The choice of a crypto wallet depends on user preferences, such as security, frequency of access, amount of crypto stored, purpose for wallet, etc. How do you choose, download, and set-up a blockchain wallet? Keep reading…
Crypto wallets serve as both tools for interacting with the blockchain and storage for digital wealth (tokens, NFT’s, etc).
There are generally two types of crypto wallets
Hot wallets are basically in-device gateways (installed as an app, hooked to a browser as an extension or accessed through a website) that can connect to the internet on the go. Even if they are prone to hacks and attacks, they can also access the blockchain almost instantly.
Hot wallets can further be broken down into three types based on the access points they use:
Cold wallets are mostly offline vaults that function as storage for large amounts of crypto that in most cases are not accessed often. These wallets are, in other words, designed for cold storage. While they can also be used for everyday transactions, they are less flexible than hot wallets and one usually has to go through lots of security processes to gain access to these vaults.
There are two types of cold wallets:
There are two main ways to create a hot wallet: by generating a secret recovery phrase (for non-custodial wallets) and by registering on the host platform with an email (for custodial wallets).
Used by platforms like MetaMask, Phantom wallet, Trust wallet, sollet.io, etc.
The first two examples (Metamask and Phantom) will be used for this example as MetaMask is one of the most popular desktop wallets on the blockchain and Phantom is one of the most popular on the Solana blockchain.
They can be gotten and set up following these easy steps:
How to open a Metamask wallet
1. Visit the metamask webpage at metamask.io and click “Download for Chrome”
2. Click on “Add to Chrome” and then click “Add Extension” from the pop up notification. Your extension should download and install automatically to Chrome.
3. Next, you need to set up your new metamask wallet. To do this click on “Get Started” and then “Create a Wallet” on the page after that.
4. Next, read and agree to the metamask terms and conditions and then proceed to creating a password for your wallet.
5. The next page contains a video and information about “secret recovery phrase” A secret recovery phrase is a group of words that are the key to accessing your wallet on other devices and can be used to recover lost wallets so it is important that the user copies the phrase and stores it in a safe location (notes or cloud). After watching the video and reading all about SRP, Click “next” and proceed to copy your secret recovery phrase on the next page.
6. After copying and storing secret recovery phrase securely, click “next”
7. Users must re-enter the secret recovery phrase by selecting the order in which they appear. After selection, click complete.
8. Congratulations, your wallet is ready for use. You can now add custom tokens, buy, sell, swap and perform all wallet functions.
How to open a Phantom wallet
1. Go to the Phantom website at phantom.app, click download and select your preferred desktop browser.
2. Click “Add to Chrome” and then click “Add Extension” on the pop-up notification
3. In the next page, click “Create a new wallet”
5. The next page contains the “Secret Recovery Phrase”. After saving (writing down) the phrase, click the check box to confirm and then click “Continue”
6. The next page shows a keyboard shortcut to open Phantom anytime on your browser. Continue to the next page and there, click “Finish”.
Both the Metamask and Phantom wallets can be pinned to the browser for easy access.
Although other hosts use the pneumonic phrase generation feature, the process only slightly varies from host to host.
This is common on platforms like binance.com, one of the biggest crypto exchanges on the blockchain that also offers crypto wallet services.
A hot wallet can be opened on Binance following the these easy steps:
1. Visit the host website binance.com and click on ‘register’
2. Next, chose a sign up option
3. Next, enter an email address or phone number depending on sign in option, choose a password, agree to the terms and conditions and then click on “create personal account”
4. Enter email verification code and click ‘submit’.
5. You have successfully created a hot web wallet. Users can go on to verify their identity by submitting identity documents.
Since most web wallets also have mobile applications, users can conveniently use the same email address and password used to create the Binance web wallet to simply log into the Binance mobile wallet application or they can create an account on the mobile wallet using the same steps.
To create a Paper or Hardware wallet, the user must first generate wallet login keys using wallet key generating tools. It is advisable that once the webtool opens, users turn off their internet connection and generate keys offline. These keys once generated will only exist in the user's possession.
Here are a few easy steps:
1. Visit a wallet generating tool website like bitaddress.org and generate a new address. The user will receive two keys: a public key (which typically serves as login wallet address and is sharable to receive cryptocurrency) and the private key (which serves as login password and should be kept secret)
2. Make an offline copy by printing the keys to a piece of paper or simply writing it down.
3. The wallet is created and ready for transactions.
These keys can now be used on any hot wallet platform by simply logging in to access funds. Keys should be safely stored in paper form or used on hardware wallet devices.
To add funds to the wallet you simply need to share the public key and the cryptocurrency can be transferred to that address.
These processes are similar on most wallet generating websites across the blockchain.
Given that crypto hot wallets are more flexible and accessible but prone to security breaches and cold wallets offer limited access to funds with less safety risks, It goes without saying that a combination of both types depending on the need of its user is the best approach to wallet ownership, creation and interaction with the blockchain.
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