Crypto Wallets: Getting Familiar and Making your First Trade

This post is going to get straight to the point — what is a crypto wallet, why do you need one, and how do you get comfortable managing digital assets.

With cryptocurrencies and NFT’s becoming more and more prevalent in mainstream media, you may be interested in seeing what it’s all about firsthand. You may also have heard instances of fraud, security hacks, or other unfortunate misuses of crypto assets. To kick things off, feel assured that setting up your crypto wallet is incredibly easy AND secure. This article will cover the following steps:

  1. Downloading a wallet
  2. Choosing a password
  3. Recording your seed phrase (<- the least familiar step to new users)
  4. Funding your wallet
  5. Purchasing cryptocurrency or NFT’s

Most of the requirements of maintaining a crypto wallets are the same for managing your banking or credit card app on your smartphone. Installation and set up is quick and easy. Once set up, the ongoing maintenance involves opening and checking your account balances or transfer activity as frequently as you prefer, just like following a stock on Robinhood. It’s that simple!

Downloading a Wallet

For the sake of simplicity, I’m going to recommend a single application — Coinbase. It is extremely secure and easy to use. If you want another option, MetaMask is also an extremely popular and very versatile application. As a note to choosing a wallet, do not feel like you need to attach yourself too much to a single option like you would with your bank. With bank accounts, there are minimum balance requirements, fees if your balance is too low, and accounts may even be closed if left stagnant for too long. None of these scenarios apply to a crypto wallet, so you can open 10 accounts, never fund them, and transfer your cryptocurrency easily between wallets instantly and with little to no effort. Isn’t it beautiful?

As each wallet has different benefits and there’s no disadvantage to having another wallet aside from the need to keep track of another set of passwords and seed phrases. That said, go find a Coinbase or MetaMask on the app store and hit download. Once downloaded, set up an account by entering your first name, last name, email, and password. None of this will be new to a first-timer who has previously set up any type of online profile. You may, however, consider choosing a password that hasn’t been used before on your other accounts. This is mainly for security purposes, so let’s dig into this a little deeper.

Choosing a Password

It goes without saying, but it is worth repeating: A strong password is critical to security of any app where personal or financial information is stored. With cryptocurrency, you can trade assets instantly with only a few clicks, and there are little to no recovery options if someone does this against your will. That said, it is highly recommended that you do not use a password that you have used before.

Passwords that have been used across other sites, including email, social media, guest checkout profiles for online shopping etc. are more vulnerable to attack because they are repeated many times and are often used for long periods of time. Consider this an opportunity to create something new! Here is a tip for a good password: it is helpful to use phrases that are meaningful AND easy to remember, like the following:

ILov3ToV@c@tion!

The result is a long password with a few of the letters swapped out for symbols that is fairly intuitive. Once you have the password set up, you will need to go through the email verification and need to set up 2FA. Now for the fun part...

Recording Your Seed Phrase

During the set-up process, you’ll be given a seed phrase. This is often the newest and most intimidating part for a new crypto users. Here’s why: Your seed phrase is a 12-word phrase that serves as a system-generated password. Most people will not commit their seed phrase to memory, especially if they open multiple wallets. This means it must be recorded someplace safe. A seed phrase is used to recover all the assets in your wallet irregardless of your password. Thus, the Seed phrase trumps your password, and must be kept safe and offline.

You’ll want to write down your seed phrase. It is important that you do not keep this stored on a computer (at least, one that is not encrypted). All of my personal seed phrases are written in pen on a piece of paper that is kept in a secure waterproof spot. For me, this is in a plastic bag inside the safe where I keep my passport, birth certificates, etc. It’s not going anywhere or getting accidentally thrown out.

A note of caution: If a newbie is going to get scammed in crypto, it is likely going to be because someone asks them for a seed phrase. NEVER GIVE OUT YOUR SEED PHRASE. Thats the basic rule. Only use it when you are restoring a wallet in that wallet’s landing page or application. Otherwise, no touchy!

While not included fully in this post, the next point worth at least mentioning is your “Private Key”. While apps like Coinbase keep this key encrypted and very secure, it is important that you NEVER give your private key to another person. Without going into too much detail, this private key is the way the blockchain knows who crypto assets belong to, and thus your private key is worth all your crypto assets associated with it. You may never see your private key, and that’s ok. Just know not to give it to anyone who asks :)

Funding Your Wallet

Once your wallet has been set up, the next step is to connect a bank/cash account. Coinbase offers access to link your bank, PayPal, debit card, and even a Coinbase gift card. Choose your preferred option and follow the instructions. This step is no different than linking a bank account for your credit card or other financial applications.

Once your bank account is linked, you can choose which cryptocurrency you’d like to purchase with Cash. Many Crypto wallets’ home screens include a dashboard with the most commonly used currencies, such as Bitcoin, Etherium, Polkadot, etc. You can simply tap on these currencies, tap “trade”, and then tap “buy Bitcoin with cash”. Specify the amount, and click through to buy… Congratulations! You’ve just purchased your first cryptocurrency :)

Conclusion

Now that you have some cryptocurrency, you can HODL it (crypto-slang for “hold it”), sell it back for cash, use it to make purchases of NFT’s, or send it to anyone in the world instantly! This new technology is is incredible and bound to change the world as we know it. So fly, be free, and explore the wonderful world of crypto! As you have questions along the way, it is as easy as a quick Google search or Medium article away from getting the answers you need. Good luck, and have fun!

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Cryptoholic

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