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Where to store crypto and how to create a bitcoin wallet in 2022
Choosing a reliable wallet is the next important step after buying bitcoin. In this article, we will discuss the most popular and secure cryptocurrency storage methods currently available.
What is a Bitcoin wallet
A bitcoin wallet is a type of digital wallet used to send and receive BTC. It is analogous to a physical wallet but instead of storing physical money, the wallet stores the cryptographic information necessary to access bitcoin addresses and carry out transactions.
A Bitcoin wallet can be either a device or a program. Contrary to popular belief, this wallet does not “store” bitcoins but provides cryptographic control over the blockchain address.
Difference between address, key and crypto wallet
To understand how a crypto wallet works, let’s take a closer look at main wallet-related terms such as an address, public and private keys.
A wallet address is a randomly generated set of numbers and letters which represent a type of unique number similar to a bank account number. It usually consists of 26-35 alphanumeric characters. This is how the first bitcoin address looked like: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa. Since the Bitcoin network is pseudo-anonymous, user transactions and holdings can be viewed by anyone who knows the public address of the wallet.
Bitcoin uses a cryptographic system with public and private keys.
The public key is the address (similar to an email address) to which other people can send their tokens and from which an owner can carry out transactions.
A private key is like an email password. Without it, owners cannot access and manage their assets.
Types of crypto wallets
Primarily, there are two different types of bitcoin wallets – hot and cold wallets. To choose a wallet that works best for you, it’s necessary to focus on a few basic criteria.
Hot wallets are a type of storage that require a constant Internet connection. Such wallets include exchange accounts, online services, smartphone apps and some desktop wallets. Hot services are always at hand and are a perfect option for carrying out frequent transactions. They are easy to install and set up. The EXMO wallet is an example of a hot wallet.
Cold wallets are cryptocurrency accounts that do not require a permanent Internet connection. They resemble a USB flash drive and are best suited for long-term storage of large crypto amounts that do not require instant access. These wallets include hardware wallets that store the user’s private keys. While these cold wallets offer increased security, they are inferior to hot ones in terms of convenience. To be able to work with them, you need two devices – the wallet itself and a PC with an internet connection. Another disadvantage of such wallets is their high cost: while hot wallets are often free, cold ones can cost anywhere between $50 and $200.
How to create a BTC wallet on EXMO
On EXMO, you can use an online wallet to store your crypto assets. To do this, you simply need to create an account and generate a wallet address and that’s all it takes. The EXMO wallet is suitable for storing not only bitcoin but also other cryptocurrencies. What’s more, both the web and mobile versions of the wallet are available.
How to top up your Bitcoin wallet
After completing the registration process on EXMO, you can top up your Bitcoin wallet:
- Log in to your account and go to the Wallet section.
- Select BTC from the list of all available crypto assets and click Deposit.
- In the pop-up window, you can generate and copy the address of your wallet. After making a deposit, you will see the BTC credited to your account in the Wallet section.
You can also top up your wallet by purchasing crypto at a set price through Simple trade or by creating an order in the Advanced trading section. Learn more on how to deposit funds.
Security precautions when storing bitcoin in a wallet
To minimise the risk of losing your crypto, follow a few simple rules:
- Try to use all available protection measures: a complex password, seed-phrase, SMS notifications, list of allowed IPs, etc.
- Enable two-factor authentication on your exchange account, as well as on the email you used when registering on EXMO.
- Use hot wallets only when you want to do something with your bitcoins: transfer, trade, etc.
- Keep large amounts of crypto only in cold wallets.
- Don’t keep all your coins in one place.
Following these simple rules won’t offer a 100% guarantee for theft protection but will allow you to significantly minimise the likelihood of it.