Crypto Wallets 101: What is Good and How to Set-up
Cryptocurrencies, like fiat currencies, need to be kept in a wallet. Although cryptocurrencies are intangible, it is still an owned asset that requires easy access for deposit and withdrawal — similar to keeping fiat in a bank account where you are able to do transfers and make transactions without having to handle the actual cash.
We have different opinions of what makes a good bank to store our savings, and one of the key attractive factor is interest rates. Things pretty much run the same way for crypto, except that interest rates don’t come into play when picking the right “crypto bank”. For those who are new to crypto, you’d need to choose your crypto wallet wisely. The most important consideration point would be the security measures in place when depositing and withdrawing the cryptocurrencies.
Read on for a quick and easy summary of the available cryptocurrency wallets and some consideration factors when deciding which to use.
Different types of wallets
- Online– this is stored in Cloud and is incredibly easy to access. Much like an online PayPal account where you are able to store fiat currencies and log in as long as you have access to Internet.
- Mobile– your cryptocurrency is stored on a wallet App in your phone. This means that you can reach into your wallet wherever whenever as long you have your phone. This encourages mass adoption and usage of cryptocurrencies in daily life because who does not constantly have their mobile phones within reach these days?
- Hardware– your wallet is stored on a physical device such as a USB or card. Popular ones include Trezor, Nano Ledger or Tangem. It keeps things offline and away from attempts at hacking. The downside of this is that you will have to carry the item with you and there are risks of losing it.
- Paper– printing out your private and public keys on a piece of paper and keeping it in a safe place either at home or on you. While this is one of the safest and easiest, the biggest concern will have is if it gets wet or worse, lost or physically stolen!
What to look out for when choosing a wallet:
A multi-sig wallet needs multiple keys to operate. A wallet will be issued 3 private keys of which it can be distributed to 3 different people (i.e. the company, a user, and a trusted intermediary). For a transaction to be approved, at least 2 keys will be needed. This ensures an added layer of security as hackers or thieves will need to figure out and put together more than one key to retrieve anything from your wallet.
However this also means that if one of the persons with the key disappears, the whole wallet is as good as gone.
b. Software updates
Hackers are working daily and getting smarter and smarter, and hence it is as important that the wallet that we use is constantly upgraded too. Do look out for a wallet that makes an active effort to regularly enhance its software!
c. 2 Factor Authentication (2FA)/ PIN codes
One of the more popular forms of internet security, this feature will link your wallet to your phone number. Besides using your private key to access your wallet, a verification or temporary PIN code will be sent to your phone number for you to key in.
If you own multi-currencies, consider a wallet that can store different cryptocurrencies, such as Consentium. This allows for convenient access. However, if you prefer to have your cryptocurrencies separated, feel free to use a single-currency wallet.
How often and where will you be accessing your wallet from? If you’re only storing and working with it from home, then perhaps a hardware or paper wallet would work. But if you’re constantly on the go and use your tokens for payments, a mobile App will allow you to access your tokens quickly and easily. But bear in mind the risk of personal security.
If you’re looking for an easy-to-use and powerful wallet, try out our highly secured multi-currency wallet mobile App– Consentium. It allows users to transfer tokens seamlessly via phone number or the scanning of a QR code. The App also allows you to send messages to your contacts. You can download it from the Apple Store or Google PlayStore.