Where to store crypto? Types of wallets
We continue the series of posts for beginners. We wrote about how to buy crypto here. In this post, we will analyze the types of wallets and choose where to store coins.
Wallet on the exchange (custodial)
After purchasing coins on the exchange, they are stored there. But is it worth storing them there?
Depends on your goals. If you are a trader and often trade on the stock exchange, then it’s worth it. It will be easier and more convenient this way.
However, if you bought crypto for the long or medium term, you should choose a different wallet.
Reason: the private key of the wallet is held by the exchange itself, and not by you. That is, if the exchange considers that you are conducting strange activities, it can calmly take away the crypt.
These are, of course, rare cases, but there is still a risk.
Non-custodial wallets
This is a completely different matter. On such wallets, the private key belongs only to you, so the crypt is (almost) completely safe here.
However, this is not without its drawbacks: the key can be lost.
When you register your wallet, you will receive a seed phrase - a 24-word code. And this is the only way to get into your wallet.
Losing the key means losing the crypt. It is either impossible or very difficult to restore it.
Therefore, treat it very carefully. Write it down on a piece of paper or a notepad and put it in a place where it won’t get lost.
*This code cannot be shown to anyone, of course.
This may seem like a big minus, but it is the price to pay for security. It’s worth paying for it if you store the crypto for a long time.
There is also a third type of wallet - cold, but it’s too early to talk about it.
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