Is it safe to own multiple cryptocurrencies?

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19/07/2022, 5438 characters

Cryptocurrencies have emerged in recent years and become a real trend. Currencies are becoming increasingly important, especially in online trading, while more and more companies are accepting them as a payment method. Even at online casinos, you can sometimes make deposits with cryptocurrencies. If you want to get into the online gambling sector, here is an interesting address: icecasino.com/de.

As the value of cryptocurrencies has increased markedly in the past, security obviously plays an increasingly important role. An interesting aspect is whether you use a single eWallet for your coins, or whether you prefer to share your credit on multiple digital wallets. Here we review the benefits and risks of using multiple crypto wallets.

Why not just use a purse?

Of course, if you only use a single eWallet for all your coins and tokens, it’s easier to manage than if you distribute your balance across different wallets. However, there are also disadvantages to it. Cryptocurrencies are stored decentrally and only those who have access to the keys can identify themselves as the owner. If you store all your coins in a single wallet and then lose access to it, then the money is gone too. There is no way to recover lost cryptocurrencies via blockchain, and eWallet passwords usually cannot be changed if forgotten.

Anonymity is a key reason why cryptocurrencies have become so popular over the last few years. Investors in particular like to take advantage of this aspect to execute transactions without being recognized. However, if you only own a single wallet, this can attract unwanted attention. Since one can see the purses, if not who they belong to, it has happened that particularly valuable purses have emerged in the public eye. As a result, a digital wallet can also become an interesting target for hackers. If you only own a few coins and tokens, this risk is negligible, but if you have large amounts, it is better to play it safe.

Use multiple cryptocurrencies to minimize the risk

If you distribute your coins across multiple wallets, they are less attractive to criminals who want to gain access through hacking. In addition, it is much harder to understand what digital assets you have. Another reason to consider owning multiple wallets is that the risk of forgetting the access keys has less dramatic consequences.

If you have a single wallet, you will also lose your entire crypto balance if you forget to access it or if a third party gains access. If you share your coins and tokens on multiple wallets, at least you will not lose everything if you can no longer use one of them.

Many eWallets are free. So you do not take any real risk or have to invest anything if you want more of them. Nevertheless, one should of course familiarize oneself thoroughly with the situation of the various providers.

Crypto wallet provider in focus

To give an overview of the eWallet providers, we have compiled a list here. Some basic information about each wallet is also provided:

  • Coinbase: This free wallet is a so-called hot storage wallet. Supported coins include Bitcoin, Ethereum, Dogecoin and many more cryptocurrencies. Handling is very easy, so even beginners in digital currencies can quickly find their way around.
  • Binance: This wallet is also a so-called hot wallet. In addition, it is free, so there is no risk if you want to try it. Unfortunately, Binance only supports Bitcoin and Ethereum, so if you have other cryptocurrencies, use other providers.
  • Crypto.com: Another free hot wallet is Crypto.com. Here you can store Bitcoin and Ethereum and Litecoin, Dogecoin and many other digital currencies. You also have the option to specify that you want to keep your coins for a certain period of time when you cannot use them. For this you get interest for this period, which can amount to up to 14.5%.
  • Ledger Nano X: This is a cold wallet that you can not get for free either. Ledger Nano X is a hardware wallet, so you have a physical data carrier on which the keys are stored. So the security is extremely high. You can also easily connect to the system using Bluetooth or a USB-C cable.
  • ZenGo: This wallet is free. It is a so-called non-deposit wallet, in which more than 70 different coins can be stored. Although this is a smaller sample than some other wallets, the major cryptocurrencies, particularly Bitcoin and Ethereum, are represented.

Which crypto wallet you choose depends on your own requirements. However, there is some harm in using several free eWallets side by side.

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