What is a Cryptocurrency Wallet, and How Does It Work?

Cryptocurrency investments have many similarities to other investments. They have potential risks and rewards; they require some research to get started; and they have some prerequisites that you need to know before getting started. That said, investing in cryptocurrency also works differently than traditional investments. For example, even though both types do come with prerequisites, the nature of those prerequisites is different. For example, if you invest in stocks you may need a broker or an account with an online investment platform. For crypto, you will need to manage your own digital wallet or sign up with an online exchange service.

What is a Cryptocurrency Wallet?

Just like your regular wallet stores your cash, a cryptocurrency wallet, or crypto wallet, will store your cryptocurrency. Unlike a regular wallet, however, a cryptocurrency wallet is completely digital -- it lives on your computer and/or your phone. . Also, unlike a physical wallet, many cryptocurrency wallets will only store cryptocurrency and will not store any other kind of currency (there are a few exceptions). More importantly, cryptocurrency wallets also store the keys that you'll use for any crypto-based transactions.

Types of Cryptocurrency Wallets

You can choose from a few types of cryptocurrency wallets. For example, many users opt for a cryptocurrency wallet app. These apps are appealing because they provide simplicity and mobility. With an app, you can carry proof of your crypto assets with you no matter where you go. Having that mobility makes it easier to make on-the-go crypto decisions. On the other hand, if you want to use an app but don't want to take that app with you, you can use a desktop app to perform the same functions as a mobile app.

Another option is to use a website or service as your cryptocurrency wallet. This option is similar to an app, but because it remains connected to the internet, it comes with a certain level of security risk. The trade-off is that these wallets are generally free to use.

The third option is using a physical cryptocurrency wallet. A physical wallet is a portable device that you can carry with you like your phone, or you can keep it in a safe place at home. These wallets can cost anywhere from $50 to over $200. However, they aren't connected to the internet, so they provide much more security than online apps and services.

Getting Started in Cryptocurrency

Of course, choosing the right wallet is just one step in the cryptocurrency investment process. You'll also need to choose what kind of cryptocurrency you want to invest in and how you want to get started. Once you've found your cryptocurrency wallet, use Bundlefi to find a local cryptocurrency expert at a bank. These days, more banks have started including cryptocurrency services in their offerings, and working with an expert has a lot of advantages over doing this process on your own.