If you want to find out how to get a crypto wallet, you’ve come to the right place. In this guide, we’ll talk about all the factors that you must take into consideration when creating a cryptocurrency wallet.

You’ll also learn about the types of crypto wallets, the difference between custodial and non-custodial wallets, and how to use each.

What Factors to Consider When Creating a Wallet?

Before you learn how to create a bitcoins wallet, there are several factors you should pay attention to:

  • Security: Since you’ll be using your wallet for transactions, security must be your top priority. Opt for a wallet that uses strict security features, like multi-signature and two-factor authentication. This also means that you should use only reputable exchanges.
  • Reasonable fees: Crypto transactions come with fees that vary depending on the wallet, blockchain network, and cryptocurrency of your choice. BTC transaction fees typically range between $1 and $3. This means you should choose a wallet with fees in this range. Likewise, get a wallet that offers customizable transaction fees.
  • Variety and compatibility: Give preference to wallets that, besides BTC, support other popular crypto coins, like ETH, USDT, BNB, and XRP. A good digital crypto wallet must also be compatible with all operating systems — from Windows to Linux and Mac, to Android and iOS devices.
  • Customer support: Lastly, pay attention to customer support and make sure it’s available 24/7 via live chat and email. Good customer support implies responsiveness, professionalism, and competence. It’s crucial to have an efficient way to get help with any issues you might have with your investment.

Types of Crypto Wallets

Crypto wallets are divided into two main categories — custodial and non-custodial. Custodial wallets are available as apps. However, non-custodial wallets are divided into software, hardware, and paper wallets. Crypto wallets can also be hot and cold.

Custodial vs Non-Custodial Wallets

two bitcoin wallets

Both have their advantages and disadvantages, and it’s important to understand the differences before choosing the right one for you.

Custodial Wallets

Custodial wallets store their users’ private keys with third parties, such as crypto exchanges. This wallet is centralized in nature. It comes in the form of a web application and can also be obtained through crypto exchanges.

These types of wallets are ideal for people who are new to the crypto world, as they are user-friendly. In addition to storage and transaction options, they also offer staking, trading, and earning interest. However, custodial wallets don’t allow DeFi and Web3 interactions.

Non-Custodial Wallets

This is a private crypto wallet that allows only its users to get access to private keys. Its holders have complete control over their funds, which makes non-custodial wallets more secure. However, it also makes them unsuitable for beginners. Non-custodial wallets are decentralized and they allow DeFi and Web3 interactions.

The main disadvantage of non-custodial wallets is the lack of recovery options. If the user forgets their private key, they won’t be able to access their account.

Non-custodial wallets can further be categorized into software, hardware, and paper wallets.

Software Wallets

A software wallet is an app that’s installed on a desktop or mobile device. These wallets are easy to use, however, since they are connected to the internet, they are more susceptible to hacking.

Software wallets can come as:

  • Web wallets — web extensions that store private keys on web browsers
  • Mobile wallets — mobile applications that store private keys on mobile devices
  • Desktop wallets — desktop applications that store private keys on a computer
Hardware Wallets

This is an external wallet that’s not connected to the internet, but to physical devices on which users store their private keys. Hardware wallets are less susceptible to hacking and cyberattacks.

Using hardware wallets is simple. Users connect their wallet to a computer or a mobile device and set a PIN code, after which they receive a public key.

The biggest advantage of hardware wallets is that they allow users to regenerate private keys. At the same time, their biggest flaw is the complicated installation process.

Paper Wallets

This is the most basic crypto wallet that’s based on QR codes. It’s basically a piece of paper that has a private key or QR code printed on it.

Paper wallets are not connected to the internet, which makes them cyber-safe. However, this means that they can easily be lost or stolen.

Hot vs Cold Wallets

Each of the popular crypto wallets you come across online is either hot or cold, in extension to being custodial or non-custodial. Let’s discuss how we differentiate the two.

Hot Wallets

The term hot wallets refers to wallets that are connected to the internet. Hot wallets can be accessed via computer or smartphone. Their biggest advantage is that they enable fast transactions and are usually free to use. 

However, these wallets also have their cons, such as greater susceptibility to hacker attacks and dependence on a third party that has control over the user’s funds.

Cold Wallets

Cold wallets take the form of a physical device — i.e., compact hardware that’s not connected to the internet. Moreover, this wallet doesn’t share private keys with third parties, which means they are under the control of the user. All the best cold storage wallets also provide recovery and backup utilities.

On the other hand, its main disadvantages are long transactions, limited accessibility, and high prices.

How to Set up a Crypto Wallet

A crypto wallet display showing amount of bitcoins available.

Setting up a crypto wallet is fairly simple, whether it’s a software, hardware, or paper wallet. Here’s how to do it.

How to Set up a Software Wallet

Step 1

Choose the wallet you want to use, go to its official website, and download the app to your desktop or mobile device.

Step 2

Create an account by entering your name, email address, and password. Some providers will also ask for additional verification, such as KYC documents and selfies.

Step 3

Transfer your funds from crypto exchange or bank accounts to your crypto wallet by entering your wallet address.

How to Set up a Hardware Wallet

Step 1

Choose the wallet that best suits your needs and buy it from a reputable manufacturer.

Step 2

Plug your wallet into a PC and install its software following the manufacturer’s instructions. After you install it, you’ll be able to connect it to your mobile device using Bluetooth or USB cable.

Step 3

Write down your pin and recovery phrase and keep them in a safe place.

Step 4

Transfer your funds by connecting your wallet to a crypto exchange of your choice.

How to Set up a Paper Wallet

Step 1

 Find a reputable wallet generator website and tap the Generate button.

Step 2

After you get your private key, save it and go offline to reduce the possibility of hacking.

Step 3

Print your private key and keep it in a safe place.

How to Use Crypto Wallets?

Crypto wallets serve multiple purposes, including sending, receiving, and storing cryptocurrencies. They also allow users to interact with DeFi and Web3 applications, purchase and sell NFTs, and earn crypto rewards.

Likewise, crypto wallets will store all digital assets on the blockchain. This means that they can only be accessed via the private key owned by their holder. These types of wallets are also used to transfer funds from bank accounts.

Conclusion

Now that you know how to get a bitcoins wallet working, you can make an informed decision and pick the one that suits you best. Make sure that your chosen wallet utilizes strict security measures. It should also accept many cryptocurrencies and be compatible with different operating systems.

Remember that custodial wallets are much easier to use, although they are less secure than non-custodial wallets. And finally, always use reputable sites when setting up your crypto wallet to avoid hacks.

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