The Best Bitcoin Wallet: Offline or Online
Whether it’s Bitcoin, Ethereum, or Solana: If you own or trade cryptocurrencies, it’s important to know how to store them securely. You do this by using a crypto wallet. We will show you the available options so you can decide which one is best suited for your situation.
Did you know that without a wallet, it’s impossible to own or trade Bitcoin or other cryptocurrencies yourself? That’s why it’s important to understand the different types of wallets and how they differ.
A crypto wallet is essentially nothing more than a digital wallet for cryptocurrencies. It allows you to securely store and send digital money, such as Bitcoin, Ethereum, or Solana. A wallet contains both the "Public Address" and the "Private Key." You can think of the Public Address as your account number, which you use to receive cryptocurrencies. If your Public Address is like your account number, then the "Private Key" is the corresponding password. This allows you to access your cryptocurrency and send it.
Custodial or Non-Custodial?
For maximum security, we always recommend storing your assets on an offline wallet, also known as a cold wallet or cold storage. However, depending on the situation, an online wallet can be more convenient. Let’s take a closer look at the differences:
| Third-party custody | Self-custody | |
|---|---|---|
| Responsibility | The crypto exchange (Binance, Coinbase, Kraken) manages your cryptocurrency. | You have full control over your cryptocurrency. |
| Advantages | - Your cryptocurrencies are available faster. - You don’t have to worry about crypto custody. | - Your cryptocurrency is stored more securely. - You are the real owner: If the provider goes bankrupt, you still retain your crypto. |
| Disadvantages | - Your cryptos can become victims of theft more quickly. - You are not the real owner: If the provider goes bankrupt, your cryptos may also become part of the bankruptcy estate, depending on the legal situation. | -You have full control over your cryptocurrency: If you lose your access credentials, your cryptocurrencies will also be lost. |
| Wallets | Online: Crypto exchanges or brokers | - Online: Desktop Wallets, App Wallets - Offline: Hardware Wallets or Paper Wallets |
| Example | Cryptonow Invest | Cryptnow App (online) Cryptonow Wallet Giftcard (offline) |
The public address and private key are managed by the crypto exchange or broker. After purchasing cryptocurrency, it is credited to your account online. The major advantage is that it is very easy and convenient to resell it. However, if you want to hold a larger amount of cryptocurrency long-term, we recommend transferring it to a self-custody wallet. An example of a self-custody wallet is the Cryptonow Wallet®.
The public address and private key are protected with an encrypted seed phrase. This type of wallet is better protected against theft because, in the event of your smartphone being stolen, the wallet can be restored on another phone or computer. With the app, you have full control over your cryptocurrency. This means that if you lose your access credentials (seed phrase), you also lose access to your cryptocurrency. For the highest level of security, we recommend offline wallets.
Unlike online wallets, the private keys are stored offline and thus protected from online threats. The Cryptonow Wallet® is an example of such an offline wallet. The wallet contains both the public key and the private key. This gives you full control over your cryptocurrencies. However, it is important to store the Cryptonow Wallet® in a secure location and keep your private key safe, as losing it can result in losing access to your cryptocurrencies.
Depending on the situation, a different type of wallet may be recommended. If you frequently trade cryptocurrencies and use your wallet regularly, an online wallet might be the better choice. However, if you hold a large amount of cryptocurrencies and wish to store them long-term, we recommend the safest option with the offline Cryptonow Wallet®.
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