Five Ways of Adding Cryptocurrency to Your Wallet

Cryptocurrency has been the rage in the financial world for the past few years, undoubtedly due to good reason. Many have invested in this currency and made a huge return on investments.

It is no surprise that cryptocurrency is on fire with huge profits, and many investors are eager to explore the innovative currency.

The primary reason cryptocurrency has attracted many individuals is due to the success of its main currency, which is Bitcoin.

The value of Bitcoin has shown significant gains. With its share of highs and lows, investing in cryptocurrency is risky. This instability puts every investor on edge, but the important thing to remember is that risks and benefits go hand in hand.

As you make investments, you will need to secure your crypto, and for that, you need a wallet. Several options are available, among which hosted, noncustodial and digital wallets are popular.

Choosing a wallet depends on what kind of safety net you want and what you want to do with your crypto.

One of the most convenient wallets to set up is hosted wallet, as a third-party application or service keeps your cryptocurrency in a virtual bank, giving you the confidence to explore investment options.

However, self-custody is the one for you to gain complete control of your crypto. You won't have to rely on a third party to keep your crypto safe.

Remember, as you can even buy bitcoin with debit card, you must have a wallet to ensure your investment is secure.

Let's look at a few ways to add cryptocurrency to your wallet to avoid loss.

1.   Setting up a basic crypto wallet

Although there are numerous similarities between a bitcoin wallet and a traditional online bank account, cryptocurrency protocols work differently.

Cryptocurrency transactions are irreversible, meaning there should be high standards when ensuring the security of digital money in the wallet.

However, before jumping into the process, you must understand a few terms, for instance, cold storage. Cold storage refers to keeping your bitcoin offline.

Though hot wallets are convenient to use daily, cold storage wallets function without the internet and are used for long-term storage.

2.   Choosing a Wallet

Before choosing a wallet, gain an understanding of how that wallet works to avoid financial loss. As mentioned earlier, aside from cold storage or hosted wallets, paper desktop or webpage wallets are also frequently used by investors.

E-wallets enable users to access the wallet from any device connected to the internet. However, security concerns put off investors from using this particular wallet. Another option is a desktop wallet that is easily downloaded onto your computer.

This wallet is safer to use than a mobile or e-wallet because there is no third-party involvement. A hardware wallet is unique because it stores private keys in a secure physical device.

A hardware wallet is more secure than paper-based wallets imported into the software.

After choosing a wallet, download your wallet from Blockchain.com or download the standalone Coinbase wallet app. Once the wallet has been downloaded, set up the account and security features.

Deposit your cryptocurrency after your wallet has been set up and features are in place. These steps will secure your transactions.

3.   Buying your first Bitcoin

Your wallet will not give you the option to buy or sell bitcoin, which is why you must find a trustworthy or low-cost exchange to send the coins from the deal to the wallet.

The ideal cryptocurrency exchange, especially for people who have just started, is Coinbase for multiple reasons. Coinbase allows users to buy bitcoin instantly due to the quick verification feature.

It has a simple interface to use, has a wide range of mobile apps for android and iPhone, and is FDIC insured.

Aside from choosing the exchange, three primary factors, reputation, speed, and fees, play a significant role in selecting the right one.

Reputation matters due to the number of exchanges turning out to be scams. The longer an exchange is around the increased likelihood of it being the talk of the town.

Another factor in selecting the right exchange to fund your wallet is the fee. Normally the price for credit card purchases is near 4%. Ultimately, it's important to understand how quickly you can buy and receive coins.

Before making a purchase, look at the waiting times and withdrawal limits for purchasing method of your choice. Credit card purchases are quicker than bank transfers.

4.   Keeping your crypto wallet safe

As mentioned earlier, a hardware wallet is an option for keeping your crypto safe. However, it does not make up for the ideal choice for every user.

Preventive measures you take to secure the cryptocurrency holding depends on its value. In a few incidences, investors purchase a 100$ hardware wallet to protect a 50$ cryptocurrency.

If you are concerned about cryptocurrency's security, there are a few ways to ensure that you don't land in financial trouble.

Custodial wallets are a safe bet when it comes to securing your investments. Over the years, many have lost their investment by entrusting the wrong people. These wallets prevent that by holding your private keys for you.

Besides holding private keys, custodial wallets offer two-factor authentication, which safeguards your investments from potential risks.

Aside from cryptocurrency safety, it would be best if you also considered the computer's or mobile phone's security.

The risk of losing cryptocurrency is significantly high if hackers access your smartphone or desktop.

5.   The final step

Apart from understanding the dynamics of cryptocurrency and setting up wallets, the most crucial step is to carry out a practical demonstration of withdrawing your crypto to the wallet. Wallets with an easy-to-use interface and a step-by-step guide prevent mistakes.

For instance, if you are withdrawing your crypto from your Coinbase account to a hardware wallet, select the send option and choose the coin you want to exchange from your account.

Since there is a withdrawal fee, be cautious of how much you wish to withdraw your crypto.

Create a Ledger Live account and follow instructions accordingly to set up your wallet address as the receiving address in Coinbase.

Confirm the address you provide, and after verification, your crypto will arrive in the wallet within 10 minutes.

Conclusion

Cryptocurrency has taken the finance market by storm, considering how many investors have made huge profits.

New and innovative currency has made it easy for many to invest and make huge profits without hassle.

However, where cryptocurrency offers benefits, it is no less than a risk that even puts professionals off balance.

Learning a few tricks and understanding the dynamics of cryptocurrency is key to avoiding significant financial loss.

Many experience losses due to a lack of security during withdrawal, putting all the efforts to waste. That is why investing in cryptocurrency is as important as securing it.