Investing some of your spare cash is still a classic way to build wealth. When done right, the returns it offers can be impressive and help in creating a nest egg for the future.
Of course, many people invest as a full-time career, to make extra money as a second income or to get extra cash for treats. Cryptocurrency is one sector which has seen a lot of attention from investors over recent times. Bitcoin’s rally in August 2021, for example, certainly helped! But how does crypto trading work?
Investing in cryptocurrency is broadly similar to investing in other assets but does come with a few differences. One is the need to use a special crypto wallet to store your digital coins. But what are they, what types are there and how do you find one you can trust?
What is a crypto wallet?
It is perhaps easiest to think of them like a normal wallet you use for cash/cards – but specifically designed for cryptocurrency. These special wallets allow you to store your private crypto keys (the passwords you need to access your assets) safely and securely. These wallets also enable you to send, spend and receive any digital coins you have stored in them.
Why are they needed and what types are there?
A lot of this comes down to how cryptocurrencies operate. As these digital forms of cash use the Blockchain system, it means all participants need a specially designed wallet to access the system. In addition, crypto wallets cut down on the risk of anyone scamming the network by publicly sharing how much of a coin members have. Lastly, these wallets come with superb security specifically designed to keep digital cash safe.
In terms of types of wallet, there is a decent choice on the market. Desktop wallets, for example, use secure software to store coins on your computer’s desktop. There are also mobile wallets to use, hardware wallets if you prefer to store coins off network, and even web-based wallets. The decision on which type to use is a personal one, but you should always choose a wallet that is trustworthy.
Research various options online
Finding the best crypto wallet in the UK is not easy with so much choice on the market – but independent sites like AskTraders can help. This trusted website for traders covers the top crypto wallets to choose from in the UK plus gives lots of advice on investing in this asset. By looking through sites like this online, it becomes a lot easier to decide on which are the fairest wallets to use. Online trading sites like this can also give a good general overview of various wallets and help you find the one you might like best.
Talk to fellow investors
Of course, talking to other crypto investors and asking their opinion is also wise. That is because it enables you to get information direct from trusted sources. Ideally, this would be friends or family, but you can also use crypto forums to get advice from people whose advice you value. Asking around in this way is good because it not only indicates which wallets are legitimate but also any to avoid.
Stick with the big names
It is known in business that consumers stick with brands they know and trust. A good tip, therefore, is simply sticking with crypto wallets that are well-known and have been around for a while. While not all newer ones are scams, it is always hard to know if you can trust them to begin with. Therefore, to be sure you use an honest wallet, choosing a name with a good reputation and track record is vital. If you opt for a hardware wallet for example, Ledger is a brand which has a decent reputation in this area. Try to find companies with a similarly high stature – whatever type of wallet you go for.
Finding a safe and secure crypto wallet is vital
Depending on the state of the market and how much you buy, the coins in your wallet could be worth a significant amount. Therefore, the wallet you store them in must be 100% legit! If not, you could risk being scammed and losing it all. As well as the above tips, it is also wise to fully research the security features any wallet offers and make sure they have a range of ways to keep your coins safe.