds of wallets. Keep a little crypto in your hot wallet for regular transactions, and keep the rest in cold storage where it’s safe.
As if that wasn’t enough, we can break the categories of crypto wallets down even further into subcategories.
Here’s a look at the main types of wallets to store your altcoins:
A paper wallet is considered a cold wallet. It’s a paper printout of your public and private keys. You can use a software program to generate a pair of keys, plus the digital file you need to print. Or some Bitcoin ATMs print out a paper wallet as a receipt as well (Coin Cloud DCMs don’t, because everything is 100% digital. But you can still use a paper wallet at a Coin Cloud machine if you want to).
A paper wallet isn’t connected to the internet. So, some people feel it’s safer. However, there are still risks because you can lose your paper wallet. Or, like, accidentally put it through the wash. Or spill coffee all over it. Or it could burn in a fire. So like, if you REALLY want to use a paper wallet, we recommend keeping it in a safe that’s fireproof and waterproof. Because you need the QR code on the paper wallet to access your money.
To set up a print-at-home paper wallet, you can use a wallet generator site which will create your keys and QR code at random.
Next up on our list is a hardware wallet. Like the name sounds, it involves hardware in the form of a USB stick, card or other external device. These are physical items that you can hold in your hand. They’re usually not connected to the internet, which makes them cold storage.
You usually use them by plugging into a device that can go online. Then you unlock the wallet, send your crypto, and confirm the transaction. Hardware wallets are really secure, but if you lose the device, you’re out of luck (unless you kept your private keys or seed phrase somewhere safe).
If you want a hardware wallet, some popular manufacturers are Trezor and Ledger. Ballet also makes hardware wallets, but they’re non-electronic and look like metal credit cards.
Come rain or shine, you can use an online wallet to store your crypto. Online wallets are online (obviously!) so they are… you got it, hot!
An online wallet can be accessed anywhere, from any device, and any location. Unlike a paper wallet in which only you have the keys, an online wallet is controlled by third parties who store your private keys online.
This is called a custodial wallet, and you don’t have full control of your funds with this type of scenario. You also can’t import your wallet to any other type of wallet application. Some popular custodial online wallets include the PayPal crypto wallet and the free version of the Coinbase wallet.
You have a 50/50 shot here to guess if software wallets are hot or cold.
Spoiler alert: it’s hot. Well, usually. Software wallets are those that you download and install to your device. It can be on a phone or a computer. Some people install them on a laptop that is then never connected to the internet, so that makes it a cold software wallet.
If you want to boost the safety of a digital wallet over a standard online wallet, you can consider a non-custodial wallet app. It’s like an online wallet in terms of convenience, and you do access it online the first time.
But you install it yourself, and the service provider has no access to your personal keys. Instead, you can access them from the app or use the 12-word recovery phrase to import your whole wallet into another platform or new device. The Coin Cloud Wallet is an example of a non-custodial wallet app. The main benefit here is that you have full control over your money. Plus, you can download it for free!
The Coin Cloud wallet lets you easily find the nearest Digital Cryptocurrency Machine (DCM) so you can buy and sell crypto using cash. If you’re cashing out, you can also reserve your money at the machine for up to 48 hours. That means you don’t have to wait for the transaction to process. Instead, you can initiate the sell from the comfort of your home and head to the machine to grab the cash once it’s finalized.
No matter what kind of cryptocurrency wallet you choose, there are some keys to keeping your keys safe (see what we did there?):
Okay, so now you have a new image of a wallet in your head, and it’s not that leather one in your back pocket (or purse, ladies — we see you). The wallet of your choice is waiting. What are you waiting for?
Interested in using the Coin Cloud Wallet? We can understand why. Feel free to download the Coin Cloud Wallet app here.
Disclaimer: The information and views supplied on the Coin Cloud blog are for educational and entertainment purposes only. We are not financial advisors, so please do your research and consult with a trusted financial specialist before investing your money.
Founded in 2014 in Las Vegas, Nevada, Coin Cloud is the leading digital currency machine (DCM) operator. With over 4,500 locations nationwide, in 48 states and Brazil, Coin Cloud operates the world’s largest and fastest-growing network of 100% two-way DCMs, a more advanced version of the Bitcoin ATM. Every Coin Cloud DCM empowers you to quickly and easily buy and sell over 40 cryptocurrency options with cash.
When You Buy $150 or More at Any Coin Cloud DCM
Use promo code COINCLOUD at the machine
Enter your email for updates, promos, and more ...