The concept of crypto wallets is a little overwhelming to those of us new to crypto. Even those who have been investing in crypto currencies should be evaluating what they are getting from their wallets on a consistent basis to see if they are getting the most from them.
As someone still in the early phases of learning about crypto, I'm adding new wallets all the time. I first started with one of the industry standards - Coinbase. I also have added Doge, Exodus, Ronin, Bitcoin, and MetaMask wallet in just my first month dealing with crypto. An therein lies the problem, so many wallets to handle various cryptocurrencies.
For our purposes today we will focus on hot wallets, or those always connected to the internet. Once my pile of crypto grows, I will likely move to a cold wallet, or one that store your keys on a piece of hardware not connected to the internet thus more secure.
Coinbase is good for beginners like me with over 500 coins to choose from and user-friendly interfaces both on the web and in their phone app. It can be easily connected to a bank account and also hold NFTs, which I'm interested in. I like the fact that you can earn free coins with Coinbase by watching some simple videos learning about various crypto coins. I've added Stellar Lumens (XLM), The Graph (GRT), AMP (AMP), Fetch.ai (FET) and IoTex (IOTX) through this program worth around $22 after finishing each of the lessons. I also transferred my first earned BitCoin into the wallet worth about $5.
The transfer process is a little unnerving at first making sure your wallet address is correct. After triple checking the address I hit send and just hoped I did the process correctly, which is why I only sent $5 in my first ever transaction. That said, as soon as the transfer was confirmed I had a bit of "buyers remorse" asking myself the question - is this really the best wallet to store my hard earned Bitcoin?
To answer the question, I had to answer a rather big question. What did I plan on doing with the Bitcoin? The best answer I could come up with is to HODL (misspelling of "hold" that refers to a buy-and-hold strategy for crypto) the worlds most well know crypto. So is Coinbase the best wallet for hodling? The answer was clearly no after doing minimal research.
If you are going to hold your crypto for a long time you certainly want it to appreciate. Other than price appreciation you can grow your crypto through staking and/or earning interest.
Staking is the process of actively participating in transaction validation (similar to mining) on a proof-of-stake (PoS) blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn staking rewards. The problem for me here is I don't have a lot of crypto yet so staking isn't really a good option.
Interest, on-the-other-hand, is a very attractive way for me to grow my crypto assets. Imagine adding an extra guaranteed 8% on top of your normal appreciation. THAT IS HUGE! Imagine you have a Bitcoin worth $50K, if it doesn't go up in value you can still double your value in eight years at that interest rate. I'd rather have $100K after eight years than simply having my original $50K... Now imagine your investment growing with both price appreciation and compound interest!
So with my second Bitcoin transfer, after a little research, I decided to go with a Nexo wallet. Nexo is a blockchain system that supports crypto borrowing and lending while offering interest on your coins/tokens. As such, you can get fiat currency when you want it, but also make money off of your "hodl"ed cryptocurrency. Sign me up please! The platform has been around since 2018 but is really gaining traction as of late. The user friendly Nexo wallet app is available on both IOS and Android platforms.
Is there a catch? Kind of... To get the highest yield Nexo requires that 10% of your assets in the savings account be held in NEXO tokens which will get you around 12% interest rates on fiat/stablecoins and 8% on crypto savings. If you don't meet this requirement, you will still get interest - 8% on fiat/stablecoins and 5% on cryptocurrencies. Still pretty good and they offer interest on a number of different coins to earn interest on.
Nexo is a safe and secure platform built on Ledger Vault which insures assets up to $150 million. They also have a card that you can order and manage from your Nexo wallet which gives you 2% cashback on purchases that can be taken in either Nexo or Bitcoin. I haven't switched to the card but am currently looking into it along with other cash back crypto cards.
There are other wallets where you can earn interest, crypto.com being chief among them. If you HODL like me, I would strongly encourage you to take a look but then again I'm not a financial advisor so please do your own research. So I'm curious and want to know, as Capital One likes to famously ask - What's in your wallet? Please let me know in the comments below.
Also, if you are looking to add a Nexo wallet - please use my referal link here to get $25 in Bitcoin once you top up at $100 or more.