What is a crypto wallet and how to set up one?
The Skrill Cryptocurrency Service is currently available in selected countries only. If you don’t see a Crypto section in your account, this means you can’t perform crypto transactions.
Crypto wallets allow you to send, receive, and spend cryptocurrencies like Bitcoin and Ethereum. They keep your private keys (passwords that give you access to your crypto) safe and accessible, allowing you to transact with cryptocurrencies like Bitcoin and Ethereum.
Please note that while Skrill is a digital wallet offering a variety of crypto services, you cannot create a crypto wallet within your Skrill account. You can use your Skrill account to withdraw fiat money (such as EUR, USD, etc.) to a third-party crypto wallet you have created.
What are the most popular types of crypto wallets?
You can use different types of wallets to store your crypto depending on what you want to do with it. The most popular options are hosted wallets used for simplicity, non-custodial wallets for full control, hardware wallets for added security, or even using multiple wallet types.
- Hosted wallets automatically store your cryptocurrency and are easy to set up. They are called ‘hosted’ because a third party safeguards your crypto holdings. Unlike self-managed wallets, you won't have to worry about losing keys or USB wallets. If you simply want to trade, send, or receive crypto, a hosted wallet is the easiest choice.
- Non-custodial wallets, also known as self-custody wallets, store your crypto without relying on a third party for safeguarding. They provide the software to store your crypto, but it's your responsibility to remember and protect your private keys. If you lose it, your crypto becomes inaccessible, and if someone else finds it, they can access your assets. Non-custodial wallets also give you access to more advanced activities like yield farming, staking, lending, and borrowing.
- Hardware wallets are like small USB drives that store your crypto's private keys offline for added security. While not as popular due to their complexity and cost, they provide advanced protection, safeguarding your crypto even if your computer gets compromised. However, they're less user-friendly compared to software wallets.
How to set up a crypto wallet?
- Select a trusted platform based on security, user-friendliness, and compliance with government and financial regulations.
- Register your account by entering your personal information and choosing a strong password.
- Enable 2-factor authentication (2FA) for enhanced security.
- Install a wallet app of your choice.
- Register your account. Unlike hosted wallets, non-custodial wallets don't require any personal information, not even an email address.
- Save your private key and keep it secure. Your private key is a randomly generated 12-word phrase. Keep it in mind that losing or forgetting it means losing access to your crypto.
- Fund your wallet by transferring crypto from another source into your non-custodial wallet. Non-custodial wallets might not support direct purchases of crypto with fiat currency (e.g., USD, EUR etc.).
- Select and buy the hardware.
- Download and install the required software exclusively from the official company website of your selected hardware brand and follow the provided instructions to create your wallet.
- Fund your wallet by transferring already existing crypto assets to your hardware wallet. Like non-custodial wallets, hardware wallets typically don't support direct purchases of crypto with fiat currencies.
Cryptocurrencies are complex, unregulated, without consumer or financial protections. Capital Gains Tax or other taxes may apply. Prices are volatile; only risk what you can afford to lose.