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Four Easy Steps To Set Up Your Own Crypto Wallet

By Marco Wutzer July 27, 2022 Facebook Logo Twitter Logo Email Logo LinkedIn Logo

 

Last week, I explained why a crypto wallet is essential to financial sovereignty

This week, I’m going to walk you through how to find the right crypto wallet, and how to set it up.

You don’t technically need a crypto wallet. But if you value your crypto investment, not keeping your holdings in a wallet is a huge mistake. 

It’s especially important in protecting your long-term crypto investments. 

As an advocate for widespread adoption, I support long-term crypto investments as opposed to quick, day trading (where most people lose money over time). 

As disruptive blockchain technology is utilized more and more, it will grow into an undeniable part of our everyday lives. 

Widespread adoption of crypto technology is creating opportunities for people around the world. It’s opening the door to financial sovereignty for those living in countries with failing currencies and limited (or non-existent) opportunities.

Widespread adoption will undeniably lead to a better future for everyone across the globe. A future where complete freedom from governments and institutions will eventually become a reality. 

It sounds like a pipedream. But I assure you, that future is very real. 

In that spirit, I will continue educating folks on cryptocurrencies.

 

How To Find The Right Crypto Wallet

A crypto wallet is like an online bank account for your cryptocurrency, but with a few major differences. 

Crypto wallets aren’t backed by government deposit schemes. They hold only cryptocurrencies. Most importantly, they leave you in control of your funds at all times.  

When you keep your crypto in an exchange account, like Coinbase or Kraken, those companies are in control of your holdings. 

When choosing a crypto wallet, you must understand that different blockchains often require different wallets. 

Metamask, one of the most popular web wallets, supports a handful of networks, but is limited. 

(Click image to enlarge)

It supports Ethereum, but not Bitcoin. With over 30 million active users, it’s one of the most widely used Ethereum wallets. 

The user-friendly interface makes it easy to navigate and lets users interact with decentralized apps (dApps) and access popular NTF marketplaces. 

Anyone using Google Chrome, Microsoft Edge, Mozilla Firefox, or Brave browsers can download the wallet extension.

Most importantly, users have full control over their private keys. Account information is encrypted and stored locally, so no information is stored on Metamask servers. 

Although Metamask is versatile, it has its limitations for more advanced, long-term crypto holders. But its user-friendly design and easy access make it a great option for newer crypto holders who are also interested in NFT and dApps. 

Best ‘Cold Wallet’ Option

As I mentioned in last week’s article, a ‘cold’ or ‘hardware’ wallet is the safest way to hold your crypto. 

With a cold wallet, your crypto’s private keys are stored on a device, similar to a hard drive or thumb drive, that is not connected to the internet. 

One of the most popular, and versatile cold wallets is Ledger

Whether you’re looking to keep your crypto safe for the future, or manage it daily, Ledger has you covered. 

With a slogan “It’s your money. Own it.” Ledger’s wallets provide industry-leading security that keeps your private key protected at all times. 

When you own crypto, that private key is what gives you access to your coins. And with a Ledger you are the only one in control of that key. 

In addition to safely storing your crypto, Ledger, when combined with the Ledger Live app, lets users store AND manage their crypto assets. 

With access to 5,500+ crypto assets, the Ledger Live app allows you to buy, sell, exchange and grow your portfolio. 

If your crypto is not one of the 5,500 supported by Ledger, there are several compatible external wallets you can connect with it. 

How To Set Up Your Crypto Wallet

Setting up your crypto wallet is a fairly simple process. 

Setting Up a Web Wallet

Setting up a Metamask wallet only takes a couple minutes. If you’ve ever downloaded an app on your iPhone, or an extension on your internet browser, then the process of setting up your Metamask wallet will feel familiar. 

You start by downloading the browser extension. From there, you create a password and a name for your wallet, and then create a ‘secret phrase’ for verification purposes. 

Most web wallets use nearly identical processes, and will help walk you through it. 

Setting Up a Cold Wallet

Setting up a hardware wallet is a different process. Hardware wallets are external physical devices that only connect to the web when plugged into your computer.

While this is without a doubt the safest way to store your holdings, it’s a more involved process. 

Step One: Purchase Ledger Wallet

Your first step in setting up a Ledger wallet is to purchase the device. If you’re ready to take your crypto investments seriously enough to purchase a cold wallet, DO NOT purchase them secondhand or from a non-trusted supplier. 

By purchasing a secondhand device or ordering from an off-brand discount website, you run the risk of receiving a faulty device, a knock-off device, or, worse, a tampered device containing malware. 

You wouldn’t transfer your paycheck to an online bank you were unfamiliar with just because it was for some reason a ‘better deal.’ 

Between the Nano S Plus and Nano X, Ledger’s two hardware wallets will fill about every crypto investors’ needs. 

Step Two: Install and Set Up Ledger Live App

Once you have received your Nano S Plus or Nano X, you can set up the Ledger Live app

The Ledger Live app acts as an interface with your Ledger hardware wallet. Your private key, however, will still be stored offline in the device. 

While you can still buy crypto on apps like Coinbase, Ledger Live is the only interface that allows you to send and receive transactions, set up accounts, and view your balance on your Ledger wallet. 

Step Three: Initialize Device

Once installation is complete, you’ll initialize your new device, then create a four- to eight-digit PIN code. This code protects your Ledger in case someone steals it. 

After confirming your PIN, your Nano device will generate a 24 word recovery phrase or “word seed.” This recovery phrase is a representation of a “master key” that is used to access all your crypto assets. 

Your recovery phrase is the only one of its kind. While all your assets aren’t actually stored on your device, anyone with your code will have access to your holdings. It’s extremely important that you keep your phrase  somewhere safe.

Under absolutely no circumstances should you ever take a picture of your phrase, store it on a computer, in the notes app on your phone, or anywhere on a device with internet capabilities. 

The security of your device depends on your keeping that phrase entirely offline. 

If your device gets lost, stolen, or damaged, you will still be able to fully recover all of your holdings as long as you have your word seed. 

Make sure you take time to copy your word phrase correctly and in the exact order. After an additional recovery check in which you re-enter your word seed, you are ready to connect and unlock your device. 

Ledger recommends you complete a firmware update before you start using your device. If no update is available, then your device is already up-to-date. 

Step Four: Transfer Crypto Into Ledger Wallet

From here you’re able to download apps required by certain cryptos. 

If you have bought crypto that is currently on an exchange platform, select the “Receive” option on your Ledger Live menu to begin transferring your holdings to your wallet. 

When you get your public address from Ledger Live, simply copy and paste it into whichever exchange your cryptos are currently stored on. 

When the balance is updated in Ledger Live, then the transaction has been completed. 

If you’ve made it this far, congratulations! You have successfully set up your hardware cryptocurrency wallet. And in doing so, you have taken a huge step toward financial sovereignty. 

I know this is still so new to a lot of people, but I will continue to help you through this process. 

Cryptocurrency isn’t just creating profit opportunities for us, it’s helping to build a better world. A world where opportunities don’t depend on where you live. A world where financial sovereignty is very real. 

To sovereignty and serenity,

Marco Wutzer

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