Welcome to Crypto 101. There are a few options available and each provide different ways to store and access your digital assets like bitcoin. There are three specific categories of digital wallets available in the world.
1. Software (desktop, mobile or online) 2. Hardware 3. Paper
Software Wallets – 3 Types
Desktop wallets are downloaded and then installed on an individual computer. This wallet does offer high level security however if the computer were hacked or compromised by a virus, there is a possibility of losing the funds stored in the desktop software wallet.
Mobile wallets run on an app on your mobile phone. This type of wallet can be appealing to some because your digital currency is available in the palm of your hand and can be used at stores that accept digital payment. This is considered by some the least secure way to store coin due to the possibility of hacking as well as losing or damaging the device.
Online wallets run in the cloud and can be accessed from any device anywhere at anytime. Online wallets store the wallets private keys and some people view this as making the wallet more susceptible to hacking attempts and theft. So if an online wallet is chosen, selecting one that requires you to verify your identity & comply with Anti-Money Laundering/Know Your Customer laws (AML/KYC laws) is best. Coinbase for example also stores 98% of their clients digital assets in offline wallets and the other 2% is covered under their insurance policy which covers the clients assets in case of a security breach within their database.
Unique in the sense that you physically hold the private keys to your wallet in your hand. It looks like a small usb drive. They interact with a number of interfaces and can support multiple digital currencies, not just bitcoin. Once plugged in, the holder of the wallet simply enters a pin-code, amount to transact and hits send. So the hardware wallet still makes making online transactions possible by simply plugging it into the computer usb drive, but when unplugged, the assets are now being stored offline which adds an extra layer of security against online hackers and such, therefore increasing security of the wallet. The banner below with the nano s advertised is an example of one of the best hardware wallets available. Clicking the banner below will take you direct to the secure ledger wallet shopping website.
Simple to use and also provide a very high level of security compared to other wallets. It literally is a physical copy or printout of your public and private keys that you store in your home, safe or wherever you wish. The paper wallet software generates a public address that is used to transact over the blockchain but the user is the only one that can see the private address for the paper wallet and it should never be stored on a computer as that completely defeats the purpose of having the highly secure ‘paper wallet’. Transferring Bitcoin or any other currency is accomplished by the transfer of funds from the software wallet to the public address shown on the paper wallet. Alternatively, to withdraw or spend currency, all is needed to do is transfer funds from the paper wallet to the software wallet. This process referred to as ‘sweeping,’ can either be done manually by entering the private keys or by scanning the QR code on the paper wallet.
The reality is, if one chooses to use an online wallet there are inherent risks that can’t always be protected against. But the same can be weighed against an offline or paper wallet in the event of robbery or house fire ect.
Crypto 101 – Always do your own research and make your own informed decisions.
Wallets & Exchanges
Look for longevity, trust, security and country of origin when searching for a bitcoin and cryptocurrency wallet service and/or exchange. Once a member, the goal is to be able to buy/sell/store your digital asset as securely as possible. Any service chosen should require you to verify your identity & comply with Anti-Money Laundering/Know Your Customer laws (AML/KYC laws). If a service is NOT requiring this, l suggest moving on to a more secure platform. Most services allow you to link your bank account for coin purchasing . I recommended opening/using a bank account set up for online transactions only. Another option will be to link your credit card. I do not use this method, fees are usually higher and I don’t like that! Some exchanges only transact in Bitcoin, which means you can buy/sell a multitude of cryptocurrencies on their exchange, however, you will have had to send bitcoin to the exchange from an existing wallet in order to trade coins. Only YOU can decide which method is best for you.
Coinbase is a Wallet Service and Exchange. Also one of the industries oldest, established, recognized and respected crypto exchanges in the world. Based in the good old USA and available to 32 countries world-wide. On Coinbase, you can buy/sell/store Bitcoin, Ethereum and Litecoin. Coinbase also offers a VAULT WALLET for those looking for an added layer of security. Features I LOVE about Coinbase other than that it is a USA based company is that 98% of customer funds are stored offline. Offline storage provides an important security measure against theft or loss. As stated on their support page, 2% of digital currency held online is fully insured. This means that if Coinbase were to suffer a breach of its online storage, the insurance policy would pay out to cover any customer funds lost as a result. Coinbase offers complete transparency which is very important in Crypto Space.
Crypto 101 – How to sign up for Coinbase
Owned by Coinbase! Crypto 101 – You must have a Coinbase account to authorize GDAX. A more involved and comprehensive trading platform for those that are more experienced with trading and offers more in-depth charts, analysis and trade tools. The way to fund and withdraw from GDAX is through Coinbase their parent company. No fees apply. There is no deposit limit, a $50,000 withdrawal limit, no balance limit, and no trading limit. It is easy to zoom over to GDAX once your Coinbase verification is complete. It is also easy to send between platforms. For example. You send BTC from Coinbase to GDAX as you dabble in day trading and want to be able to set up stop/loss ect, then you decide you want to secure your holdings by sending it to your Coinbase Bitcoin Vault. No problem and very simple.
Once a comfort zone and knowledge base is established to the above platforms and to the offered coins, subsequently a natural curiosity to start exploring more options available in Crypto Space may manifest. Therefor, the need to find exchanges that can cater to those needs arises. At time of writing, there are over 1442 Cryptocurrencies and over 7540 Markets. Wow!
The full list of the Global Market Exchanges can be found HERE
Crypto 101 – How to create an offline ERC20 Ether Token Wallet – Store Ethereum and all ERC20 Tokens
Crypto 101 – Running A Full Node
Learn how to support the bitcoin network by running your own full node.
*** Crypto 101 ***
I am not a financial adviser. So please do your own research before joining any programs, platforms or exchanges and take responsibility for any decisions you make. All those decisions especially ones that result in YOU choosing to make investments are made at your own risk.
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