How to Get Started with Crypto
Getting started with crypto might seem confusing at first, but it’s easier than you think! Whether you want to buy crypto as an investment or use it for online payments, the process is simple when you know the right steps.
First, you’ll need a crypto wallet to store your digital coins, then you’ll choose a cryptocurrency exchange where you can safely buy, sell, and trade. It’s important to understand the different types of crypto, how to keep your investments secure, and the best strategies for beginners. This guide will walk you through everything you need to know about how to buy crypto, where to store it, and how to start your journey in the crypto world with confidence!
Getting a Crypto Wallet
When buying cryptocurrency, one of the most important decisions you’ll make is how to store your crypto safely. Crypto wallets allow you to store, send, and receive digital assets securely. There are two main types: hot wallets and cold wallets.
Hot wallets are sometimes called “online wallets” because they are always connected to the internet, making them convenient but more vulnerable to hacking. Cold wallets are often referred to as “offline wallets” or “cold storage”, as they keep cryptocurrency completely disconnected from the internet for maximum security.
Understanding the differences between them will help you choose the best option based on your needs.
What is a Hot Wallet?
A hot wallet is a cryptocurrency wallet that is connected to the internet. This makes it easy to access your funds and complete transactions quickly. Hot wallets are available in different forms, including mobile wallets, desktop wallets, and web wallets. Some of the most popular options include MetaMask, Trust Wallet, and Coinbase Wallet.
Since hot wallets are always online, they are more convenient for everyday use, such as trading or making payments. However, their constant internet connection makes them more vulnerable to hacks, phishing scams, and cyberattacks.
Pros of Hot Wallets:
✅ Easy to set up and use, even for beginners.
✅ Ideal for frequent trading and transactions.
✅ Free to use in most cases.
Cons of Hot Wallets:
❌ Higher risk of hacking and security breaches.
What is a Cold Wallet?
A cold wallet is a cryptocurrency wallet that is offline, making it much safer from hackers. There are two main types of cold wallets: hardware wallets and paper wallets.
Hardware wallets, such as Ledger Nano X, Tangem and Trezor, are physical devices that store your private keys securely. They only connect to the internet when you need to make a transaction, reducing the risk of cyberattacks.
Paper wallets are simply pieces of paper with your private and public keys written or printed on them. While they provide offline security, they can be easily lost or damaged.
Pros of Cold Wallets:
The safest way to store cryptocurrency. Not vulnerable to online hacking or malware. Best for long-term storage of large amounts of crypto.
Cons of Cold Wallets:
Less convenient for frequent transactions.
Hot Wallet vs. Cold Wallet: Which One is Best?
Choosing between a hot wallet and a cold wallet depends on your needs. If you trade or use crypto regularly, a hot wallet provides easy access. If you are holding a large amount of cryptocurrency for the long term, a cold wallet offers the best security.
Many investors use both—a hot wallet for daily transactions and a cold wallet for long-term storage. No matter which you choose, always keep your private keys secure and never share them with anyone.
By understanding the differences between hot and cold wallets, you can store your crypto safely after getting started with crypto investments.
What is a Mnemonic Phrase and How to Keep It Safe?
A mnemonic phrase, also known as a seed phrase or recovery phrase, is a series of 12 to 24 randomly generated words that act as the master key to your hot or cold cryptocurrency wallet. This phrase allows you to recover your wallet and funds if you lose access to your device. Since it provides full control over your crypto, it is crucial to keep it secure. The best way to protect your mnemonic phrase is to write it down on paper and store it in a safe place, such as a fireproof safe or a secure offline location. Never store it digitally, take a screenshot, or share it online, as hackers can steal your funds if they gain access. If you lose your mnemonic phrase, you may lose access to your crypto forever, so always keep multiple secure backups.
A nifty and effective way to keep it safe, it to engrave it or punch it on a piece of sheet metal, which is largely environment and water resistant. Storing your seed phrase in a Bank Deposit Box is another secure way to protect your Crypto.