If you have ever bought or traded cryptocurrencies, you have used an exchange like usdt wallet online. These platforms offer online cryptocurrency wallets with one key difference – they don’t give you complete control. Any cryptocurrency balance you hold on an exchange is a number associated with your account. This is because exchanges consolidate their users’ funds in multiple wallets, just like in a bank. Binance, for example, holds over $10 billion worth of bitcoins in a single wallet. Unfortunately, exchanges do not have the best reputation for keeping cryptocurrencies safe in the long run. While big names like Coinbase and Gemini are less prone to losing funds these days, the likelihood of this happening is still non-zero. And you can’t expect governments to support cryptocurrency exchanges. Unlike banks, most exchanges are not insured. Therefore, online wallets are the least secure option because they require you to trust third-party security methods. If you can take responsibility for using a software or hardware wallet, you should try to get your assets off the exchanges as soon as possible.
What wallet to use?
Whether you use a hardware or software wallet, there are hundreds of options on the market. This is because the choice of wallet is a highly subjective opinion. Here are a few factors to consider before choosing a particular product or service:
- Ease of use and user interface. Cryptocurrency wallets vary significantly in complexity and feature set. If you’re new to the ecosystem, don’t be afraid to choose a wallet that lacks some advanced features. Unfortunately, the most powerful and secure wallets are also the most non-intuitive for beginners.
- Philosophy of development. Open source is public for anyone to check or modify. There are many closed and proprietary options available these days. While there is nothing wrong with proprietary wallets, remember that you essentially trust the wallet developers.
- Community opinion. Considering the amount of money potentially at stake, it is a good idea to check the reputation of any wallet before downloading it. A simple Google review search should tell you everything you need to know about the reliability of a particular online ripple wallet.
- Asset support. The cryptocurrency wallet you choose must support the token you are about to deposit. However, many wallets now include support for dozens of assets at once. Hardware wallets are the most flexible in this regard, as they typically have support for hundreds of tokens.
Back up your wallet
Between 2009 and 2011, cryptocurrency wallets were not very intuitive and secure. The best example is the story of an anonymous forum user who lost access to 8999 BTC (a staggering $350 million today) for technical reasons. Due to the transparent nature of the blockchain, we see these coins now permanently appear on the Bitcoin ledger. They haven’t moved since 2010. Luckily, backing up your wallet isn’t hard, so you should prioritize backing up immediately. These days, almost all modern software and hardware wallets ask you to write a list of 12 or 24 words. These words, also known as the seed phrase, offer an easy way to recover your wallet and its private keys.
