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Making money from Bitcoin is the primary aim of all investors when dealing with one of the world’s largest cryptocurrencies.
The currency’s recent surge in popularity is ensuring there are now more people than
ever interested in investing, trading and reading all about cryptocurrencies.
A variety of factors will influence how you look to make money from Bitcoin – investment experience, how risk-averse you are, technical knowledge and how you want to receive any rewards. Utilizing a cryptocurrency wallet is an important part of how you use, store and protect your digital money and can play a crucial role in helping you achieve success from your investments.
What is a cryptocurrency wallet?
A cryptocurrency wallet is a software program. It helps any users send, receive and monitor their cryptocurrency balance, providing a safe place where you can access funds and make transactions.
In many ways, this wallet is like your current bank account. You can use it to track your balance, transactions and review any incoming deposits. At the same time, it is different to your standard bank account as it never contains any cryptocurrency. Users trade ownership rather than cryptocurrency itself and this is recorded on a blockchain. Each wallet has a private key, not only acting as a password to each wallet but also as a way to trade.
How to choose your cryptocurrency wallet
Most Bitcoin wallets fall into two categories. Software wallets or hot wallets are accessed online through a desktop or mobile device. Cold wallets utilize hardware such as a USB drive or a piece of paper with a password written on it.
Online wallets are very popular among Bitcoin investors. They offer greater convenience when compared with the cold wallets, especially when it comes to making regular purchases. Many can be maintained via an app where users can manage all aspects of their Bitcoin exchanges.
However, using cloud services via a mobile or connected device does create some security risks. Hot wallets rely on internet connections to function, which provides an opportunity for scammers and cybercriminals. Accessing an online wallet certainly is more convenient but there could be gaps in secure networks, potentially putting you at risk of hacking.
Cloud services also involve third-party providers and means users need to provide them with their private keys. Mobile phones may make our lives easier but they also track and store huge amounts of data about us, making them a great target for hackers.
Android phone cryptocurrency wallets
Android phone users can utilize software wallets from their devices. These wallets operate digitally, utilizing cloud storage, meaning the wallet is easy to access as long as you are using a connected device.
We are all fallible too and many of us have either lost or damaged a phone over the years. This is another potential security risk for cryptocurrency wallets.
Why getting the right cryptocurrency wallet is important
Choosing the right kind of cryptocurrency wallet is down to the end-user and how they want to maintain their digital currency.
Short-term storage for smaller amounts of cryptocurrency, or a wallet allowing for regular use may be best suited with a hot wallet on your android device. This can play a major role in helping you make money from the cryptocurrency.
Buying and holding is one of the simplest ways of making money from Bitcoin and requires a wallet. This strategy involves investing in Bitcoin, then storing it in your wallet until a price spike, no matter how long that may take. But with current forecasts suggesting the market cap could reach $1 trillion sometime in 2021, this could be sooner than you think.
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