What Is a Crypto Wallet?

To buy, sell or trade Bitcoin and other cryptocurrencies, you need a crypto wallet to store your digital cash. Your choices include “cold” wallets on devices that are not connected to the internet and “hot” wallets kept on your computer or phone.

Crypto wallets safeguard the information you need to show proof of your funds. They store your public and private keys, the crypto world’s version of a username and password that can authorize transactions.

Do you need your own crypto wallet?

Not necessarily. Though some investors prefer to manage their own wallets, many crypto platforms offer “custodial wallets,” in which they’ll store your digital assets in wallets they maintain. Some of these crypto storage options pay crypto interest or rewards on assets kept on their platforms.

Custodial wallets can be helpful for beginners because they provide recovery methods in case you lose your login credentials. With non-custodial wallets, you’re in control, but you can lose your…

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This article was written by Dalia Ramirez and originally published on www.nerdwallet.com