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 which options are available so that you can decide for yourself which is best suited to your situation.
Did you know that it is impossible to own or trade Bitcoin or other cryptocurrencies without a wallet? That's why it's important to understand what types of wallets there are and how they differ.
A crypto wallet is actually nothing more than a digital wallet for cryptocurrencies. It allows you to securely store and send digital money in the form of Bitcoin, Ethereum or Solana, for example. A wallet contains both the "public address" and the "private key". You can think of the public address as your bank account number. You can use it to receive cryptocurrencies. So if your public address is the account number, then the private key is the corresponding password. You can use it to access your cryptocurrency and send it.
There are basically two types of wallets, i.e., the place where your cryptocurrency is stored: custodial or non-custodial. We show you how they differ.
Your cryptocurrency is managed online by the crypto exchange. This means your cryptos are always quickly available, and you don't have to deal with storage. However, due to online storage, they can become victims of theft, or—if the exchange goes bankrupt—your cryptocurrency may, depending on the legal situation, fall into the bankruptcy estate.
You are the true owner of your cryptocurrency. This gives you full control. You can choose between online options like apps or offline options like the Cryptonow Wallet®. The offline variant offers you the highest form of security. Since you have full control, you lose access to your cryptocurrency if you lose or forget your access data.
Third-party custody or own custody?
For maximum security, we always recommend storage in an offline wallet, also known as a cold wallet or cold storage. However, depending on the situation, an online wallet may be more convenient. Let's look at the differences in detail:
| 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 keep the cryptos |
| Disadvantages | - Your cryptos can fall victim to theft more quickly. - You are not the real owner: if the provider goes bankrupt, your cryptos may also become part of the insolvency estate, depending on the legal situation | - You have full control over your cryptocurrency: if you lose your access data, your cryptocurrencies are also lost |
| Wallets | - Online: Crypto exchanges or brokers | - Online: Desktop wallets, app wallets - Offline: Hardware wallet or paper wallet |
| Example | Cryptonow Invest | Cryptnow App (online) Cryptonow Wallet voucher card (offline) |
The public address and private key are managed by the or . After purchasing cryptocurrency, these are credited to your account online. The big advantage is that it is super easy and convenient to resell them. However, if you want to store a larger amount of cryptocurrencies long-term, we recommend transferring them 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 therefore better protected against theft, as the wallet can be restored on another cell phone or computer if your smartphone is stolen. With the app, you have full control over your cryptocurrency. This means that if you lose your access data (seed phrase), you will also lose access to your cryptocurrency. For the highest level of security, we recommend offline wallets.
In contrast to online wallets, the private keys are stored offline and are therefore protected from online threats. The Cryptonow Wallet®, for example, is such an offline wallet. The public key and the private key are noted on the wallet. You therefore have full control over your cryptocurrencies. However, it is important to store the Cryptonow Wallet® in a safe place and to keep your private key safe, as otherwise access to your cryptocurrencies may be lost.
Depending on the situation, a different type of wallet may be recommended. If you trade cryptocurrencies frequently and use your wallet regularly, an online wallet might be the better choice. However, if you own a large amount of cryptocurrencies and want to store them long-term, we recommend the most secure option with the Offline Cryptonow Wallet®.
Here are the three most popular ways to store your cryptocurrencies - summarized simply and clearly.
Crypto brokers or exchanges take over the safekeeping of your cryptocurrencies so that you can conveniently keep them online in your account. The disadvantage is that you do not have full control over your private keys , and security depends on the exchange.
With app self-custody, you have full control over your cryptocurrencies. Your "public address" and "private key" are protected by an encrypted seed phrase. But beware: if you lose your access data, you will also lose access to your cryptocurrencies.
With offline storage, private keys are kept offline and thus protected from online threats. The Cryptonow Wallet® is an example of such a secure offline wallet. The disadvantage is that the loss of the wallet or private keys can jeopardize access to your cryptocurrencies.
This article does not constitute investment advice or a solicitation to buy or sell digital assets or other financial instruments or to enter into any other financial transaction. The main purpose of this article is to provide general information. No representations or warranties, express or implied, are made regarding the fairness, accuracy, completeness, or correctness of this article or the opinions contained therein. Therefore, it is advisable not to rely on the fairness, accuracy, completeness, or correctness of this article or the opinions contained herein. Some statements in this article may contain forward-looking expectations based on our current views and assumptions. These statements are subject to uncertainties and may lead to actual results, performance, or events differing from the statements made in this article.
The Cryptonow Group and its subsidiaries, as well as any advisory or representative persons, cannot be held liable in any way for this article.
It is important to note that investing in digital assets carries risks as well as potential gains.
