TYPES OF WALLETS
Before you start using cryptocurrency, you’ll have to set up a crypto wallet that can hold the public and private keys used to prove your coins belong to you. This can be an intimidating proposition for people who are new to crypto, but it only takes a few minutes. In general, there are four basic steps.
- 1. Choose the type of wallet that works best for you.
- 2. Sign up for an account, buy the device or download the software needed.
- 3. Set up your security features, including a recovery phrase.
- 4. Purchase cryptocurrency or transfer coins from another wallet or exchange.
***PLEASE NOTE THAT “COIN STREET—WALLET” WILL BE A dAPP THAT WE DEVELOP WHICH WILL ENABLE YOU TO OPEN A DeFi WALLET WITH EASE. WE WILL PROVIDE PHONE AND EMAIL SUPPORT TO ASSIST YOU IN THE PROCESS***
TYPES OF CRYPTO WALLETS
There are three basic types of wallets for virtual currency.
One option is a software wallet or hot wallet that stores your crypto on an internet-connected device that you own.
Another option to consider with added security is a cold wallet, a specialized piece of hardware that keeps your crypto offline.
Custodial wallets, which leave your crypto in the control of a company you trust, such as a crypto exchange, are another storage method to consider. The steps for setting up your wallet will vary based on which type you choose. Here are the primary considerations for each. Cold storage wallets, or hardware wallets, are typically considered more secure because they store your private keys offline.
Non-custodial software or “hot” wallets keep your data entirely in your control. Hot wallets are often free to use and may offer add-on services such as staking and lending.
Here’s how to set up a software wallet:
- Pick a wallet app (Coin Street—Wallet will offer this service) and download it on a desktop or mobile device; many software wallets have both options.
- Create an account. This process will be relatively easy compared with other methods because you don’t need to input personal information. Instead, you’ll need to create a security method such as a password or facial recognition.
- Write down your recovery or “seed” phrase. When you make your account, the app generates a random 12- or 24-word phrase corresponding to your private key. You won’t be able to access your funds without it. If you lose your login credentials or want to retrieve your funds on another device, make sure to store this phrase safely. We recommend storing this information in a number of places, e.g. Safety Deposit Box, personal safe, on paper in a hidden place. Please DO NOT keep your username/password and Seed phrase in the same place. Doing so would enable whoever found the information to access all your funds. In the world of FIAT currencies, this would be similar to keeping your debit/credit card details along with your PIN code in the same location.
4. Add crypto to your wallet. You can do this by transferring coins or tokens from another wallet or linking your account to an exchange in the app settings, which may require additional verification, especially if linking to a CeFi Exchange.
Hardware wallets are non-custodial, but they store your keys on a physical device that you can connect to your computer or phone through a USB plugin, WiFi or QR code. They cost around $50 to $250 and can be more complicated to use, but they increase your security by keeping your data fully offline.
Here’s how to set up a hardware wallet:
- Buy the device. Hardware wallets can be purchased directly from the companies that create them; some are available at stores like Best Buy and Walmart. Once it arrives, you’ll need to power it on, and you may be prompted to create a pin code.
- Download the software. Hardware wallet brands have compatible software you’ll need to install to set up your device and transfer funds. In addition, some desktop applications have built-in tools that can connect your wallet to exchanges or decentralized finance apps. When you create an account, remember to write down your 12- or 24-word seed phrase and keep it in a safe place.
- Connect your device. There are a few different ways to connect your hardware wallet to online software so you can transfer coins or tokens. Some devices plug into your computer with a USB cord; others connect wirelessly via QR code or WiFi. Your device should come with instructions on how to set this up.
- Add crypto to your wallet. Some cold wallets have features that help you buy crypto and load it onto your device for offline storage. Using your wallet address, you can also migrate tokens from an exchange or another existing wallet.
Custodial wallets, also known as hosted wallets, are managed by third-party providers. They allow users to store assets directly on the exchange for easy trading access. Custodial wallets also have built-in password recovery in case you lose your login credentials, making them a good option for beginners or users looking for a more hands-off approach.
Here’s how to set up a custodial crypto wallet:
- Find a trustworthy platform. This is especially important for custodial wallets, as your private keys aren’t under your control. (Coin Street—CeFi will be developed as a Centralized Exchange and offer you the ability to open an account and trade in Cryptocurrency without the need to deal with all the, sometimes ominous, intricacies of a DeFi Wallet.) The best exchanges for storing crypto protect your assets from security breaches and are easy to navigate. In addition, they provide some insurance against loss.
- Create an account. Once you’ve chosen your platform, find the registration page on a desktop or mobile device. Then, create an account by entering your email address and creating a password. You may need to enter personal information, including your legal name, address, Social Security number and date of birth. You might also have to enter a code sent to your phone number and upload a picture of your photo ID for verification.
3. Add cryptocurrency to your wallet. Your account on the exchange works as a wallet, so once you’re in, you can use your new wallet address to transfer crypto from another wallet. You can also purchase coins directly on the exchange by linking your bank account. With most exchanges, you can pay through ACH or wire transfer and use debit or credit cards. Fees sometimes vary by payment method.