Once the time has arrived and you have decided that you want to get into Bitcoin or any other cryptocurrency, you need to understand that there are more ways in which you can store it. When storing, biggest difference is in storing it into crypto exchanges and crypto wallets.
Hot wallets – Cryptocurrency exchanges:
Both cryptocurrency exchanges and cryptocurrency wallets have their advantages and disadvantages. If for example you find more cryptocurrencies interesting, and show interest in buying or selling one for another more frequently, you might want to store your crypto on crypto exchange. The benefit there is that the fees for exchanges are almost not even existing, whereas the handicap is that you have trust entity. With this said, it means that exchange owners can take away all your crypto, since it is stored on their wallet, which is part of the exchange. With that said, it is extremely important that you use the more popular and trusted ones, again said, on your own risk. Some of currently more popular ones are Coinbase, Bittrex, Kraken…
Cold wallets – Cryptocurrency wallets:
But if you are there just to get some amount of certain cryptocurrency, at least for the start, the better solution for you is to store it on crypto wallet. Advantage is that your money will be fully controlled by you, with no trust entities. Disadvantage is that if wanting to exchange that crypto for another, you won’t have option of getting it instantly for almost no fee, but you always have option of using instant exchanges like ShapeShift which have just slightly higher fees. In case you don’t plan to trade whole time, storing them on wallet would be much better solution.
Now if we take look on crypto wallets, we can also divide them into software wallets and hardware wallets.
Software cryptocurrency wallets:
They are the wallets that can be downloaded on your iOS or Android for mobile phones, or on desktop computers. Once downloaded, when starting you generate your own seed. Seed is a list of words which is used to recover all the information of your crypto wallet, if you would ever change your device. While when using software wallets, you also might risk hackers attacking your device. While those things are typically unusual, it is still recommended that you write down seed on piece of paper or something similar, and keep it away from documents in your mobile or desktop device. Some of the more popular wallets for mobile phones are Electrum, Mycellium, Coinhive, whereas for desktop is also Electrum, and Exodus.
Hardware cryptocurrency wallets:
Finally, comming to hardware wallets we came to the most secure way of storing your cryptocurrency. When storing your crypto in hardware wallets, you written off any doubt that you got hackers on either mobile or computer, stealing your seed. When using hardware crypto wallets, you have another source of security, because if you would ever get hacked, it would take hackers to physically steal your hardware wallet. Some of the most popular hardware wallets are Ledger Nano S and Tresor. They can be found for prices lower than 100 USD. If you consider holding some higher amount of crypto, you should definitely consider getting one of these, becuase the price is way to small compared to the amount of security it provides for your cryptocurrency holdings.