What is a Crypto Wallet

Cryptocurrency wallets are interfaces that allow users to manage their crypto balances and transactions on the blockchain. There are several types of crypto wallets including software wallets, hardware wallets and paper wallets.

Do you need a crypto wallet?

Your cryptocurrencies are only as safe as the way you choose to store them. With a crypto wallet, you have full ownership of your crypto assets and private key. On top of that, crypto wallets grant you access to many decentralized applications (dApps) on Web3, such as NFT marketplaces, GameFi, DeFi staking platforms and more.

Alternatively, if you are new to crypto or trade frequently, you may prefer to store your crypto on an exchange – it is simple to use and often backed with top-tier security and backup options for those who are prone to losing passwords and devices.

At OKX, we employ industry-leading security measures to keep your crypto safe. Find out more about our security protocols below.

Types of crypto wallets

Hot wallets vs cold wallets, custodial wallets vs non-custodial wallets – what are the different types of crypto wallets?

Hot Wallets (Software Wallets)

Hot wallets store your private keys online. They are simple and convenient to use, giving you constant access to online decentralized applications (dApps). However, since hot wallets are connected to the internet, this makes them more vulnerable to hackers. If you are new to crypto or plan to trade frequently, hot wallets will give you the accessibility that you need.Examples of hot wallets: web-based wallets, desktop wallets, and mobile wallets.

Cold Wallets (Hardware Wallets)

Cold wallets, on the other hand, store your private keys offline. While they reduce the threat of hacks and online attacks, they are typically more expensive and inconvenient to use. With the reduced ease of access to your crypto assets, cold wallets are most suitable for individuals who intend to hodl huge amounts of crypto for a long time. That being said, with cold wallets, the onus of keeping your hardware safe and secure lies on you.Examples of cold wallets: hardware wallets and paper wallets.

Custodial Wallets

With custodial wallets, a custodian or third party has control of your crypto assets and private keys. Wallets offered on exchanges are typically custodian wallets. They are easy and convenient to use, especially if you need to access your crypto on the go. Moreover, there are usually backups in place for individuals to regain access to their wallets if they lose their passwords or devices. Having said that, since custodial wallets require less personal responsibility, it is always advisable to pick reputable custodians that have security measures against online hacks.

Non-custodial Wallets

Non-custodial wallets, on the flip side, give you full control of your crypto assets and private keys. The OKX DeFi wallet is one example. When creating a non-custodial wallet, you will typically be asked to write down a list of randomly generated words, also known as a seed phrase. Your seed phrase is then used to generate your public and private keys. It is crucial to keep your seed phrase safe and not store it digitally. With a non-custodial wallet, you are responsible for the security of your crypto assets and private keys. If you lose your seed phrase, it will be very difficult or impossible to recover your crypto wallet.

OKX DeFi wallet

Often, a mix of both hot and cold wallets is used to strike a balance between short-term trading and long-term hodling of cryptocurrencies. OKX offers both a custodial wallet on our trading platform, alongside a crypto DeFi wallet which allows you to explore OKX’s Web3 ecosystem.

Easy to use

Available as a browser extension and as a mobile application, you may access your crypto assets and explore dApps anywhere.

Access to Web3

Gain access to a wealth of decentralized finance platforms and protocols including staking, NFT marketplaces and more.

World-Class Security

Trade and explore the world of Web3 safely and securely with OKX’s industry-leading security measures.

Own Your Crypto

Your keys, your crypto. Have full control of your cryptocurrencies with OKX’s non-custodial DeFi wallet.

What is the best crypto wallet?

When choosing a crypto wallet, you should assess your needs and requirements. Each type of crypto wallet has different purposes, pros and cons. If you are a beginner or wish to trade regularly, you may prefer to use a hot wallet to ensure accessibility to your crypto assets. If you plan to hodl large amounts of cryptocurrencies long-term, you may prefer a cold wallet to have greater security as well as full control over your crypto assets and private keys. Note that different blockchains and dApps may only be compatible with specific wallets. For instance, if you wish to explore Solana’s ecosystem, you should ensure that your wallet is compatible with Solana’s blockchain.

Ultimately, there are a few things you should always consider when choosing a crypto wallet:

- Security - Compatibility – i.e. supported blockchains and cryptocurrencies - User experience - Fees - Reputation of the wallet

Aside from that, it is important to practice good cyber hygiene to keep your crypto safe. Good practices include:

- Updating your software regularly - Use strong passwords and do not reuse them - Do not upload your seed phrase to the internet and/or share your private keys with anyone - Always use two-factor authentication – e.g. Google Authenticator or Authy

How do I send and receive crypto with my crypto wallet?

To send crypto, click send, select the asset and amount you would like to send, paste the recipient’s crypto address or scan their QR code, select the right network and hit send. To receive crypto, click receive, and select the asset you would like to receive along with the network you would like to receive it on. Thereafter, your crypto address and/or QR code will be generated for the sender. Always make sure that the receiving wallet supports the network you intend to send or receive your crypto through. Selecting the wrong network will result in the loss of your crypto.

Are crypto wallets safe to use?

Crypto wallets from reputable providers like OKX are generally safe to use. That being said, it is advisable to double up on your security by installing a two-factor authentication app (e.g. Google Authenticator, Authy), storing your seed phrase safely, using strong unique passwords and updating your software regularly. When navigating dApps, always ensure that the URLs are correct before connecting your crypto wallet.

How do I recover my crypto wallet?

As long as you have your seed phrase, you will be able to restore your crypto wallet. If you encounter an error, please check if there are any invalid words or spelling mistakes in your recovery seed phrase.

What is the difference between OKX exchange and OKX wallet?

OKX exchange allows you to buy and sell cryptocurrencies. It offers a custodian wallet backed by world-class security protocols, allowing you to trade crypto safely anywhere, anytime. OKX wallet is a separate non-custodial wallet available as a mobile application or browser extension. It gives you full ownership of your crypto assets and private keys, and allows you to browse OKX’s Web3 ecosystem.