How To Get a Crypto Wallet

As crypto has evolved, so too has the offering of crypto wallets. Most cryptocurrency wallets will store private keys and allowing you to access the blockchain, but not all are the same.

For one thing, there’s the distinction between non-custodial wallets, which enable you to practice full self-custody, and custodial wallets which do not. While custodial wallets, offered by centralized exchange platforms, don’t give you control over your private keys— a real deal breaker. After all, if not self-custody, then why crypto?

Then there’s the major difference between hot wallets and hardware wallets, and the level of security that they offer. So before diving into the steps of acquiring a cryptocurrency wallet, you should familiarize yourself with these differences, as it will inform your decision on which crypto wallet to get.

Step 1: Choose the Right Type of Crypto Wallet

The first step in getting a cryptocurrency wallet is choosing the type of crypto wallet you want. There are two important distinctions of cryptocurrency wallets to know about custodial vs. non-custodial wallets, and hot vs. cold wallets. All these crypto wallets help you to secure private keys, but they do so in different ways. This has important implications for your security. 

Custodial vs. Non-Custodial Wallets

Custodial wallets are managed by a third party that retains control over the private keys of the account containing your funds. Much like a bank, the service provider, such as a centralized exchange, owns your account. This provider thus reserves the right to deny you access to your funds; you don’t have true ownership of your assets. Remember: “Not your keys, not your crypto”.

In contrast, non-custodial wallets give you complete control over your private keys and, by extension, your assets. This model ensures you maintain full autonomy over your funds. Non-custodial wallets have no intermediary with the authority to freeze, access, or manage the assets without your consent. This more decentralized approach to asset management aligns with the foundational principles of blockchain technology.

Ledger crypto wallets exemplify the non-custodial model, providing a hardware-based solution for secure asset storage. They store private keys offline, isolated from online vulnerabilities using a secure element chip, and also provide a decentralized and secure method of asset management, ensuring true ownership of their digital assets. 

Types of Hot Wallets

A hot wallet is a piece of software you install on your smartphone or laptop. These crypto wallets are known as “hot” because they generate your seed phrase (also called secret recovery phrase) online, and subsequently store your private keys online as well.

Unfortunately, since they are connected to the internet, hot wallets are vulnerable to malware and spyware. Plus, since your laptop or smartphone’s screen is not secure, hot wallets are also vulnerable to spoofing attacks, wherein an attacker will change the details on your screen and convince you to sign a malicious transaction. As such, hot wallets should only be used to hold minimal value, or they should be used alongside a hardware wallet. Hot wallets come in three main types: desktop wallets, web wallets, and mobile wallets.

Desktop Wallets

A desktop wallet is a software application that you install and operate on your personal computer. As a software wallet, they store private keys on the host computer, making them susceptible to malware like all types of hot wallets.

Web Wallets

These crypto wallets are accessible via a browser extension. However, like all software wallets, they are susceptible to hacking risks. Since they use your web browser, they are always connected to the internet, leaving your keys accessible to attackers.

Mobile Wallets

A mobile wallet is a software application that is installed on a smartphone or tablet. Like all hot wallets, it stores your private keys on the host device, in this case, your smartphone, though this makes it susceptible to online threats.

Types of Cold Wallets

A cold wallet is commonly misunderstood to be simply the opposite of a hot wallet – but this is inaccurate. While a cold wallet does generate and store your private keys in an offline environment, it also has another essential trait: it never interacts with smart contracts.

This defining feature means a true cold wallet goes beyond simply keeping your keys offline, it also air gaps you from potentially malicious smart contracts as well.

Paper Wallets

A paper wallet is one of the oldest and simplest forms of cold storage wallet: it’s simply a piece of paper with private and public keys printed on it, usually in the form of a QR code. Since it is completely offline, a paper wallet is immune to online hacking threats. 

However, paper wallets aren’t user-friendly at all. They don’t use the handy HD structure that most hardware and software wallets do. Besides that, paper wallets limit your ability to explore: you can’t connect to a DeFi app with a paper wallet, and sending and receiving cryptocurrencies is a labor-intensive bore.

Their final damning vulnerability: physical damage or loss. Unfortunately, paper just isn’t that robust, and without a seed phrase, it can be impractical to protect and manage multiple paper wallets.

Hardware Wallets

A hardware wallet is a physical crypto wallet that stores private keys in a computer chip isolated from your internet-connected device. Like a paper wallet, crypto hardware wallets offer cold storage. And while hardware wallets are often called cold wallets, this isn’t accurate. A hardware wallet is simply a type of cold wallet.

They use an HD structure, much like a software wallet, so you can manage multiple accounts with a single device, and restore every account using a single seed phrase. Hardware wallets also offer an interface, usually in the form of a crypto wallet companion app, that allows you to interact with the blockchain, send and receive digital assets, and in some cases, even access blockchain apps.

When you sign a transaction with a hardware wallet, the signing process occurs offline, protecting your private keys from potential attackers and eliminating the risk of a tampered transaction. Once the transaction is signed, it’s safe to transfer to an internet-connected device, which your hardware wallet will usually do via a USB cable.

Since they are secure and practical, hardware wallets offer the most practical solution for securing assets long-term and accessing the widest range of networks, platforms, and services.

Step 2: Get Your Crypto Wallet

Getting a crypto wallet is easy, though the specific steps will depend on the kind of cryptocurrency wallet you’ve opted for.

Getting a Web Wallet

Web wallets generally come as a web browser extension that you download via your browser of choice. The only thing to note here is that certain web wallets may only be compatible with certain browsers so you’ll want to check the specification of your web wallet of choice.

Getting a Desktop or Mobile Wallet

To get a desktop or mobile wallet, you’ll need to download and install the chosen crypto wallet application on your computer or smartphone. These are arguably the easiest kinds of wallets to get as you can download them directly from your mobile device. Unfortunately, the very thing that makes these cryptocurrency wallets so convenient – internet connectivity and the use of a cell phone or laptop as a host device – is the thing that makes them so insecure.

Getting a Hardware Wallet

If you want to get a hardware wallet you will have to purchase them online or in-store from an approved retailer. Of course, the other crypto wallet options are free while you have to pay for a hardware wallet. That being said they do offer far stronger security than the other options while providing you full ownership over your assets. 

Step 3: Set up Your Crypto Wallet

How To Set up Your Software Wallet

1. Download the Crypto Wallet Software: You must get your software wallets from the wallet provider’s official website and double-check that you have the right website before downloading anything to avoid malware.
2. Install the Crypto Wallet Software
3. Create a New Crypto Wallet: When you generate a new cryptocurrency wallet, the wallet provider will prompt you to create a password to protect the wallet on your device. Make sure you pick a strong password that isn’t easy to guess as this is one of the primary layers shielding access to your assets.
4. Backup Your Crypto Wallet: The crypto wallet provider will also prompt you to record your secret recovery phrase. This is the most important step in setting up your software wallet as it is what allows you to restore your cryptocurrency wallet to any device, with any wallet provider. Never store your secret recovery phrase on any internet-connected device: instead keep it offline, in a secure location.
5. Set Up Security Features: Software wallets may have additional features such as two-factor authentication to help you further protect your crypto wallet. In fact, the best way to secure your software wallet is to use it in conjunction with a hardware wallet, such as a Ledger device.

How To Set up Your Hardware Wallet

As an example of how to set up a hardware wallet, here is the process of setting up your very own Ledger crypto wallet.

1. Purchase Ledger Crypto Wallet: Make sure to buy your device from the Ledger website or one of our official retail partners.
2. Install the Companion Crypto Wallet App: Ledger Live is the companion crypto wallet app for Ledger devices, allowing you to buy, sell, and manage your crypto while enjoying Ledger’s battle-tested security.
3. Connect the Device to Your Computer
4. Initialize the Device: The most important part of initializing your Ledger crypto wallet is creating a PIN code. Your PIN can be anywhere from 4-8 numbers, and the longer it is the stronger. What’s more, make sure to choose a strong PIN that isn’t easily guessable or linked to you personally.
5. Backup your Crypto Wallet: Same as with a software wallet, it’s important to note down your secret recovery phrase and keep it somewhere safe and offline.

Step 4: Buy Crypto or Transfer Your Assets to Your Crypto Wallet

The simplest way to get crypto to fund your cryptocurrency wallet is to transfer it from another wallet, but if you want to buy crypto with fiat currency such as dollars or euros, you will need to use an on-ramping service. The most popular on-ramping options are typically centralized exchanges that use custodial wallets. Using such a wallet means you’re not truly in control of your funds, so if you do use a custodial on-ramping service, you’ll want to move your funds to a non-custodial wallet such as a software or hardware wallet.

 For a more convenient non-custodial solution, you can on-ramp via Ledger Live. Ledger Live offers you the choice between multiple buy providers, with over 80+ coins to choose from—always benefitting from Ledger’s security model and dedication to self-custody.  Just choose the asset you want to buy, whether from a centralized or decentralized exchange provider, and secure your assets directly with your Ledger crypto wallet.

Step 5: Explore and Use Your Crypto Wallet

Buying and storing crypto is just the beginning. Using a hardware wallet such as a Ledger crypto wallet, you have access to much more complex DeFi functions like lending and staking. Your crypto wallet is also your key to accessing the world of web3 and decentralized apps (dApps) and interacting with alternative assets like NFTs or memecoins.

Of course, you must always take care when you’re exploring the blockchain. If you’re using a software wallet, beware of online threats such as phishing and malware. If you’re using a hardware wallet like a Ledger, you might not need to worry about malware, but you should still triple-check every transaction before signing since a hardware wallet can’t protect you from mistakenly signing malicious transactions.

So what are you waiting for? Explore the Ledger ecosystem and see what the world of secure self-custody has to offer. 

Frequently Asked Questions About Crypto Wallets

What Is a Crypto Wallet?

A crypto wallet is an interface that allows you to access and manage your funds on a blockchain, including sending and receiving valuable digital assets. It’s the bridge between you and your crypto on the blockchain, allowing you to take part in crypto trading, DeFi platforms, or even NFTs.

However, despite what the name suggests, a cryptocurrency wallet does not contain your coins or tokens – those stay on the blockchain itself. Rather, the purpose of a cryptocurrency wallet is to secure private keys that allow you to access that crypto.

Why Do You Need a Crypto Wallet?

If you intend to hold any crypto tokens or interact with a blockchain network, a crypto wallet is indispensable for ensuring the security and functionality of your digital assets. Also, your crypto is only as safe as your wallet. So, while you can store it on a crypto exchange, it is not advised to do so.

What Are the Different Types of Crypto Wallets?

The two main crypto wallet types are custodial, wallets whose private keys are controlled by the wallet provider, and non-custodial wallets, whose private keys are controlled by the user. Non-custodial wallets can further be split up into classifications of hot and cold wallets, which are determined by whether the wallet keeps the private keys online or offline.

How to Choose a Crypto Wallet?

Choosing a crypto wallet depends on your specific needs but some general factors are important to consider such as whether it offers self-custody, how secure it is, and which networks and assets it supports.

Are Crypto Wallets Free?

While hardware wallets do cost money as they are physical crypto wallets, they offer superior security to free software wallets.

How To Use a Crypto Wallet?

Using your crypto wallet’s interface, you can easily send, receive, and manage your assets. Many wallet functions are completed by “signing” a transaction. This is the act of using your private keys to verify to the blockchain that a transaction is authorized.