There are many digital wallets out there with various levels of security. Just like the liquidity of fiat money, certain digital wallets make your digital coins less accessible and potentially safer than others. The more exposed and accessible online, the more there is a potential for theft.
You might hear talk of hot and cold wallets. A cold wallet is NOT connected to the internet, whereas a hot wallet is connected and therefore able to make purchases at anytime. Having it connected to the internet also makes it potentially vulnerable to hackers.
One of the simplest safeguards is to have a very strong password. Ideally, keep a copy of the password offline and in a safe location. Lose your password and you potentially lose access to the contents of your wallet. Protect your private key with EXTREME care. Anyone with access to your private key(s) has access to all of your cryptocurrencies in that wallet.
Personally, I use several wallets. The cold wallet holds the majority of the coins and my hot wallet has enough so I can make the purchases I want to make on a weekly of daily basis. If I need more coins, I can either make a transfer from my cold wallet, or convert my fiat currency into bitcoin using a bank transfer, bank wire, bitcoin ATM, an exchange or a service like BitQuick. If I’m looking to buy bitcoin, my favorite way to buy bitcoin is through the Cash App. It’s simple and quick. I’ll talk more about the Cash App at this link. Personally, the Cash App is my favorite way to buy bitcoin & stocks.
Based on advice from friends, I started out with a company headquartered in San Francisco called CoinBase. You can connect Coinbase to your bank account for simple and easy transfers. The tricky part is that it takes about 7 business days for your initial transfer to show up in your Coinbase account. The KYC (Know Your Customer) protocols have been streamlined, but it will still take some time to be approved. Patience is the key. You can also add a debit or credit card, but your initial transfers are limited to $100 per week.
If you want to give Coinbase a try, you can use this Coinbase link to get an extra $10 after transfering $100 to your new account. Please note, although Coinbase can be used as a hot wallet, I feel it should mainly be used as an exchange to convert fiat money to cryptocurrency and visa-versa. I feel a majority of your balance should be transferred to a cold wallet.
If you want to get bitcoin into your digital wallet a lot faster, you are going to pay extra for the speed. You can use a Bitcoin ATM to turn cash into bitcoin almost instantly. I did a search for a Bitcoin ATM in my neighborhood and found one relatively close to my home. The BIG drawback are the high fees you will pay when using these ATMs. Some of these ATMs, sometimes called BTMs, tack on an extra 8% to 30% to the price of your bitcoin. I found one which charged about 16%. I was in a hurry to make a bitcoin purchase, so it was worth the fee at the time.
Several years ago, I was planning on doing some cryptocurrency mining so I needed to convert a larger amount of cash into bitcoin. I was looking for a more cost effective way to convert cash into bitcoin (than the bitcoin ATM) when through some online research, I stumbled across a service called: https://www.bitquick.co/ If you would like to try out this service, please use my affiliate link and through no extra cost to you, you can help support this website.
So here’s how BitQuick works. It’s very scary!!! Well, it was for me the first time I used it. I tried it out despite my fear because the fees were only an additional 2% service fee and a 0.001 BTC mining fee. If you plan to convert more than $400 then you’ll need to confirm your identity using a passport or drivers licence. You can use the “Launch Quick Buy” button to make it simple, or you can buy from a specific person in their Order Book.
Once you have decided how much cash you want to trade for bitcoin, then you take CASH to their bank and within 3 hours of submitting a copy of your deposit slip, the bitcoin will be added to your digital wallet. It sounds scary and a high element of trust is needed, but it actually works.
My first transaction was on a Saturday morning and took exactly 2 hours and 52 minutes to be credited to my wallet. I was sweating bullets the whole time, but I now have full confidence in BitQuick and this was the main way I converted cash to bitcoin and added it to my wallet before the Cash App came along.
Here’s a video on how this works.
So, once again, a bank transfer will take up to 7 business days and a bitcoin ATM will take minutes. You need to decide how much you are willing to pay for the speed of converting your cash to cryptocurrency.
The Cash App, which I use for receiving and sending payments added an option to buy BTC aka bitcoin during the 3rd quarter of 2018. I have used this extra service and it is by far my FAVORITE way to purchase bitcoin. It’s not as “scary” as “Bitquick” which I mention above and it takes only minutes to receive your bitcoin. The cash app says they charge no fees, but I notice about a 1-2% difference in price when I make my purchase. I’m happy to pay the small fee because of the convenience. I’ll be adding a seperate page dedicated to the Cash app because I like it so much.
I mentioned that I use several digital wallets. Here is the other wallet I use. This one I would consider a cooler wallet. As of now, it can ONLY be used from a desktop computer but if you pair it with the wallet from Blockchain.com you can access the exodus wallet with the blockchain app on your mobile device.
Keeping the wallet ONLY accessible from your desktop helps to keep your wallet relatively safer than when it’s accessible from your mobile phone. Exodus is a beautifully designed wallet which can hold most all the popular cryptocurrencies. This wallet can be downloaded from: https://www.exodus.io/ This is the wallet I use for bitcoin, dash and ethereum as well as a few other different alt coins.
If you plan on mining cryptocurrencies, the mined coins can be transferred to your wallet of choice. I will keep exploring digital wallets and add additional options as I test them out.
If you’re interested in trading cryptocurrencies, I will talk more about that here.
I hope you found this information helpful.