* Trading is risky. Your capital is at risk.
It’s no secret that cryptocurrencies have become more popular in recent years. Unlike government-issued currency, digital currencies aren't tied to any specific country. Cryptos operate without a central authority and don’t need an intermediary like a bank to process payments. In our more connected world, this makes them a quicker, easier, and cheaper payment method than traditional money. In this article, we'll explore the basics of crypto wallets and payments and offer step-by-step tutorials on how to deposit and withdraw cryptocurrency on FXTM.
What is a cryptocurrency wallet?
A cryptocurrency wallet is a tool or application designed to store and manage cryptocurrencies like Bitcoin (BTC). Wallets that support the storage of stablecoins like Tether (USDT) are also available. You can think of a wallet as your personal digital ‘bank account’ for cryptos!
A cryptocurrency wallet is made up of a public key and a private key:
- The public key is also called the wallet address, which acts much like your traditional bank account number. You can safely share this address with people so they can pay crypto into the wallet. It offers no access to the wallet.
- The private key, on the other hand, can be thought of as your online banking password, confirmation code, or secret PIN. The private key is used to sign (confirm) transactions, so it should never be shared. Without a private key, the coins in a wallet become useless, so it’s critical to take extreme care with it.
Several types of cryptocurrency wallets are available. The best one for you will depend on your personal preferences, crypto usage, and technical ability.
Types of cryptocurrency wallets
Here, we break down the various types of cryptocurrency wallets, with the characteristics, advantages, and risks for each.
Custodial and non-custodial wallets
The first category is whether the wallet is custodial or non-custodial when it comes to the control of the private keys
Custodial Wallet
- Definition: Third party holds and manages your private keys.
- Advantages: Easy to use and recover if you lose access.
- Risks: You’re relying on the provider’s security.
Non-Custodial Wallet
- Definition: You control your own private keys fully.
- Advantages: More control and stronger security.
- Risks: You’re responsible for keeping everything safe; recovery can be technical.
Step 1: Choose a Platform
The first crucial step in creating your crypto account is selecting a reputable cryptocurrency exchange or wallet provider. Ensure that the platform aligns with your trading goals, offers a user-friendly interface, and prioritises security.
Prioritise wallets with strong security features, such as two-factor authentication (2FA) and encryption. Choose wallets from reputable providers with a history of security and positive user reviews. Before selecting a wallet, research and compare options based on your specific needs, including security features, ease of use, and supported cryptocurrencies.
Step 2: Registration
Once you've chosen your preferred platform, sign up by providing the necessary information. This typically includes your email, password, and personal details.
Step 3: Verification
Most reputable providers will require you to run through identity verification. This is for your safety as well as the security of the platform. You'll more than likely need to submit your ID/Passport as well as a document as proof of residence. In some cases, you may be asked to take a selfie.
Step 4: Deposit Funds
Deposit funds into your crypto wallet using a bank transfer, credit card, or other supported payment method. Choose the option that suits you best.
That completes your Crypto wallet account. Once your crypto wallet is active, you will be able to use it to transfer funds to and from FXTM.
