11 key things to consider before choosing a crypto wallet
There’s a lot to consider before deciding which crypto wallet is best for you. Here are 11 key things to consider before choosing one.
Cryptocurrency wallets are just as crucial as your bank account. A poorly secured bank account is susceptible to incursions by thieves online who try to get past encryption using brute force, phishing, malware distribution, and other methods.
If you’re serious about securing your hard-earned tokens, then choosing a wallet is a decision you must take seriously.
The crypto world has taken form and is taking the world by storm. With the establishment of NFTs, crypto is well on its way to infiltrating every industry globally. Everyone is scrambling to participate in the crypto flight by investing in cryptocurrencies and setting up crypto wallets.
Wrapping your head around setting up a crypto wallet can be tricky with the numerous crypto platforms and wallets available. Let us walk through some things you should consider before choosing a crypto wallet.
1) The type of wallet
There are two types of crypto wallets to choose from: the software and hardware wallets. As the name implies, software wallets are virtual wallets that require an internet connection to be accessed, and an example is a CoinStats wallet.
On the other hand, hardware wallets are physical and can be accessed offline. Hardware wallets win the security argument as it is safe from cybercriminals and hackers. However, software wallets provide layers of protection to keep users’ data safe.
Software wallets are higher on the rank for affordability as most of them cost little or nothing to download and set up, whereas hardware wallets can cost a small fortune to acquire.
2) Crypto wallet charges
Just like a bank account, a crypto wallet incurs charges. Many wallets are free to obtain and register; however, users are charged certain fees for transactions such as buying, selling, withdrawing, or staking on cryptocurrencies.
These charges vary from one crypto wallet to another. Before choosing one, you would want to consider the costs for different crypto wallets.
3) User experience
The crypto world can be very complicated, especially for a beginner. Therefore, crypto wallets are built for different classes of people, from beginners to intermediates and experts in the field. This is quite important when choosing a crypto wallet.
As a beginner, you’d want a crypto wallet that is more user-friendly and simplified to help you understand the process of crypto transactions. At the same time, an expert may prefer a more technical wallet.
Either way, you should go through different crypto wallets and note the user-friendly ones or those that are easier to understand and use before making a choice.
4) Available coins and tokens
There are numerous coins and tokens available on different crypto platforms. It is important to note that all the coins will not be available on every platform; hence, you must take note of supported tokens in each crypto wallet before making a choice.
You want to ensure that the wallet you choose supports the currencies or tokens you’re investing in or trading.
5) The reputation of the crypto wallet
Before deciding to use a particular crypto wallet, you should learn about its reputation. Learn about how they store users’ information and who has access to private details.
Dig deep to find out if they’ve had accidents in the past, such as data leaks or if the site has collapsed before. Proper research into their operations, as well as looking at reviews from other users, should help you decide if the wallet is a good one or not.
6) Backup and recovery features
Before you decide on a crypto wallet, take some time out to consider what would happen if you lost your device or forgot your password. You should do thorough research and check out the wallet’s backup and recovery features.
Would you be able to get your data back or access your wallet if your device is stolen or damaged? Can you find a way back into your account if you forget your password? These features are also important when choosing a crypto wallet.
7) Crypto conversions
Not every wallet is built with the ability to convert one cryptocurrency to another. Still, we can agree that it is an excellent feature that makes using a crypto wallet easier and more effective. Being able to carry out all your conversions and transactions from your wallet makes the process less tasking. You’d want to get a crypto wallet that supports the conversion of cryptocurrencies.
8) Shared wallets
If you’re setting up a crypto wallet that is not for personal use; it could be for partners or a group, you’re better off with a wallet that supports wallet sharing or multiple signatures. Shared wallets or multiple signature wallets are usually accessible by more than one person on different devices. They would also require signatures and approvals from all parties involved to authorize a transaction.
9) Total control of assets
Numerous crypto wallets allow their users to store their keys, giving them total control of their cryptocurrency and assets. This means the user controls transactions and exchanges that go on in the wallet.
Some other platforms do not give up this control to their users, and while the users may have access to the wallet accounts, they are not in control of all their wallet transactions.
10) Compatibility and adaptability
Another feature you should look out for in a crypto wallet is its compatibility with different devices.
Many crypto wallets are mobile-friendly, which allows you to access them from your mobile devices to carry out transactions even when you’re not with your computer. Other wallets are only compatible with computers, restricting you from using them only when you have a computer.
Furthermore, some wallets only allow one device login per time. This means that attempting to log in on another device could log you out of the first, which limits you from accessing your wallet from your different devices.
All these should be considered before choosing a crypto wallet.
11) Ability to interact with other wallet users
Some wallets only allow transactions with users of the same wallet. This could be a limiting factor if you intend to trade or do business with people that use other wallets.
It would be best to opt for a crypto wallet that permits transactions between other crypto platforms to make your transactions easier. Otherwise, you might end up having numerous crypto wallets.
What’s the right crypto wallet for you?
Choosing the right crypto wallet for you is just as important as making the right decisions during transactions or trades. The tips above are simple guidelines to make choosing easier; however, the choice of crypto wallet should be based solely on your preferences.
Some features may appeal to you while others may not. It’s best that you make a convenient choice depending on what you can and can’t do without.
If you can’t pick a particular wallet, it’s also a great idea to use a handful of different wallets is also a great idea. This grants you access to various features of other platforms, which collectively can help you create an impressive portfolio.
You can use a management tool like CoinStats to keep tabs on all your crypto wallets and manage transactions from different wallets efficiently and easily.