Best Crypto Apps and Exchanges for October 2022 | The Ascension by Motley Fool
Cryptocurrency wallets are a safe way to store your digital assets, but you really only need them if you plan to amass large amounts of crypto assets or want to spend your crypto easily. The cryptocurrency you own is protected by private keys — much like your PIN and bank account number. You use a wallet to store your encrypted keys and keep them safe.
There are two types of portfolio:
- Cold wallet. It is usually a piece of hardware that is kept offline, which makes it extremely difficult to hack. Cold wallets cost between $50 and $150 and are often considered the safest way to store digital currencies.
- Hot wallet. Hot wallets are connected to the internet, so they are not as secure. However, like normal wallets, they are a handy place to hold small amounts of crypto that you might want to use.
Until recently, when cryptocurrency became more mainstream, wallets were needed a lot more. In the beginning, several cryptocurrency exchanges fell victim to hacks. And at that time, if your crypto was stolen, there was no way to get it back. Thus, long-term crypto enthusiasts only use exchanges for trading and store their coins in their own wallets.
However, nowadays it is much safer to leave your coins at the exchange or brokerage where you purchased them. The best app for cryptocurrency will have excellent security and store your offline assets in cold storage. Several companies also insure the crypto assets they hold.
Also, some platforms do not give you the option to move your digital currencies. For example, the crypto platforms offered by Robinhood or SoFi Active Investing are designed for investment purposes. So if you bought Bitcoin with them, you will not be able to withdraw it from your account.
In contrast, some of the top exchanges, like Coinbase and Gemini, have built-in wallets. Like any good exchange, each also allows you to transfer your currency to an external wallet, although you may have to pay a withdrawal fee. You may need to find a wallet compatible with your exchange.
Think about what you plan to do with your cryptocurrencies before buying them. If you are invest for the long term and want to buy and hold, you might be happy to entrust your crypto keys to the exchange or brokerage. But if you plan to trade regularly or want to spend your coins, a wallet might make sense. In this case, you will have to look for the best app to exchange cryptocurrencies that will easily connect to your wallet.
Learn more: How to Safely Store Cryptocurrency
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