The Simplest Way I can Describe Everything You Need to Know About Cryptocurrency. Here is a guide to cryptocurrency for beginners. We offer simple answers to questions like what is cryptocurrency, how does it work, what is Bitcoin, what is blockchain, how do I buy cryptocurrency, etc. Metaphor: Cryptocurrency is a bit like online banking without a central bank. This guide is about how to buy cryptocurrency for beginners in 9 easy steps. You will learn how to get started in investing in digital assets like Bitcoin, Ethereum, and other cryptocurrencies safely and securely step-by-step. I know this technology is complex and the process seems intimidating and I’m going to make this as easy as possible for you.

• Beginners Guide To Cryptocurrency Trading
• Beginners Guide To Cryptocurrency Wallet
• Beginners Guide To Cryptocurrency Ethereum
• Beginner's Guide To Cryptocurrency Investing
• Beginners Guide To Cryptocurrency Uk
• Learn Cryptocurrency For Beginners

Storing your cryptocurrency safely with a good wallet isn’t difficult, unless you don’t know the best crypto wallet to use.

Are you looking for the best way to keep your investment safe?

Is it hard finding the best wallet to secure your digital currency?

If you want the best cryptocurrency wallets for storing your crypto-coins, right here am going to show you almost all the wallets you can choose from to store secure your assets safely.

There is no way you will be using only one kind or type of cryptocurrency wallet, because we live in a world, where technology has made almost everything and anything possible.

Many professionals doing cryptocurrency trading, that always get different cryptocurrencies like using different wallets to safely guard and secure their investments – be it a big money investment or little pocket-money.

However, choosing the best cryptocurrency wallet for your multi Bitcoin cryptocurrency transactions, depends on specific needs you’re looking unto, and the level of security you also want for your investment.

Before we continue to know about the best crypto wallets for your cryptocurrency investment, I will like you to know that the best kind of cryptocurrency wallet, is the one that allows you to have full access to your private keys.

Investors are always advised to keep their wallet private keys safe in a very secured place that only them will know.

If you also ask me, I will say that for me, a multiple currency wallet will be the best for you, because it will serve as a universal crypto wallet.

Let me go straight and explain what cryptocurrency wallet is all about.

Shall we?

What is cryptocurrency wallet?

If you are considering investing in cryptocurrencies like bitcoin, or any of altcoin investment, that would be very great, but you will obviously need somewhere to store your coins.

It is from this place that you will store your crypto investment is where from, you will be sending or receiving all your crypto assets.

This storage place, space or device is the cryptocurrency wallet.

Crypto wallets comes in forms and kinds. These forms include hardware wallets, software wallets, paper and web online wallets.

Most of these kinds of wallets, especially the desktop software wallets runs in full nodes. This means that they always download the complete blockchain copy to get access to your cryptocurrency stake.

The full nodes wallets always takes time to synchronize with the blockchain to reach your stored cryptocurrencies. This makes them to create massive amount of data in offline storage of the device.

Alternatively, there is a lite version of the wallet known as, Simple Payment Verification (SPV) wallets which uses the full node, but this time, it uses full nodes that is hosted elsewhere.

This makes it helps to make it faster to reach blockchain network to confirm transactions. It also uses less space in the storage disk.

Multi vs single crypto wallet

A single coin currency wallet is the type that only supports only one type of cryptocurrency. These kind of crypto wallets are mostly made specifically for that cryptocurrency which they support.

For example, BitLox anonymous crypto hardware wallet is a bitcoin wallet made specifically for making bitcoin transactions anonymous.

In other words, multi-currency wallets are those cryptocurrency wallets that can support many crypto-coins at the same time.

As a cryptocurrency investor, you may have acquired many kinds of cryptocurrencies, so maintaining all of them with separate wallets can be very tedious, and overwhelming.

This is why you need to use a multi-currency wallet (universal cryptocurrency wallet) that can be able to securely hold all your crypto investments in one place at once.

However, some cryptocurrencies like; Ripple and Monero still uses their unique wallets. They’re not well supported by some of the best multi-cryptocurrency wallets in the market.

This means, you will need to get wallets that are made specifically for those cryptocurrencies.

What is a crypto wallet key?

A crypto wallet key is a very long alphanumeric series of codes or pass-phrases that unlocks your crypto investment wallet content, and in most cases, these pass-phrase called, seed words.

Seed phrase-words are unrelated words used to retrieve crypto assets stored in a wallet. Anyway wallet that uses these codes or pass-phrase is known as a HD (Hierarchical Deterministic) wallet.

In other words, anyone can have full control or access to all the cryptocurrency stored in your wallet, without the need to also have access to your devices (e.g. Personal computer, Mobile phone etc.).

This is how most people lose their cryptocurrency investments to thefts. So be very careful with where you’re keeping your seed word pass-phrases.

Wallet keys are used to create wallet transaction address. Crypto wallet address is an ID characters used to receive or send cryptocurrency from your wallet.

In HD wallets, wallet IDs can be created multiple times, and this helps to prevent you from sharing your private key publicly in the bid to transact with your cryptocurrency investment portfolio.

Thus, there are still some risk involve in sharing public address to other people. Especially, when they always recognize your address in any transaction.

Types of Cryptocurrency Wallets

Before we proceed, there are different types of crypto wallets according to how they store, or retrieve the cryptocurrency stored with them during transactions.

Hot wallet

These are the type of wallets that uses keys created by devices that has encrypted access to the Internet. These types of wallets requires access to the Internet to store or retrieve your crypto assets.

The device in which they are installed can be fully accessed remotely.

Though hot wallets are the most popular type of wallets do to its utility, they are regarded as highly unsecured technologically. In case of hack, they are always the very first target for most hackers

Cold wallet

Cold wallets are regard as the most secured type of wallets due to the fact that, they don’t need Internet access to send or retrieve cryptocurrency transactions.

They totally store your investments without the need to reach the blockchain using Internet. Example of wallets in this category are; hardware wallets, paper wallets and brain wallets.

Brain wallets are the ones that only give you pass-phrases, and password you need to gain access to your investment, while paper wallet is the type of wallet that you need to write, or print your pass-phrases to your wallet.

Hosted wallet

This is the type of wallet that is hosted or installed in a third-party server, which you don’t have any access to your private keys. The private keys are held in an online server on your behalf.

In the case of hack attack, these servers are heavily attacked due to multiple number of wallets that are stored in them.

See these servers, just like banks that holds your financial asset on your behalf. These servers are not insured or regulated by the FDIC insurance.

Decentralized wallet

This type of wallets is somehow the same with the cold wallets. It allows you the fullest access to your cryptocurrency transactions.

You will not need any third-party server, Internet or person to exchange your cryptocurrency with other platforms and investors.

It doesn’t increase your anonymity anyways.

Factors to know a secured wallet

Before you choose to start making use of any wallet, please make sure the cryptocurrency wallet has most of these features listed below…

1. Backup Private keys

To fully have control of your cryptocurrency investment portfolio, you will need a wallet that has a feature to back up its pass-phrase seed words.

This will help you to retrieve or transfer your money to another wallet in the case of misplacement or lose.

2. Two-factor authentication

This kind of security is called, Second-Level-Security. Some wallets interchange this feature with fingerprint in devices that has bio-metric sensors.

2-FA is that kind of security whereby, if a hacker manages to crack or hijack your password, they will still need to comment a special kind of code that will always be sent to your mobile phone number, before access to your wallet can be granted.

3. Multi-signature support

This feature is for when more than one person is making use of a particular wallet address.

To avoid misusing, multi keys is needed before a some amount of Ripple coins can be transferred out of such address that has multi-sign feature.

However, this feature can also be used by one person to fully protect their cryptocurrency funds lose from theft.

4. Not hosted on an exchange

A large number of cryptocurrency enthusiasts have used exchange wallets like that of; Coinbase and Luno online wallet to keep their investments.

This is not a good practice as there can be massive hack attack on the exchange, and the target mostly are on the wallets due the huge number of cryptocurrencies stored in it.

Generally, storing cryptocurrencies using exchange online wallet is not recommended for security purposes, and these exchanges will not allow you access to your private keys which they keep to themselves on your behalf.

This also means that, you don’t have any control of your cryptocurrency investment.

Avoid using exchange wallets to store cryptocurrencies unless you are using the platform to trade them while having a time-frame to move all of them to a more secured hardware wallet (Highly recommended).

Kinds of crypto wallets

This also brings us to discuss on the kinds of cryptocurrency wallets, how they are, and how they work altogether:

Hardware cryptocurrency wallets

Hardware wallets are mostly recommended, because they have very high security. They are easy to carry about, due the fact they look like USB devices, which allows you access to your private keys.

Ledger Nano S

Since 2014, Ledger company has been known as one of the companies in the cryptocurrency market, to produce one of the most secured wallets to store cryptocurrencies.

The Ledger Nano S comes with a LED screen that displays payment validation and PIN to confirm transactions. This device is very convenient and easy to carry around in your pocket.

Nano S features two-factor authentication. It comes with its own operating called, BOLOS, and has support for windows 7+, Mac OS 10.8+ and almost all Linux systems.

Ledger Nano S also has support for multitude of cryptocurrencies. It requires you to have it connected to your personal laptop with Internet access to work perfectly.

Ledger Nano X

The Ledger Nano X cryptocurrency wallet is the newest instalment of hardware wallets from Ledger. It’s aesthetically pleasing and extremely secure.

The Ledger Nano X has several lines of defence making it an extremely secure option for storing your cryptocurrency assets.

Through the use of a microchip and PIN Code, this device can only be turned on when a PIN is entered correctly, and once a certain amount of PIN code failures, the device will be wiped completely.

Don’t worry… Your crypto investments are still safe. This is due to another line of security known as your recovery phrase.

By default, Nano X may not have the necessary firmware for storage, but these can be easily installed. But according to the Ledger website, the device is capable of having over 100 wallet apps, including ALL ERC-20, and Ethereum tokens.

The Ledger Nano X currently supports over 1185 cryptocurrencies!

Trezor Wallet

Trezor is produced by SatoshiLabs. The Trezor team are the people to produce first hardware wallet using modern cryptography. The wallet has a LED screen display, which is used to get access to the PIN code.

Trezor One also has two-factor authentication feature used for verifying transactions. This device offers support for up to 500 alternative coins.

It is compatible with most operating systems like; Windows, Mac OS and Linux operating systems. Just like the Ledger hardware wallet, Nano S, you also need to connect it to a computer for it to work.

Cryptocurrency Software wallets

Beginners Guide To Cryptocurrency Trading

Software wallets are mostly secured mobile applications, or software made specifically for storing cryptocurrencies. Some of these wallets are also offline wallets, but still not as secured as hardware wallets.

Jaxx wallet

Jaxx to me, is one of the best crypto wallet app for both PC and mobile phones. It supports almost 70 cryptocurrencies as at the time of writing this post content.

It is actually a dedicated client for Windows, Mac and Linux – including an app for Android and IOS gadgets. It also has Chrome browser extension.

This cryptocurrency wallet application, Jaxx is also an offline wallet but uses Internet to synchronize and access the blockchain network when transacting cryptocurrencies.

Binance Trust wallet

Binance cryptocurrency exchange partnered with Trust company to release the trust wallet. This is the best mobile crypto wallet app, if you would like to take part in cryptocurrency airdrops.

It has support for only Ethereum DApps (e.g. ERC 20 and ERC 23) tokens. This is also a secured wallet to stored all your Ethereum based cryptocurrencies.

It is mostly preferred for mobile crypto wallet users.

Cryptocurrency Paper wallet

These are not really the best cryptocurrency wallets in the market, but it allows you to print, or write private keys on a piece of paper, which seem more secured.

But the risk of loosing your investment due to misplacement of the paper, or tear is higher than other wallets.

This kind of wallet are also among the most secured wallet, but it also comes with a risk of loosing your cryptocurrency investment if not kept away from water.

Online web wallets

This is a less secured and inexpensive way of storing your cryptocurrency assets, even though most beginners insist that they’re among best crypto wallets online.

These kinds of wallets are those wallets hosted in an exchange (like; Luno or LocalBitcoins) to temporally keep your investment, while using the exchange platform to do cryptocurrency trading.

It’s mostly not advisable to leave your coins on the exchanges for too long, to avoid loosing your cryptocurrency investment in case of hack attacks.

My final thoughts

The best wallets to be used for reducing the risk of loosing your cryptocurrency investment, are those wallets that doesn’t need to continuously have access to the Internet to keep your coins.

These kind of wallets are always secured from hackers.

Hardware wallets are highly preferred wallets you should have at your disposal as a serious crypto investor, to fully secure your investment from lose and thefts.

The best strategy to use other kinds of wallet, is to keep up a time-frame for keeping any cryptocurrency asset with these unsecured wallets.

If you have already chosen your best multi-currency wallet, and wish to buy your first cryptocurrency at best rate, I will recommend you use CoinSwitch, which is one the best exchange platform you can use right away.

The cryptocurrency transfer is always fast and swift.

To start trading coins for profit, you will need a genuine and reliable cryptocurrency trading platform, where you can start trading your Bitcoin for some other penny cryptocurrencies for income.

The Simplest Way I can Describe Everything You Need to Know About Cryptocurrency

Here is a guide to cryptocurrency for beginners. We offer simple answers to questions like what is cryptocurrency, how does it work, what is Bitcoin, what is blockchain, how do I buy cryptocurrency, etc.

Beginners Guide To Cryptocurrency Wallet

Metaphor: Cryptocurrency is a bit like online banking without a central bank. It is software-based, like an online banking platform. There is a ledger (called a blockchain), balances, and account numbers. You access your balances by using a password and can make transactions this way. Just like with online banking, you don’t need to know how it works under the hood to use it.

What is Cryptocurrency? Cryptocurrency is a type of digital asset that functions as a currency. The system that makes a cryptocurrency possible is based on cryptography (“crypto”) and a cryptocurrency is meant to be used like a currency (“currency”). With that in mind, not every digital crypto asset is meant to be used as a currency like the popular cryptocurrency Bitcoin is.

What is Bitcoin?Bitcoin is a software file stored on computers across the world that acts as a ledger of financial transactions called a “blockchain.” The ledger contains account numbers called “public addresses” associated with balances of Bitcoin. People can move around balances of Bitcoin if they have the passwords (or “private keys”) to those accounts using software called a “cryptocurrency wallet” (see description below). Bitcoin is the name of both this system and its unit of the currency. You can phrase it like this, “balances of Bitcoin tokens are moved around on the Bitcoin blockchain by creating transactions in Bitcoin wallets.”

What is Blockchain? Technically Blockchain is first and foremost a database protocol (a set of rules) for sorting data into “blocks,” but it’s easier to think of a Blockchain as a type of database. Essentially, it is a spreadsheet where data is stored in cells (or “blocks”) that are linked together in order by cryptographic codes called “hashes.” This database is generally decentralized and distributed on many computers instead of being stored in one central location or managed by one central entity. In Bitcoin, blockchain is generally used to describe both the public ledger where all transaction data is stored and technology (the protocol) behind the ledger. Many who aren’t believers in Bitcoin as a currency / digital asset are supporters of blockchain technology and its many applications both within finance and beyond.

On Being Decentralized and Distributed. Instead of Bitcoin being hosted on one computer or one company’s computers, Bitcoin is hosted on many computers by many different entities (it is distributed). Meanwhile, everything is either done democratically or is controlled by algorithms, so there isn’t a need for a “centralized” middle-man like a bank or government (it is decentralized). Bitcoin’s blockchain is in this sense both decentralized and distributed.

How is Cryptocurrency Different From Fiat Currency?Fiat currency, like the U.S. dollar, is controlled by central banks and controlled by states. It is legal tender and you can pay your taxes with it. Cryptocurrency, like Bitcoin, isn’t controlled by a central entity… but it isn’t legal tender and you can’t pay your taxes with it. Otherwise both fiat currencies and crypto currencies act as mediums of exchange and stores of value. With that in mind, some argue that cryptocurrency is a digital asset with exchange value, but not a true currency.

Can I buy things with Cryptocurrency? Cryptocurrency can be used as a payment method for any good or service that accepts cryptocurrency. The most common cryptocurrency used as payment is Bitcoin. As time goes on, accepting Bitcoin and other cryptocurrencies as payment is becoming more common. Check out a list of things you can buy with Bitcoin.

What are the Benefits of Using Cryptocurrency as a payment method? There are a number of benefits of cryptocurrency as a payment method. The main benefits of cryptocurrency in this sense are the often low transaction costs and quick transaction fees compared to other payment systems. On a good day cryptocurrency is the quickest and cheapest way to send money around the globe (XRP is a great example of this). Cryptocurrency is also an easy way to make payments online, especially for peer-to-peer transactions. Another big benefit is that cryptocurrency doesn’t require trust, which removes potential worry for both the sending and receiving party. Meanwhile, for some people in some states, cryptocurrency can act as an alternative to a states’ currency (which can be good if that currency is suffering from rapid inflation for example).

How do I Buy / Sell Cryptocurrency? One can buy and sell cryptocurrencies like Bitcoin via online brokers or exchanges like Coinbase or GDAX. Exchanges are like digital stock exchanges, but for cryptocurrencies. Learn how to trade cryptocurrency or check out our cryptocurrency investing starter kit.

Is Cryptocurrency Legal? In general, cryptocurrency is legal in every respect in the U.S. and much of the world. The only rules of thumb are 1. you have to pay taxes on it and 2. anything that would be illegal otherwise is also illegal with cryptocurrency.

Is Cryptocurrency Taxable in the U.S.? Cryptocurrency is taxed as an investment property, that means you have to tally profits and losses at the current market value of a cryptocurrency when you sell it, use it, or trade it and then pay the capital gains tax on profits in a calendar year. Please take time to learn about the tax implications of cryptocurrency.

What is an ICO? An ICO is an initial coin offering, a way for a new coin to raise money by offering a pre-sale of an up-and-coming token. ICOs are controversial. On one hand, some ICOs have been scams, on the other hand some states have worried that ICOs are mimicking securities without following the securities rules. One should do extra research before participating in an ICO.

Beginners Guide To Cryptocurrency Ethereum

What is a token? Token is a word that has a few different meanings in cryptocurrency. In simple terms, it just describes a cryptocurrency and its unit of value (a cryptocurrency = a token). For example one could say “I have 10 Bitcoin tokens.” The term is also sometimes used to describe cryptocurrencies existing on other coin’s networks. For example, the KIN ICO is a token on the Ethereum network. Lastly, encrypted bits of data that don’t contain identifying information are also called “tokens,” this type of token is also used in cryptocurrencies. In other words, what the term means depends on context.

How Do Transactions Work? Software called a cryptocurrency wallet (see below) is used in conjunction with an account number and password (technically public address and private key). The private key (known only to its owner, like a password) is used to create a signature that allows the owner to move around funds on the blockchain. Transactions are then secured on the blockchain in sequential blocks by “miners” (see the next section). Almost all cryptocurrencies work like this.

How Do I Store Cryptocurrency? In overly simple terms, you essentially “store” cryptocurrency in cryptocurrency wallets (see the next point for the technical details). For long term, you’ll likely want a “cold wallet”(where you store your private keys offline). For short term use, you might use a range of options or even temporarily keep funds on an exchange (but be careful, if it is connected to the internet, it is a “hot target”).

What is a Cryptocurrency Wallet? A wallet can be thought of as software that allows one to store cryptocurrency and create cryptocurrency transactions. This is a simple way to think of a wallet even though cryptocurrency isn’t technically stored in a wallet (instead public addresses are associated with transactions recorded on the blockchain, and thus are associated with balances, which the wallet software can read and display for you). More technically then, a wallet is software that allows you to store your private keys, view balances associated with public addresses, and create and sign outgoing transactions. With that noted, one must differentiate between wallets where you control your private keys (like the Bitcoin Core wallet), and custodial wallets where third parties host the wallet for you and are in control of the private keys (like the wallets on Coinbase or GDAX).

What is a Node? Since cryptocurrency is distributed many computers around the world have to run the software. Any computer running a copy of the software is “a node.” A full node runs a full copy of the blockchain.

How are New coins Created? When a transaction is created in a wallet it is broadcast to everyone in the Bitcoin network. For that transaction to be added to the ledger, users running mining software must solve cryptographic puzzles that let them add a block of transactions to the blockchain. The reward for adding a block is newly minted cryptocurrency. Thus “mining” is cracking puzzles to play digital accountant, and new coins are minted as rewards for mining transaction blocks.

How is Bitcoin Secure? Bitcoin is secure for two main reasons. 1. It uses a lot of one-way encryption that makes everything that is encrypted next to impossible to hack (it requires a ton of work). 2. It is distributed and so there is no central software to hack.

How does the cryptography aspect of Bitcoin work? At the core of Bitcoin, in terms of cryptography, is cryptographic hash functions. Key concepts include public-key cryptography and proof-of-work functions. If you want a crash course in the cryptography behind those terms, clicks those links and try reading the Bitcoin white paper: Bitcoin: A Peer-to-Peer Electronic Cash System.

What Happens If I Lose My Keys or if Someone Steals My Cryptocurrency? If you lose your private key, you lose access to the balances associated with it. If someone gets access to your crypto and they steal it, there is generally no way to resolve this issue. However, if you use a third party platform, like an exchange, and the exchange and not your account is hacked, then you might have recourse. The major exchanges tend to be good about reimbursing users in the case of a hack.

Beginner's Guide To Cryptocurrency Investing

How Can I better Secure My Cryptocurrency? Since losing your keys and theft are real issues, it makes sense to follow some best practices of basic internet security. Keep your keys backed up offline (learn more about secure cold wallets), don’t store all your crypto in one location, be careful about URLs (make sure the URL is the real one), use a browser dedicated to crypto, use two factor authentication on any account you can, choose strong unique passwords, and don’t use your public email to log into your accounts. Taking just a few of these steps will go a long way to protecting you, taking none of these steps is asking for trouble. As a rule of thumb two-factor authentication is a must, so make sure it is enabled on all platforms that allow it! TIP: Although there are exceptions to this rule, the main security risk with the major cryptos isn’t the software (the software takes a ton of work to hack) or the major exchanges (the major ones are ensured, keep most of their funds in cold storage, and have security teams), it is people not taking care to secure their accounts.

Beginners Guide To Cryptocurrency Uk

Is Bitcoin Anonymous? Bitcoin is pseudo-anonymous. Every transaction is recorded on the public ledger (the blockchain), but no identifying data is used. Everyone can see the transaction and the public wallet address associated with it, but no one knows who made the transaction (unless that person or entity makes that information public). Other cryptocurrencies have more or less focus on privacy than Bitcoin. Some cryptocurrencies, like Monero are truly anonymous (in theory). With Monero, not even transaction data is public.

What is a smart contract? A smart contract is exactly what it sounds like, a “smart” (software-based and programable) “contract” (a set of conditions that when met execute the terms of the contract). Smart contracts can be written to a cryptocurrency’s blockchain to create a trustless contract (a peer-to-peer contract that doesn’t require a middle-man or trust). Unlike paper contracts a software contract can execute any function that can be executed by the software once conditions are met. This means in theory smart contracts can replace real contracts, but also do anything software can do. Ethereum’s system relies heavily on smart contracts, anyone can create a smart contract on Ethereum if they have the native Ether token to pay the fee for using the system. TIP: Bitcoin transactions are smart financial contracts, but Ethereum allows for smart contracts for much more than just financial transactions. Ethereum’s contracts can distribute new tokens, double as insurance contracts, or anything you can think of.

On Being Peer-to-Peer and Trustless. An important feature of cryptocurrency is that it is trustless. The encryption, code, blockchain, etc all comes together to allow for a trustless peer-to-peer distributed and decentralized system. That sentence might sound jargon-y, but it contains some important points. At the core, the idea is that all the aspects of cryptocurrency come together to create a system that doesn’t rely on trusting your peers or trusting a middle-man. Contracts written to the blockchain are written in stone, there is no need for trust or middle-men to ensure the execution of a contract once its conditions are met!

Crypto Terms: “FOMO” is fear of missing out (an emotional response to seeing the price move a lot and wanting in). FUD is fear, uncertainty, and doubt that can affect prices of assets. “HODL” is a misspelling of hold from an old forum post (it today means “hold on for dear life during big price movements”). A “hard fork” is like a fork in the road, a copy and paste of software that allows each copy to branch off in a different direction (when this happens with Bitcoin the ledger is duplicated along with balances, meaning people get the newly forked coins for free). An “Airdrop” is a method of distributing newly minted coins to the wallet addresses of current coin holders. See a list of crypto jargon.

Learn Cryptocurrency For Beginners

Did I miss something or do you need something clarified? Just ask me a question in the comments below and I’ll answer it.