Choosing a Wallet
The right wallet balances convenience and security. You'll compare hot, cold, and multi-sig options and set up a simple structure for daily use vs long-term storage.
Who Is This For?
- •New users setting up their first crypto wallet
- •Anyone unsure when to use hardware vs software wallets
Learning Objectives
- 1.Differentiate hot, cold, and multi-signature wallets
- 2.Choose a wallet stack for daily use and savings
- 3.Apply basic setup and backup best practices
Wallet Types
Wallets don't actually store your crypto—they store the private keys that prove you own it. Different wallet types offer different tradeoffs between security and convenience.
🔍 Explore Wallet Types
Hot Wallet
Software wallets connected to the internet. Browser extensions or mobile apps that make transactions easy.
Pros
- ✓ Easy to set up and use
- ✓ Instant access to dApps
- ✓ Free to download
- ✓ Great for learning
Cons
- ✗ Connected to internet = more attack surface
- ✗ Vulnerable to phishing and malware
- ✗ Not ideal for large holdings
- ✗ Browser extensions can be compromised
Hot Wallet
Online, convenient
Hardware Wallet
Offline, secure
Multi-Sig
Shared control
Building Your Setup
Most experienced users don't rely on a single wallet. They build a wallet stack that separates daily spending from long-term savings.
🛠️ Build Your Wallet Setup
Answer a few questions to get a personalized recommendation:
Your Recommended Setup
Start with a hot wallet to learn. Upgrade to hardware as holdings grow.
🏗️ Recommended Wallet Architecture
Daily Wallet
- • Hot wallet (MetaMask, etc.)
- • Small balance only ($50-200)
- • For DeFi, NFTs, experiments
- • OK to connect to new dApps
Vault / Savings
- • Hardware wallet (Ledger, Trezor)
- • Main holdings stored here
- • Connect via WalletConnect
- • Rarely touches new contracts
Treasury (Optional)
- • Multi-sig (Safe, Squads)
- • For team/shared funds
- • 2-of-3 or 3-of-5 signers
- • No single point of failure
💡 Pro tip: Transfer from Daily → Vault regularly. If your daily wallet gets drained, you only lose what`'s in it.
Setup and Safety
Your seed phrase is the master key to all your funds. Protecting it is the single most important security practice in crypto.
🔑 Understanding Seed Phrases
A seed phrase (recovery phrase) is 12-24 words that can regenerate your private keys. Anyone with these words controls your funds.
DO
- ✓ Write on paper, store in safe place
- ✓ Stamp into metal for fire/water protection
- ✓ Store copies in separate locations
- ✓ Consider a bank safe deposit box
DON`'T
- ✗ Screenshot or photograph it
- ✗ Save in cloud storage or notes apps
- ✗ Email it to yourself
- ✗ Share with anyone, ever
✅ Security Setup Checklist
Complete these steps to secure your wallet. Check off as you go:
Test Your Recovery!
Before storing significant funds, test recovery with a small amount:
- 1. Send a tiny amount ($5) to your new wallet
- 2. Delete the wallet app or use a different device
- 3. Restore using only your seed phrase
- 4. Verify the funds are accessible
Common Mistakes & Gotchas
These mistakes have cost people everything. Don't learn the hard way:
⚠️ Remember: In crypto, YOU are the bank. There's no "forgot password" recovery or customer support to reverse mistakes. Take security seriously from day one.
Knowledge Check
Let's see how well you understand wallet security.
What makes a wallet 'hot'?
When is a hardware wallet preferable over a hot wallet?
Why use multi-sig for a treasury or shared funds?
Where should you store your seed phrase?
What is a 'burner wallet' used for?