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Making a crypto wallet is often the first thing one does at the start of their crypto journey. This is obvious: you cannot do a thing in crypto without a wallet! But don’t worry: even if you are just crypto-curious, setting up a wallet can be easy as a piece of cake. Read our explanation to see for yourself!
Key Takeaways
- To open a crypto wallet, you will need a cryptocurrency wallet app or a website that can create a crypto address. It is vital to choose a reliable provider, regardless of if you use a mobile crypto wallet or other methods.
- Some crypto wallets will take care of the backup themselves but others will require you to take care of a recovery or seed phrase. The first type is easier to spin up but less reliable; the second type is common and is believed to be more secure.
- There are also wallets that are always online or ones that are mostly offline. Making a decentralized Bitcoin or crypto wallet of the second type (cold) is more complicated and usual for someone who already has large crypto holdings. The first type (hot) is typically the choice for one’s first crypto wallet because a cryptocurrency mobile wallet is more accessible and free.
Common Questions before You Start
Check this list to see if there is anything you might not know before diving further into this guide.
How to open a cryptocurrency account?
Newcomers to crypto often think that these digital currencies work like electronic money which require a user account. However, there is no such thing as a crypto currency account, so technically you can’t open a crypto account. What you might mean when you want to create a crypto account is either how to set up a cryptocurrency exchange account or make a wallet.
How is bitcoin stored?
To better understand what we were talking about in the previous paragraph, you need to know how bitcoins are stored. Since there is no physical representation of BTC or any other cryptocurrency, instead of storing units, user addresses or wallets keep track of balances instead. Learn more about how crypto wallets work in our explainer guide!
What is a wallet in crypto?
When you think about what’s a crypto wallet, what is it that you imagine? The crypto wallet definition needs to be explained, since it is not what you might be expecting based on common knowledge. It actually might refer to a blockchain address or an app to access and manage crypto assets.
What is a wallet in cryptocurrency, or a blockchain wallet? If it is a blockchain address, it is a unique string of characters and numbers that denotes a destination for coins on that specific network. If it is an app, crypto wallets can be explained as software to navigate the blockchain data and perform actions.
You might also wonder, what does a crypto or Bitcoin wallet look like? This is not applicable to addresses or apps either but physical devices to generate and store crypto keys offline called hardware crypto wallets. These devices come in many forms, reminiscent of USB sticks or even plastic cards. Learn what a hardware crypto wallet is, how does it work and how it can look like from our guide.
More about what crypto wallets are, how to use a blockchain wallet and how do digital wallets work is explained in our guide to cryptocurrency wallets.
What does wallet address mean?
If there is some ambiguity about the word “wallet” in crypto, a cryptocurrency or blockchain wallet address means one thing. What is a blockchain wallet address in crypto? It is a unique identifier for a user which is also their public cryptographic key. Because it is public, it is safe to share it.
What’s a Bitcoin wallet address, for example? It can look like this: bc1q8yj0herd4r4yxszw3nkfvt53433thk0f5qst4g. You can only view information about it or send BTC to it (unless you’re the owner). What is a wallet address for you in the Bitcoin network? This information is viewable in the software you used to make a Bitcoin wallet.
What’s a crypto address that isn’t a wallet? These exist in Ethereum and similar networks for smart contracts. You can send funds to a contract address, accidentally or on purpose, but keep in mind that not every recipient will be able to receive such transfer.
What is a Bitcoin wallet?
What’s a Bitcoin (BTC) wallet, is it some kind of account? As we have explained above, no, it is your public cryptographic key in the Bitcoin network. Alternatively, it is a digital wallet that supports BTC, they can have other assets or work with Bitcoin alone.
How does a Bitcoin wallet work? If we are talking about the application, they are interfaces for you to view the information from the BTC blockchain and authorize transactions with your unique private key. If by wallets you mean the BTC blockchain address, it is a public key derived from a user’s private key generated by the Bitcoin client. Don’t worry: the reverse, getting a private key from the public one, is impossible.
What is an Ethereum wallet?
What is meant by ethereum (ETH) wallets? Likewise, it is either a blockchain address in the Ethereum network, of a certain type. Or, it is a software application that lets you manage ETH holdings, sometimes with other cryptocurrencies supported as well.
What is a format for an Ethereum wallet? They all start with “0x”, like this ETH address used by Robinhood: 0x40b38765696e3d5d8d9d834d8aad4bb6e418e489.
Do I need a crypto wallet?
Why do I need a crypto wallet? Well, how about not being able to use crypto at all if you have none? In other words, a wallet is the first or at the very least second thing you should take care of when you start using crypto.
How to use a crypto wallet depends on the application because they come with features of their own. However, the most basic and advanced ones alike allow you to view balances and send and receive coins or tokens.
Should I get a private wallet?
A private, external, decentralized, self- or non-custodial wallet refers to the same type of software for Bitcoin and other crypto assets. It means a wallet app that lets you manage private keys of the stored cryptocurrency. The choice of the best external crypto digital asset wallet depends on many factors, such as format, asset support and features.
Can you have multiple crypto wallets?
How many crypto wallets should I have, you may wonder. It is possible and even recommended to have not just a cryptocurrency wallet and a crypto exchange account. Using as many crypto addresses as you can manage is considered more secure and privacy-preserving.
Step 0. How to choose a crypto wallet?
In crypto, you simply cannot do without a wallet address. This is the address in the blockchain where cryptocurrencies are sent and received. From the Bitcoin code’s point of view, it can’t tell who has any given BTC coin but it knows who has which address. In other words, you can’t have crypto coins or tokens if you don’t have an address.
An application or interface that helps you access and manage your crypto address and tokens on balance is called a crypto wallet. Today, they come in many forms and have lots of functions. You can manage a crypto address on the desktop, smartphone, or even in a web browser. But this is not the only reason why different crypto wallets exist.
Sometimes, your first crypto wallet is not the best place to hold crypto. You will need to choose something secure and legitimate still, since generating keys and seed phrases is also important. However, you can often import these credentials to a better app later down the road.
Custodial vs. Self-custody Wallets
It is obvious from the name that cryptocurrencies use cryptography, a science about turning information into code and back. In cryptography, hints called keys are used to decode a message or turn it into a cipher. We have already written that the Bitcoin protocol has the information on who has each address. Other people who use Bitcoin know that you own your address because you have the public key and private key to it.
Some wallets give you full control over your private keys and other wallets take care of it for you. The first type is called self-custodial (because you keep your keys yourself) or non-custodial. What is the meaning of a “decentralized wallet” in crypto? It is just another name for a non-custodial wallet.
The second type of a wallet is called custodial or centralized because the person or team who made the wallet app is taking care of security. “Custody” here means the keys and not the cryptocurrencies, since, as you remember, wallets do not store cryptocurrency itself.
| Non-custodial | Custodial | |
| Format | Software, desktop and mobile apps, hardware, and cold wallets | Exchanges, mobile wallets |
| Security | You handle it yourself | A third party |
| Other benefits | Direct control over funds | User-friendly, can have insurance |
| Popular examples | Trust Wallet, CakeWallet, Exodus | Binance, PayPal, Uphold |
How is a cryptocurrency exchange different from a cryptocurrency wallet? The difference between a crypto wallet and exchange is the same as here. Keeping your assets in a cryptocurrency wallet vs on an exchange gives you the same benefits as storing them in self-custody. What is the benefit of having funds on a crypto exchange vs wallet then? Although an exchange can be hacked or lock you out of an account any time, you can keep some crypto there to trade it anytime.
Software wallet apps vs. Hardware wallets
Another difference that is easy to notice is between software and hardware wallets. Software means computer programs and applications, and hardware means special devices.
For example, if you are looking for a first crypto wallet that would suit beginners, it is very likely going to be a software (or “soft”) wallet. You can install a program or an application on your computer or smartphone. Web wallets that keep your keys in the browser’s files will not ask you to install anything at all. The best thing about this type is that most software cryptocurrency wallets are free. An example of this type of a cryptocurrency wallet is Metamask.
On the other hand, hardware cryptocurrency wallets come as small devices that you can plug into a computer or a smartphone. They keep your private keys offline, stopping anyone from finding your private keys and using them. Hardware wallets are special devices and they cost several dozen dollars. Examples of this type of crypto wallets are USB-like sticks by Ledger or cards by Tangem. Despite this, the extra security they provide is believed to be worth the cost of keeping a lot of money safe.
Hot wallets vs. Cold wallets
Finally, to view, send, and receive cryptocurrencies, you need an Internet connection. Your wallet can be the type to do everything while being always online: this is a hot wallet. Or your wallet can connect to the Internet only when needed to send coins: it is a cold wallet.
Most software wallets are hot wallets. However, not always: there are tips and tricks to help you protect a crypto wallet from attacks. For example, you can use an old smartphone with no Internet connection or other devices kept offline. If you create a crypto wallet there, you can use this address for cold storage.
Cold storage means keeping crypto assets in an offline wallet. How to create a cold wallet for cryptocurrency? Most cold wallets are hardware wallets. However, there are also paper wallets, which usually are printouts with the public and private key pair. Paper wallets can be used to back up a hot wallet or to keep an address for long-term holding extra safe.
How to transfer crypto to a cold wallet? If you are using a hardware wallet, you can do it with the companion software app. If you opted for a paper wallet, it should have a scannable QR code or the public key — use it as a destination address.
Step 1. Get the wallet of your choice
When you know what kind of blockchain crypto wallet you want to create, it will be easy to find. However, there are a few more things to think over before you install or buy the block chain wallet.
First of all, make sure you are on the real website of the wallet before downloading or using a web version. There are copycats in the app stores, too: the number of downloads and ratings with reviews can help you understand if you can trust the app.
The same steps to ensure safety would apply to getting a hardware wallet, plus some more. In addition to buying only from an official store, you should never get it second-hand. When you get the package, make sure that it hasn’t been opened or used: a fake blockchainwallet can harm your computer or get your private data.
Step 2. Take Care of the Private keys
This step is more important if you go for a self-custody wallet. A lot of crypto wallets these days do not require you to save a private key for each address because you can have a lot. What they will absolutely need you to keep safe is a seed also known as a mnemonic phrase or a recovery phrase.
This is a cryptographic key to all the addresses this wallet can create for you, so if you lose this phrase, you will lose all kinds of assets. It usually looks like a 12- or 24-word phrase. Write these words down, hide the note in a safe place, and never share them with anyone.
Private keys and recovery phrases are not the only things you should care about. If your wallet offers you to use a password or two-factor authentication (2FA), do not pass on this opportunity. But even if you become unable to use that wallet app, if you know your recovery phrase, you can import a wallet and restore it from a backup.
Even if you are using a custodial wallet, you should do your best to keep it safe. While the custodian takes care of the private key, the crypto wallet account safety is still on you. How to make a proper setup for a custodial crypto wallet? Don’t forget about keeping your password secure, backed up, and secret. If you can, use two-factor authentication (2FA).
Step 3. Ready to Make the Crypto Wallet!
If you follow these steps, you will not just have a crypto address to receive a transaction. You will also be all set to safely use cryptocurrencies. These days, crypto is not only about coins and tokens: read our beginner-friendly guide to other vital terms, exciting trends, and more things you can do with it.
Even though a crypto wallet is called like that, it does not actually store your money. Choosing the right one can seem daunting but it is also the easiest step to start your crypto journey even if you are just curious. Since you can make my crypto wallet for free, you can make multiple tries before you spend even a penny on crypto. Feel free to start with an easy-to-use crypto wallet and later on, move to a more sophisticated blockchain wallet app.
How to open a crypto wallet once you’re done with the setup? It is as easy as opening the app or the website again and logging in. How to get a crypto wallet address to add money or make a withdrawal? Choose the right cryptocurrency from the list and click “Receive” to see your public blockchain address.
How do I set up a crypto wallet to watch-only mode?
How to track crypto wallets without exposing private keys online? How to create a cryptocurrency wallet address that can’t spend coins? This can be useful to view your or someone else’s holding without risking unauthorized access. Some wallets support this function, for example, Trust Wallet.
How to make a crypto wallet address without accidentally setting off this option? Because you need to go out of your way to make a wallet watch-only, don’t worry. Just make sure to not lose the recovery phrase or private keys, and you will always be able to regain access to your funds.
Be careful because watch-only addresses can be used in scams. If someone claims your watch-only address needs unlocking, this is a tactic to get you to divulge actual wallet details.
How to create a digital wallet for cryptocurrency?
It is a whole different story if you want to build a crypto wallet app. How do I make a crypto wallet from scratch? The easiest way how to create a blockchain wallet is to fork an open-source one and make the adjustments in code you need. It goes without saying that this will require you to have the necessary technical knowledge.
How to make a cryptocurrency wallet without technical skills? It is possible to have a white-label solution tailor-made for you and your needs but of course, this is not for free.
How to Set up a Bitcoin wallet Step-by-Step
How to open, create, start and set up a Bitcoin account, do you ask? Once again, BTC does not use accounts but tracks cryptographic keys, address being one of the pair. So how can I get a Bitcoin wallet if you do not have one to use crypto at all?
- If you do not want to hassle with setting up a Bitcoin wallet just yet and plan to buy it from an exchange, just make a cryptocurrency exchange account first. However, keep in mind that an exchange can close down, lose funds to a hack or lock you out any time.
- How do I create a wallet address for Bitcoin to avoid losing BTC like this, you wonder? You will need a Bitcoin wallet app for this. Choose between mobile and desktop apps, BTC-only and multi-cryptocurrency wallets.
- Next, how do I set up a Bitcoin wallet to start using this cryptocurrency? When you open the app for the first time, it creates a seed for you. Typically, all crypto keys in this wallet will be derived from this seed. Just choose Bitcoin in the main menu to see where you can view your BTC address.
- How to open a Bitcoin wallet after the setup? Choose “Bitcoin (BTC)” from the main menu and proceed to the wallet address you need. Some wallets will let you label your addresses, BTC included, but what you name it has no bearing on the blockchain.
- How do you make a new Bitcoin wallet to keep your digital footprint less transparent? Wallets will usually have an option to create a new address and track its balance along with other addresses that belong to you.
- How to put Bitcoin in a wallet or move it there? You will need to transfer it from an exchange or other source. After creating a Bitcoin wallet, share its public address and initiate a transaction from elsewhere with this address as a destination. How to add Bitcoin to your wallet without using an exchange? Buy it on a platform that will transfer BTC directly to your wallet.
Conclusion
As the first thing you do when getting into crypto, setting up a wallet is quite important. We hope our guide will help you to do it right.
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Frequently Asked Questions
Is creating a crypto wallet free?
Yes, creating a crypto wallet is usually free. Many wallet providers offer their services at no cost. However, keep in mind that there might be transaction fees associated with sending or receiving cryptocurrencies.
How do I create a crypto wallet address?
How to make a wallet address to receive crypto? To create a crypto wallet address, you typically need to download a wallet app or sign up on a wallet provider’s website. Once you have a wallet, you can generate a new address within the app or website. This address is a unique string of letters and numbers that you can share with others to receive cryptocurrencies.
Can you fake a crypto wallet?
It is not possible to fake a crypto address but a wallet app can be copied. Is any crypto wallet safe to use? Reputable crypto wallets are generally safe because they use encryption and private keys to secure your funds, and each wallet address is unique. How to choose a secure crypto wallet then? It is important to use proven wallet providers and be cautious of phishing attempts to protect your cryptocurrency.
Do you need an ID to make a crypto wallet?
No, you generally do not need to give an ID to create a crypto wallet. Most wallets for cryptocurrency storage are decentralized and do not ask for personal information. However, some regulated platforms may ask for identification during the account verification process.
How to buy a crypto wallet without disclosing your personal info? You can use a dedicated email and credentials to make a purchase of a hardware wallet. Resellers who promise anonymous transactions can sell you compromised devices or scam you otherwise.
How much does it cost to create a crypto wallet?
Creating a crypto wallet is typically free of charge. You can download and set up a wallet app or use an online wallet service without any cost. However, please note that some wallet providers may charge fees for specific transactions or services within the wallet.
If you are more interested in how to start a crypto wallet app, you will need to cover expenses for development, design, and implementation at the very least. Many wallet apps are passion projects done virtually for free by enthusiasts but there are also feature-laden professional products made by large teams.
Do crypto wallets make money and how?
Crypto wallets themselves do not make money. They are tools used to store and manage cryptocurrencies. However, some wallet providers may offer additional services, such as cryptocurrency exchanges or staking, which can make them money.
Does your crypto grow in a wallet? Not by itself, you will need to stake it — learn more about staking in our guide!
How do I get a Bitcoin account?
Bitcoin is not a centralized digital currency or electronic money, so it does not have accounts. How to store bitcoin, then? You will need to get a Bitcoin wallet to manage your funds. There is no need to create a Bitcoin wallet, you can choose any application from a variety of software. How to access a Bitcoin wallet once you set it up? You can set up a password to protect your wallet but in any case, it is as easy as logging in and opening the app.
How to open a crypto account?
Newcomers to crypto often wonder how to open a cryptocurrency account but because it is decentralized, there are no user accounts per se. What you need is a blockchain address, which is easily made with a crypto wallet app. How to set up a crypto exchange account is a whole thing entirely, although it is usually very similar to account creation in other services.
How to put crypto in a wallet after you set it up? Get the public or recipient address in your wallet, double-check if it is the right network, and transfer crypto from elsewhere or have someone else do it.
How to secure your cryptocurrency?
How to protect your cryptocurrency against hacks and social engineering attacks targeting crypto? Best practices include unique passwords, 2FA where available, and most importantly, keeping private keys and recovery phrases secret and safely stored.
What is a crypto ledger?
You may often hear that blockchain is a decentralized ledger for cryptocurrency, but how is it explained? A ledger is a place where financial transactions are recorded and can be kept track of. Where is cryptocurrency stored? No cryptocurrency has a physical, moveable representation and is instead a collection of records in this decentralized ledger.
Alternatively, what Ledger is in relation to cryptocurrency can refer to a hardware wallet brand.
Where do you store cryptocurrency?
How to store cryptocurrency and what is the best way? Depending on your needs, there is no single best way to store crypto. Large holdings are best kept safe in a cold wallet or in qualified custodian’s care. Smaller funds for frequent use would be more conveniently available in a hot mobile wallet or even on an exchange to be readily available for trading.
