There has been a consistent rise in people’s interest in owning digital assets across the globe, including the United Kingdom. With this surge, there have been concerns about the right wallets that every investor can rely on to keep their digital assets safe.
A cryptocurrency wallet is the answer to the needs of investors who need to be sure that their investments are safe. Just like the ordinary wallets we use to keep our cards and cash, every digital asset owner needs a safe and secure crypto wallet.
In this article, we will look at the features and how to select the right crypto wallet in the UK.
What Are Crypto Wallets?
Cryptocurrency wallets help investors and traders keep their private keys, which are the passwords they need to access their cryptocurrencies. Private keys help to gain access to your cryptocurrencies, such as BTC and ETH.
Crypto wallets are software applications on mobile devices or computers. With the aid of the internet connection, they access the blockchain network a digital asset owner uses.
Beyond granting you access to your cryptocurrencies, you can send and receive cryptos on some wallets via different methods.
Why Cryptocurrency Wallets?
The technical reality behind your crypto wallet is that it doesn’t store your cryptocurrencies itself. This is because cryptocurrencies are not actually stored anywhere. They are bits of data. These data are scattered and stored over a database (blockchain).
So, what your crypto wallet does is access all these bits of data and present them as a whole in a specific value (amount) on its interface.
You can only gain access to this piece of data on your wallet through your private key. The key proves your ownership of the digital asset in your wallet. And the wallet is where you prove you are the owner by providing the keys.
Types Of Crypto Wallets
Before you choose your preferred wallet, it is best to understand the different categorizations of wallets that exist. The two categories are;
- The custodial and noncustodial wallets
- Hot and Cold wallets
- Software And Hardware wallets
The Custodial and Noncustodial Wallets
The custodial wallets involve the service of a third party, who will store the keys for a user. Usually, this involves an organization that provides an enterprise-level data security service and systems. Some cryptocurrency exchanges, such as Coinbase, offer custodial wallets for their customers.
Noncustodial wallets place the sole duty of safeguarding the private keys into the hands of the users. This is the commonest among cryptocurrencies on devices. A good example is the Metamask wallet.
Hot and Cold Wallets
Hot wallets can only be accessed with the aid of internet connections. It is either connected directly to the internet or with a device that is connected to the internet. A cold wallet, on the other hand, isn’t connected to the internet.
Software And Hardware Wallets
Software wallet
Software wallets are device-based. They are applications used on computers and mobile devices. It is a type of wallet that stores your keys on your devices. It can be a mobile app or a browser extension.
Software wallets can access users’ cryptocurrency, make transactions, reveal the balance, and help monitor portfolios, amongst others.
It is cheaper than hardware wallets, and at times, they are even free. Generally, software wallets are hot wallets because they require an internet connection to perform maximally.
Software wallets are helpful because they are easily accessible and cheap for users. However, they are susceptible to online hackers because they are remotely connected to the internet. Popular examples of software wallets in the UK include Trezor, Exodus, Mycelium, Swiss money, etc.
Hardware Wallets
Hardware wallets work in the opposite direction of the software wallets. Users can store their private keys on physical hardware that resembles a USB drive. Hardware wallets are more secure and safe than software wallets because they are not remotely connected to the internet. Hackers cannot access it.
With your hardware wallet, you can make transactions by plugging the device into your mobile device or computer. The Ledger Nano is one of the most popular hardware wallets in the market.
While a hardware wallet offers robust security for your digital assets, it is less accessible compared to software wallets. You need to carry them around with you and plug them into your device before you can access your assets.
Also, the hardware wallet device isn’t cheap. It can cost up to £184.99, and there is the possibility of a user misplacing it, in which case the user will lose all access to their assets.
As an investor, you’ve access to any of these types of wallets, depending on your preference.
Feature You Should Look Out For Before You Choose A Cryptocurrency Wallet
Before you select any crypto wallet, it is essential you know the right features you need to look for. These features are crucial in helping you secure your assets on whichever wallet you choose.
Below are the features to select the right wallet for your UK adventure;
Security
The importance of security as a primary criterion for selecting the right wallet for your assets cannot be overemphasized. Consider a wallet with robust security measures in place. An excellent wallet will give users access to a private key control.
Also, there will be a two-factor authentication as an additional layer of security for users to access their assets. As part of the security measure, backup and recovery options should also be available to users in order to protect them in the event of application failure, loss of device, or other unforeseen circumstances.
Users should have the faith that they will regain access to their assets.
Compatibility and User-friendly
Before you choose a wallet, ensure it supports your present cryptocurrencies and the digital assets you wish to procure in the future. Remember that different blockchain networks have their unique wallet requirements.
Also, select a wallet that is user-friendly. A crypto wallet with an intuitive interface will enhance users’ experience. If you are new to the crypto world, a simple-to-navigate wallet like Swissmoney would be great for you.
The Wallet’s Reputation
Don’t allow low fees to prevent you from doing your due diligence on a wallet before you choose it. Ensure you read reviews about other users’ experiences.
Reviews on popular platforms like Trustpilot and App stores will help you know if there’s any flaw in the wallet before you decide on it. You can also use forums such as cryptocurrency Reddit to receive current information about any wallet you want to select.
Fees customization/Cost
Great wallets support fee customization. They allow you to select the fees you pay public blockchain validators. Bitcoin.com wallet allows you to decide the exact gas price you want to pay for an Ethereum transaction.
Also, you can look for the type of wallet you want based on your budget, as there are free ones and premium wallets.
Customer Support
When you run across some challenges with your wallet, you definitely want to receive the best possible response there is. So, it is good to ensure you check out the customer support service of the wallet you want to choose.
Reading reviews about the wallet on forums can give you access to how good a wallet’s customer support is.
Conclusion
Choosing the right crypto wallet in the UK is possible. You just need to be armed with the right information, which is what we have done in this article.
Take your time to read through the various types of cryptocurrency wallets there is in the industry and look out for their features. Select the right wallet for you and your investments after you have carefully reviewed your options.
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