The best place to store your coins is a cryptocurrency wallet. There are five different types of cryptocurrency wallets: desktop wallet, mobile wallet, online wallet, hardware wallet and paper wallet.
In this lesson, I’m going to introduce you to the desktop wallet, point out its pros and cons and teach you how to download your first cryptocurrency desktop wallet.
Before going straight into the topic, I would like to say something about cryptocurrency exchanges. Most people use them for a place to store their coins.
Exchanges will never be a safe place because they are centralized third parties like banks that can lock you out not allowing you to withdraw your coins. They can also freeze your account and then you have to try to get your coins back.
Exchanges are storing HUGE amounts of coins, so hackers are constantly trying to compromise their security, and when they succeed, they use to split the loss across their members if they don’t have recovery funds.
Try to avoid using exchanges for holding your coins and use them only when you want to buy or sell something.
What is the desktop wallet?
A desktop wallet is a software that gives you the ability to access and manage your coins stored in the Blockchain.
The wallet that I am going to share with you is a self-hosted wallet which means that you are the only one responsible for the funds. No third party will have any control over your wallet and you will be the only one with the PIN to the wallet and recovery phrases.
If you lose the PIN of your wallet, you can retrieve your coins using a recovery seed. If you lose both, no one will be able to help you access your coins. They will be gone forever.
This is a very secure option but requires responsibility from you to keep your PIN and especially recovery seed as safe as possible.
It is crucial to extract recovery seeds also known as backup keys and keep it safe. If you are in control of it, you are the real owner of the coins.
As Mr Andreas Antonopoulos said,
Your keys, your Bitcoin. Not your keys, not your Bitcoin.
Which is the best desktop wallet?
There are various desktop wallets, and each one has its characteristics. Some of them will be more user-friendly and that will be the best option for beginners to understand and start with. On the other side, others will be focused more on security, not caring too much about user-friendliness.
In my opinion, the best desktop wallet is Exodus as it offers both, high security and also an interface that’s easy to understand and work with. Another advantage of Exodus is the fact that it allows you to store various cryptocurrencies.
What is Exodus wallet?
Exodus is one of the most popular desktop cryptocurrency wallets that enable you to store not only Bitcoin but more than 100 different cryptocurrencies.
Exodus was founded in 2015 with headquarter in Nebraska. Out of many advantages of Exodus wallet, here’s my top3:
1) It is easy to use
It is a wallet that is a great choice for those that are just starting with cryptocurrency and need an easy way of storing their assets.
If you are starting, Exodus would be probably the best one for you because of its simplicity. You just have to take the required steps to secure it properly by setting a strong password and extracting the backup key.
The majority of the actions available are straightforward and easy to follow. Combined with the clean design, it is very hard for anyone to get lost when sending or exchanging their coins.
2) It allows you to track your portfolio
Exodus is not just a cryptocurrency wallet but also a portfolio tracker that enables you to track your cryptocurrency portfolio. It also has a built-in cryptocurrency exchange that you can use to exchange a wide range of digital currencies.
3) It enables you to extract recovery seed
It doesn’t require any personal information from you, and your private keys and transaction data are encrypted and stored on your device. At the registration, you will be able to extract the recovery seed that will give you the full ownership of the wallet and the coins you will store there.
Exodus wallet is not perfect and it is not immune to hacks.
In theory, if you do all I’m going to teach you in this and next lesson, your coins will be very secure. But since this is still a wallet on your desktop that’s directly connected to the internet, you never know when some malicious software will be installed on your computer that will be tracking your activity. It can happen by clicking on an email, by downloading something from the internet and there are many other ways.
Even though it’s a very secure wallet, I can’t guarantee full immunity.
If you want full control of your coins, you should consider buying a hardware wallet that offers the highest level of security in the cryptocurrency world.
How to download Exodus wallet?
Exodus wallet comes with the versions for Windows, Mac, and Linux.
To download the Exodus wallet, head to exodus.io and click on Download.
Only download the wallet from the official website.
After downloading the Exodus wallet, the first thing to do is to click on backup and set up a password and extract recovery phrases.
You will receive 12-word recovery phrases that will be used to retrieve coins if something unexpected happens (for example, if you forget the password or your computer gets broken).
The recovery phrases or backup key has to be written down one by one in order and stored in a safe place.
If a hacker gets his hands over your backup key, you can quickly lose your coins. Because of that, never store them online or on some of your devices such as a computer or mobile phone.
Once you extract your backup key, the registration is done.
In the next lesson, I will teach you how to receive and send coins on your Exodus wallet.