With hardware wallets, the developers don’t make money by charging you regular fees. Instead, they take fees for creating hardware wallets so that you never have to pay anything else.
Whether you want to get started with Bitcoin or you’re a professional trader, your coins are safer at an independent wallet. Sure, you can get a free wallet from a crypto exchange like Coinbase or Binance. And it’s easier to access Bitcoin while on these hot wallets, but your money isn’t safe there.
A lot of things can happen to a crypto exchange. It could be hacked leading to a loss of your coins. It could close down or suspend your account for dodgy reasons. These circumstances have happened to thousands of people out there. And they could happen to you too.
Of course, we are not saying something bad must happen if you store your coins at an exchange. But when you have a wallet, you get all of the following benefits.
Crypto wallets give you a platform to control your coins safely. No one holds your secret keys – Exchanges usually store the keys if you accept their free wallets. And you’re safer from hackers when you pick a cold wallet.
Vitally, you need a secure and trustworthy wallet for your coins to stay safe. If it’s not secure and has vulnerabilities, then there’s no guarantee your cryptos can’t get hacked. Likewise, it needs to be trustworthy, especially for hot wallets that keep your secret keys.
How can you tell a Bitcoin wallet is secure? Check for HTTPS encryption – marked by a padlock sign on the address bar. Then it should feature secure logins that . Another vital feature of a secure crypto wallet is a multisignature option to ensure a transaction must be authorized by more than one person.
If you care about anonymity, then look for a Bitcoin wallet that asks for minimal information. An email address is enough for the registration process. However, consider buying a VPN and using tor browser to further anonymize your transactions.
The free wallets you get at bitcoin exchanges are short-term solutions for your bitcoin storage needs. You can store your coins there for a couple of days. But if you want to HODL Bitcoin for the long-term, look for a wallet designed for long-term crypto use.
Cold wallets the Ledger Nano X or paper wallets are equal to the task. Hardware wallets are expensive but they are custom-tailored to store your coins for as long as you want. On the flip side, paper wallets are free but well, they are paper – they could get lost, tear, wash or burn away.
Against that backdrop, hardware wallets are the clear winners for storing crypto in the long haul. Many of them come with backup options. So, should you ever lose the USB-like device, you can retrieve your coins hassle-free.
Freedom and Convenience
A crypto wallet gives you a lot of freedom to spend your coins the way you want. See, you hold the secret keys required to sign transactions. And that means you’re in full charge of the coins. With this freedom, you could use your Bitcoins to buy stuff at shopping sites or send it to friends.
You could also use your crypto to fund online casino accounts – . Interestingly, you could qualify for up to five BTC in bonuses. All you need is to make a deposit and the operators will match your money 100%.
When you think about it, crypto wallets aren’t impacted by restrictions. You could conveniently access your wallet from any part of the world. We can’t say the same about wallets from exchanges, though. If Coinbase doesn’t operate in a country you plan to visit, accessing your coins could be difficult.
A crypto wallet is the only bank you can depend on consistently. To be clear, we’re talking about trustworthy independent wallets. If it’s not genuine product, then you could lose your money through it. If it’s safe, though, you can trust a Bitcoin wallet to store your coins for years.
Storage aside, you can also rely on a crypto wallet to help you access you coins whenever you need them. No need to make appointments or drive somewhere like it’s the norm for banks. If you feel like spending your coins, all you need is to find your wallet and complete transactions.
Fund Your Crypto Debit Card
If you would like to use crypto for payments regularly, there’s an easy and practical way to do it: prepaid debit cards. You get a normal Visa or MasterCard. But instead of dollars, euros or yens, you use to store Bitcoin, Ethereum and more altcoins.
You can use your debit card to withdraw money at thousands Bitcoin ATMs around the world. Or you could use it to shop conveniently. The way it works is that there’s an automatic feature that converts your coins into fiat currency. If you want to pay $100 worth of Bitcoin at a grocery store, the ATM takes out $100 BTC from your debit account for and remits the money to the recipient in a quick, stress-free manner.
For many crypto users, using wallets owned by exchanges means parting with more money for miners’ fees. It doesn’t matter what the companies say, they tend to cut significant portions of your coins. This is something you can avoid by using a third-party wallet.
With hardware wallets, for example, the developers don’t make money by charging you regular fees. Instead, they charge you to create the hardware wallets so that you never have to pay anything else. This makes transacting through these wallets cheaper because you pay the actual fees miners charge to confirm transactions.
It’s hard to trade crypto without a wallet. That’s why many Bitcoin trading websites give you a wallet to store your coins after you buy them. The problem: these wallets are supposed to be temporary solutions. You shouldn’t store your coins there in the long term.
Instead, look for an independent wallet, preferably a cold wallet. It might cost you some money. But it will provide better storage than any exchange.
Disclaimer: The opinions and views expressed in this article are solely those of the author and are not necessarily shared by Coinspeaker. We recommend you conduct the necessary research on your own before any investment and trading move.
Cirillo Ambrossi is the SEO expert with over 10 years of experience. He's worked on numerous projects in niches like online gaming, tech products, and web services.