Given how popular cryptocurrencies have become recently, it’s natural to wonder if there are any free crypto wallets on the market.
The answer is yes – a definite yes.
There are plenty of free crypto wallets that you can use. Along with that, most of them support a large variety of cryptocurrencies – from Bitcoin to Ethereum and even Dogecoin.
However, there are a few things that you need to keep in mind.
There are 2 types of crypto wallets
Firstly, crypto wallets are divided into two distinct groups, i.e., cold wallets and hot wallets. You can find a few of them in this list here: https://blog.tezro.com/best-crypto-wallet-apps/
Cold wallets or hardware wallets store your cryptos offline via a device or even a piece of paper. As cold wallets store assets offline, they are resistant to cyber-attacks and hacks.
However, they can still be hacked into if connected to a computer with an internet connection. Also, keep in mind that cold wallets can get damaged or stolen – so it’s best to maintain backups.
On the other hand, hot wallets or software wallets store your cryptos digitally – thus allowing users to gain easy access to their holdings with minimal fuss.
Unfortunately, hot wallets are pretty vulnerable to cyberattacks, so it is recommended that you store a minimal amount of cryptos on them.
Ideally, hot wallets should be used in conjunction with cold wallets, with cold wallets being used to store the bulk of your holdings. Meanwhile, hot wallets should serve as temporary storage for payments or investments.
Are hot wallets free?
Despite their numerous vulnerabilities, hot wallets have one undeniable advantage over cold wallets: they are free-to-use.
From crypto exchanges to dedicated wallet platforms, most if not all hot wallets can be used without charge.
But of course, you’re probably wondering, how is this possible?
For starters, hot wallets usually charge users fees to process transactions or transfer funds from one wallet to another.
Some wallets also feature in-house exchanges that allow you to buy and sell your chosen cryptocurrency. Thus, whenever you perform a transaction on the exchange, you’ll have to pay for the services they offer.
Other wallets allow users to set custom fees for their transactions. The catch here is that the lower the fee, the lower the priority of your request. So, if you set a price that’s too low, it’ll probably take forever for your transaction to be completed.
Are cold wallets free?
Cold wallets are specialized devices; they’re not free-to-use and must be purchased first.
Of course, you may be asking – why not use a USB stick or external hard disk instead of a cold wallet.
Well, you actually can use them to store your cryptocurrencies, but as most USB sticks and hard disks are HDDs, there is the risk of them getting damaged or corrupted over time.
And when that happens, you’ll lose all access to your cryptocurrencies and probably never see them again. Hence this is why most serious crypto enthusiasts prefer to invest in dedicated cold wallets to keep their holdings safe.
While they can be pricey, cold wallets are usually worth the initial investment thanks to the security they provide.
However, there is one instance of cold wallets that can be used for free – and these are known as paper wallets. Unlike hardware wallets, a paper wallet is essentially a sheet of paper with your crypto keys.
So, why aren’t more people making use of paper wallets?
Simply put, it’s because paper degrades and fades over time. Besides being easily damaged, a paper wallet can easily be misplaced or stolen, which is why most folks tend to avoid using paper wallets.
Conclusion
Keeping your cryptocurrencies safe and protected can be challenging even under the best circumstances.
Hence this is why you should use a mix of cold and hot wallets to spread out your risk exposure better.