The cryptocurrency ecosystem has been flooding more than ever and eventually, it has become a matter of concern for Crypto users concerning its security.
Apart from Bitcoin, several other cryptocurrencies are in the Crypto market and you might as well need a virtual wallet to store your digital assets. People who are accustomed to how cryptocurrency storage works may not find it difficult to deal with; but beginners and intermediate level users often question the method in which cryptocurrency wallet works.
For long-term crypto users, they are well aware that a cryptocurrency wallet is a holy grail when having to store digital assets. One thing that a long-term user might not know is that to ensure guaranteed security, it is best to diversify the assets across multiple wallets (beyond the usual precaution of having a hardware wallet).
To sum it up, keeping your assets in one wallet is similar to keeping your eggs in one basket and therefore, being prone to breaking.
The alt-coin wallet: is it needed?
In the Crypto world, the alt-coin wallet is not much used by an average user. However, crypto users with considerable amounts stored in single virtual assets like Ripple or Litecoin may find some interest in keeping the assets safe in the personal wallet; similar to what they would have done with Bitcoin.
Even though modern cryptocurrency exchanges function effectively in keeping your funds secured, compared to the predecessors, the issue of hackers still lingers at large.
The concept behind diversifying security is to distribute your assets over separate wallets, which reduces the probability of getting hacked. Learn more here.
For recent crypto users, it must be known that the type of wallets maintained by you, reflects the different cryptocurrencies that you possess. We bet you were unaware that you can be the holder of multiple wallets; either to hold different cryptocurrencies or to hold multiple same currency or both.
Not only so, but you can also have multiple digital wallets or benefit from the multi wallets that enable you to store alternative currencies, together in one place.
Holding different wallets might serve you well if you are planning to manage your currencies and enhance their protection in a better way. This might have several security benefits although managing separate wallets might become stressful for some.
Do you need multiple wallets? Yes.
The thought of having multiple wallets seems overwhelming but it can be effective in protecting and managing your digital assets.
- Separating assets: Holding multiple cryptocurrency wallets will be particularly useful if you want to separate your assets and if the amount of money is different from one another.
Multiple wallets also are useful when you want to make independent investments.
- Security: One of the top advantages of holding multiple wallets is increased security. If you use coins to make daily purchases it is advisable to keep some coins stored in online or mobile wallets.
When dealing with large amounts it should be kept offline in a more secure place.
Do you need multiple wallets? No.
You might choose not to hold multiple wallets for the following reasons:
- Managing difficulty: When you hold several wallets it becomes hard for you to manage all of them. You should stick to a maximum of three wallets if you wish to avoid confusion and keep the assets well-controlled.
- Insufficiency of funds: When you have different wallets for each currency you may lack funds individually for making new transactions or purchases. Gathering the assets together in a single wallet will allow you with greater investment opportunities.
So it all boils down to the value of cryptocurrency purchases and sale strategies that you want to make. While some people look out for maximum security, others find it difficult to manage different wallets together. Therefore, you should choose to hold multiple cryptocurrency wallets based on your management skills and financial priority.