We have recently published a post on how to buy bitcoin and other other cryptocurrencies in South Africa. The next questions are: how to store cryptocurrency safely and; what are the best cryptocurrency wallets available in South Africa.
In the very same post, I also touched on how to store cryptocurrency safely. In this post, I discuss the subject in detail.
Bitcoins and all other cryptocurrencies are, as you know, digital assets that live on digital devices. However, you still need a wallet to store cryptocurrency on your device. Even when you have a wallet, you still need to know how to store the cryptocurrency on your wallet in a safe manner.
What is a Cryptocurrency Wallet
A cryptocurrency wallet is a software or a hardware device that stores cryptocurrencies. In fact, cryptocurrency wallets store the public and private keys of your cryptocurrencies. A wallet comes with 2 sets of alphanumeric characters, the public keys and the private keys.
The public key forms the address of your wallet. Someone who wants to give you some bitcoin will need to send them to your public key.
The private key is secret code that you use to access your cryptos. Because it is private, it should remain private. Anyone who gains access to the private key can gain access to your crypto money, plain and simple!
Cryptocurrency wallets are different. Let’s discuss some of the best cryptocurrency wallets that are available in the market today.
The Best Cryptocurrency Wallets by Types
When you open an account at a cryptocurrency exchange site like Ice3X they give you a number of wallets. Each wallet is for each cryptocurrency they support on their system. They also give a wallet for your fiat money, like a wallet for South Africa Rand.
These wallets are called exchange wallets. Ideally, we use exchange wallets to keep cryptos for short periods of time. They mostly serve as temporary holders before we exchange our cryptos or move them to more personal wallets.
Exchange wallets are controlled by the exchange companies that run them. You don’t have total control of your funds stored in exchange wallets. There is no way to access your cryptocurrency private keys. The exchange keeps your private keys for you.
The Ice3x Exchange wallet is easy to use. They support over ten cryptocurrencies.
Not Your Keys, Not Your Coins
There is a popular saying in the crypto circles that says: NOT YOUR KEYS, NOT YOUR COINS. This means if you don’t have control over the private keys of your cryptocurrencies, the coins themselves may as well not belong to you. The one who has possession of the private keys is the owner of the coins.
Is this how to store your cryptocurrency safely? Well, it depends. The most important thing is: do you know how to store your cryptocurrency yourself without compromising your wallet private keys?
The next important thing; is what you intend to do with your cryptocurrency. If for some reason, you want to exchange your crytos back to fiat money in a shortwhile then an exchange wallet is an appropriate option.
Are Exchange Wallets Best Cryptocurrency Wallets?
For long term holding (or hodling) of your cryptos, exchange wallets are certainly not the best cryptocurrency wallets.
Why are Exchange Wallets not the best cryptocurrency wallets?
Well, cryptocurrency exchanges are vulnerable to cyber attacks. This is the case with almost all internet-based file storage. When an exchange gets hacked, you are likely to lose your cryptocurrency.
Mobile Wallets: Best Cryptocurrency Wallets for Daily Use
Mobile wallets are software apps that you download and install on your mobile device. They differ with desktop wallets below in that you can use them to make payments with your currency cryptos like bitcoin.
To use this feature you need to install a QR scanner on your mobile device to make instant payments at supporting retailers. As you can see, mobile wallets are great for everyday use, much the same as your bank debit card is.
Is this how to store cryptocurrency for long term? No. It is a good idea to keep only small amounts of cryptocurrency in your mobile wallet for daily use. The rest should be in safer wallets.
Best Cryptocurrency Wallet for Daily Use
Besides, we do not have many retailers in South Africa having cryptocurrency payment gateway at the moment. Having said that, for everyday use, mobile wallets are the best cryptocurrency wallets.
Another good thing about mobile wallet apps is that most allow you full access to your private keys. One not so good thing about them is that you can lose your mobile phone easily.
If you are going to use mobile wallets make sure you got some access-controlling feature enabled. When your phone gets lost, change your passwords as soon as you can.
Desktop and mobile wallets are slightly the same. They both come in the form of a software that you download and install on your device. Desktop wallets are full-featured cryptocurrency clients, with fairly high security and a wide variety of features.
Just like the exchange wallets, the software wallets come with numerous smaller wallets within. Each mini wallet is for each cryptocurrency the wallet supports.
They store your cryptocurrency safely. Most support a number of different cryptos and allow smooth exchange from one crypto to the other. Some of them can even display crypto values in multiple fiat currencies like the South African Rand.
Atomic Wallet and Exodus are my best cryptocurrency wallet apps among the desktop wallets.
Desktop Wallets: Best Cryptocurrency Wallet Apps?
Even though not the safest wallets around, desktop wallets are much better compared to exchange and mobile wallets. Let’s start by the positives.
Desktop wallets allow you total control of your cryptocurrency private keys. You can access and copy your private keys and store safely. The best way to store private keys is to print them on 2 to 3 papers and store in safe, separate locations.
Should it happen that you lose your desktop device, you’ll need the private keys to recover your cryptos. That’s how important they are. Getting hold of the your is the first in how to store your cryptocurrency safely. I can’t state this enough!
The Negatives: Desktop Wallets
Both the desktop wallets and mobile wallets are also known as hot wallets. This means that they operate online. You can only effect changes on a desktop wallet when your device is connected to the internet.
This is very dangerous as it exposes your wallet to cyber attacks like hacking and all sorts of malwares. Your desktop wallet is only as secure as your device. If you are going to settle for desktop wallets, you should start by making sure your device is 100% safe.
Word of warning: it’s a long read! But it’s worth its length in bitcoin!
If you have been using your computer without adequate malware and antivirus protection, you need to start by cleaning your system first. I am not going to go deep here. I refer you to internet safety experts, start here. Word of warning: it’s a long read! But it’s worth its length in bitcoin!
Your online security is only as good as your online practices.
I have my own practice not mentioned in the guide. I reserve the computer that has my desktop wallet only for the use of the desktop wallet. In other words, I limit the amount of time this computer connects to the internet.
Is this my best how to store cryptocurrency safely? No, it is not. But, when all the precautions are in place, this can be one of the best cryptocurrency wallets.
Hardware Wallets: The Best Cryptocurrency Wallets
As the name says, hardware wallets are hardware devices much like memory sticks that can store your cryptocurrency private keys in the most secure manner. Hardware wallets make it impossible for hackers to steal your coins.
They provide the ultimate in digital security. They are dedicated devices that can hold private keys electronically and facilitate payments. They are incredible small devices.
Hardware wallets generate a 24 word seed phrase offline and display it on their screen. They carry out this process offline, from the prying eyes of the internet!
They are secure for storage, sending and receiving transactions online. That means that you and only you have the private key to access your coins. And, you still have all the benefits of an online wallet. The developers make use of top grade cryptography and take them through continual scrutiny.
If you want to know how to store your cryptocurrencies safely, this is it. When coming to storing cryptocurrency safely, it does not get any better than this.
One thing about hardware wallets is that they are completely portable. They are tops! Click the image below to learn more about hardware wallets.
The other thing is, they don’t come for free. All the other wallets I have discussed are free to use. Hardware wallets are for-sale devices. For those of you with substantial holdings, this is how to store your cryptocurrency safe and secure.
How to Store Cryptocurrency Safe and Secure
Ledger hardware wallets are the best cryptocurrency wallets today. I strongly recommend you check them out and consider what they have to offer.
There you have it, the best cryptocurrency wallets by types. And that is how to store cryptocurrencies safe and secure!