Key points:
Crypto wallets come in many forms. Custodial wallets are easy to set up, but offer less control.
Non-custodial wallets give you complete control, but you are fully responsible for the security of your keys and assets.
Hardware wallets guarantee reliable protection against hacks and exploits, but are relatively expensive and not so convenient for beginners.
In this guide, we will introduce the different types of wallets and show you how to set up a crypto wallet in just a few steps.
Introduction
Getting started with cryptocurrency? The first thing you will need is a crypto wallet! Cryptowallet is a tool for sending, receiving and storing cryptocurrencies and digital assets. They come in many forms, each with its own advantages, limitations, and risks. Let's take a look at the different types so you can choose the best cryptocurrency wallet that suits your needs.
Custodial wallets
Custodial wallets are provided and managed by a crypto exchange or other third party. These wallets do not give you full control over your assets and you rely on the services of the provider during withdrawals or payments.
The main advantage is that you don't have to worry about managing your keys and you can reset your password if necessary.
How to set up a custodial crypto wallet
1. Choose a platform: Choose a reliable crypto exchange and make sure it complies with local regulations.
2. Create an account: Sign up using your email address and a strong password.
3. Verify identity: Most platforms require identity verification (KYC) to comply with regulations.
4. Add funds: After verification, you can link a payment method to deposit fiat currency or cryptocurrency into your wallet.
5. Start Trading: You are ready to trade or invest. To learn more about how to get started with Binance, check out the Binance Beginner's Guide.
Non-custodial wallets
Non-custodial wallets give you complete control over your keys and funds. While these wallets provide more freedom and control, you are solely responsible for remembering the passwords and seed-phrases that keep your cryptocurrency safe.
In most cases, if you're hacked or lose access, you won't be able to reset your password or get a refund. MetaMask and Trust Wallet are popular examples of non-custodial cryptowallets.
How to set up a non-custodial crypto wallet
1. Download the wallet app: If you are using a mobile device, be sure to install the wallet from official sources (App Store or Google Play). If you are using a computer, download browser extensions from official websites. For example, let's use MetaMask.
2. Create a new wallet: Open the app and select the option to create a new wallet.
3. Set a strong password: it will protect the application from unauthorized access.
4. Back up your seed phrase: Write down the 12 or 24 word seed phrase provided by the app. Keep it private and safe. The seed phrase is critical to recovering your wallet if you lose access.
5. Add Funds: The traditional way to add funds to your non-custodial wallet is to transfer cryptocurrency from a cryptocurrency exchange such as Binance. But some wallets also offer services for buying cryptocurrencies with credit cards and bank payments.
Your non-custodial wallet is ready to use. Now you can connect to DeFi platforms like Uniswap, PancakeSwap, etc. But be careful. Connecting to malicious dApp or phishing websites may result in loss of funds.
Before connecting your wallet to Web3 platforms, make sure you are using reliable and genuine services. You can also split your funds and use disposable wallets to reduce your risks.
Binance web3 wallet
Binance Web3 Wallet is a unique crypto wallet that combines the best of both worlds. It is a non-custodial wallet that eliminates the need to store your private keys in one place. Binance Web3 wallet users don't need to worry about seed phrases and can count on 24/7 customer support.
How to set up a Binance Web3 wallet
1. Log in to your Binance account in the Binance app and go to [Wallet].
2. Create a wallet. Tap [Create Wallet] and follow the instructions. Binance web3 wallet uses multiparty computing (MPC) technology, so you don't need to worry about the seed phrase. Instead, it creates three parts of the key that are stored in three different locations.
3. Back up your wallet and set a recovery password. The keys will be protected by your recovery password. Keep it private and safe.
4. Activate the wallet: As soon as you activate the Web3 wallet, it is ready to be used for trading, staking or interacting with dApps.
Binance Web3 Wallet provides 24/7 customer support, making it an excellent choice for users who need help.
Hardware wallets
A Hardware wallet is a physical device that stores your private keys offline. Popular brands like Ledger and Trezor can offer solid protection against malware and hackers. However, hardware wallets can be relatively expensive and not very user-friendly for beginners. They are more suitable for advanced crypto users who plan to HODL large sums as long-term investments.
How to set up a hardware wallet
1. Buy a hardware wallet: Buy a Ledger Nano or Trezor from the official website or from a verified seller.
2. Install the wallet software: Download the accompanying wallet software (such as Ledger Live or Trezor Suite) to your computer or smartphone.
3. Connect the device: Connect the hardware wallet to the computer using a USB cable.
4. Set a PIN: Choose a secure PIN to protect your device.
5. Backup restore phrase: The device will generate a restore seed-phrase. Write it down and keep it in a safe place.
6. Send and receive cryptocurrency: Once set up, you can transfer cryptocurrency to and from your hardware wallet.
Results
In just a few simple steps, you'll be ready to securely store, send, and receive cryptocurrency. Remember, the key to staying safe in the crypto world is protecting your private keys and being aware of potential security threats.
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