Just like you need a bank account or a physical wallet to store your money, cryptocurrencies also need a wallet. This digital wallet consists out of an unique code (a string of letters and numbers). Make sure you secure your wallet as good as possible!
Every wallet will be secured with an unique set of words and a password. On top of that you can enable Two Step Authentication.
Web wallets – Coinbase.com and Blockchain.info are among the most popular web based wallets for Bitcoin and Ether. For each type of cryptocurrency, there’s another wallet service. Some services, like MyEtherWallet.com, support multiple currencies. These websites can be secured quite well, but will ALWAYS be vulnerable to hacks on the user and the server side of things.
Physical wallets – USB powered cold wallets are a very secure way to story your cryptocurrencies. Your wallet is not saved online, but on the device… which is a very secure way to save your data. Personally I’m using a Ledger Nano S. Another, slightly more expensive, brand is Trezor. Do come with new versions quite regularly, so it’s good to read about them a see what meets your needs. These physical wallets do NOT support every currency. The most common ones, like Bitcoin, Ripple, Litecoin and Ether are supported. The support for smaller currencies varies per device.
Paper wallets – The most old school of all wallets, is the paper wallet. Paper wallets can theoretically be made for every cryptocurrency. A Bitcoin one can be found on BitAddress.org and for Litecoin you need to be on LiteAddress.org. On WalletGenerator.net you can find support for many currencies.
These are websites, yes. To rule out any form of hacking or spyware, after your load the website, unplug your pc from the internet. Go Offline. Print the paper and keep it save, preferably in a safe. You can share your Public Address, because people, exchanges, businesses, clients etc. need to be able to send you coins. But NEVER share your private key! It it’s compromised, create a new key and quickly transfer all your coins to the new wallet.
Step by step on how to securely deal with paper wallets:
- Download the webpage.
- Run the webpage on an air-gapped PC or notebook (offline, never been online)
- Create a wallet on that system.
- Send a tiny amount from an existing wallet/exchange to the public address (eg. bitcoin address) that was generated by that offline wallet.
- Verify that the funds were received by your offline wallet by looking at the blockchain and seeing if money went to that address.
- Verify on the airgapped PC that the private key and public address match so that the private key is authentic and correct.
Above everything: Keep your data safe! Don’t think ‘Oh, it won’t happen to me’, because it can happen to everybody.