Creating a Cryptocurrency Wallet: A Complete Guide to All Types of Cryptocurrency Asset Storage

Key Points

• Diversity of crypto wallets: from simple custodial solutions to advanced hardware devices with varying levels of control and security.
• Control vs convenience: custodial wallets are easy to use but limit control over assets; non-custodial wallets provide full autonomy but require responsible key management.
• Security first: hardware wallets provide maximum protection against cyber threats and hacking attacks.
• Web3 solutions: modern crypto wallets based on MPC technology combine the advantages of security and ease of use

Introduction to the World of Crypto Wallets

To enter the world of cryptocurrency, the first essential tool becomes a cryptocurrency wallet. It is not just a place to store digital assets — it is a multifunctional tool for sending, receiving, and managing cryptocurrencies. Each type of wallet has unique characteristics, offering a different balance between security, functionality, and ease of use.

Understanding the features of different types of wallets will help you choose the optimal solution that meets your needs in the world of digital assets.

Custodial Wallets: Simplicity for Beginners

Custodial ( or hosted ) wallets are solutions where the cryptocurrency exchange or specialized service takes on the responsibility of storing your private keys. This means that control over your assets is partially delegated to a third party.

Advantages of custodial solutions:

• Ease of access recovery in case of password loss
• Minimum technical requirements for the user
• The absence of the need to manage keys independently
• Integrated exchange and trading features

Step-by-step setup of a custodial wallet

1. Choosing a Reliable Platform: Prefer regulated exchanges with an impeccable reputation and compliance with local laws.

2. Account Registration: create an account using a working email and a secure password ( it is recommended to use a password manager )

3. Verification process: complete the KYC procedure (know your customer), required to comply with regulatory requirements.

4. Account Top-Up: connect a convenient payment method to deposit fiat funds or transfer cryptocurrency from another wallet

5. Getting Started: after topping up your balance, you can trade, invest, and manage your crypto assets.

Suitable for: cryptocurrency beginners, users who prefer the convenience of security, active traders who do not wish to deal with the technical side of key storage.

Non-custodial wallets: full control in your hands

Non-custodial ( or self-custody ) wallets represent an opposite approach, where only the owner has full control over the private keys and funds. Technologically, this means that no third party has access to your crypto assets.

Features of non-custodial solutions:

• Full autonomy and control over crypto assets
• Independence from the state of the exchange servers
• Direct interaction with blockchain protocols
• Increased responsibility for the safekeeping of keys

Creating a non-custodial wallet

1. Installing a trusted application: download the crypto wallet from official sources — App Store, Google Play, or the official website of the developer (, for example, MetaMask or Trust Wallet ).

2. Creating a New Wallet: launch the application and select the option to create a wallet (without importing an existing one)

3. Security Settings: create a strong password to protect access to the application, enable biometric protection if available.

4. Saving the seed phrase: write down the provided seed phrase (12 or 24 words ) on a physical medium and store it in a safe place — this is critical for restoring access.

5. Wallet Replenishment: transfer cryptocurrency from the exchange or use built-in services to purchase cryptocurrency with a card or bank transfer.

Important: When using non-custodial wallets, be especially cautious when connecting to DApps and Web3 services. Connect only to verified projects, use different wallets for different purposes, and do not keep all your funds in one wallet.

Suitable for: users with an average level of technical skills, Web3 and DeFi enthusiasts who value privacy and independence from central structures.

Innovative Solutions: MPC Technologies for Web3

MPC wallets ( Multi-Party Computation ) represent a new generation of cryptocurrency wallets that combine the security advantages of non-custodial solutions with the usability of custodial ones.

The MPC technology distributes parts of the private key among multiple participants, making the storage of cryptocurrency more secure and convenient at the same time. In the case of Web3 wallets based on this technology, users do not need to worry about storing seed phrases.

Setting up a Web3 wallet on MPC technology

1. Login to Account: log into your account on the platform and go to the wallet section

2. Creating a wallet: click the wallet creation button and follow the instructions — the system will automatically create and distribute three "key shares" to different storage locations.

3. Backup: set up a recovery password that will protect the private keys.

4. Activation: after completing the setup, your Web3 wallet is ready for use — you can interact with DApps, stake assets, and manage your portfolio.

Advantages of MPC wallets:

• No need to store the seed phrase
• Enhanced security through key distribution
• Availability of professional support
• The combination of control and ease of use

Suitable for: progressive users seeking a balance between security and convenience, users of DeFi and Web3 services, as well as those who value accessible technical support.

Hardware Wallets: Maximum Security

Hardware wallets are physical devices specifically designed for the secure storage of cryptocurrency keys in offline mode. Brands like Ledger and Trezor offer solutions that protect against most known cyber threats.

Features of Hardware Wallets:

• Private keys never leave the device
• Protection against malware and phishing attacks
• Physical factor of transaction confirmation
• The ability to store multiple cryptocurrencies

Setting up a hardware wallet

1. Acquisition of the device: purchase a hardware wallet from Ledger, Trezor, or another trusted manufacturer only from the official website or an authorized distributor.

2. Installation of accompanying software: download the official application for managing wallet (, for example, Ledger Live or Trezor Suite )

3. Connection and Initialization: connect the device to the computer and follow the setup instructions.

4. Creating a PIN code: set a strong PIN to protect physical access to the device

5. Saving the recovery phrase: write down the generated recovery phrase (usually 24 words) and keep it in several safe places.

Suitable for: long-term investors with substantial crypto assets, users with high security requirements, technically savvy cryptocurrency enthusiasts.

How to choose the right wallet?

When choosing a cryptocurrency wallet, it is important to consider several key factors:

• Security vs convenience: the higher the security, the more difficult the usage usually is.
• Usage Goals: active trading, long-term storage, or interaction with DeFi
• Technical skills: some solutions require a deeper understanding of cryptocurrency technologies.
• Asset Volume: hardware solutions are recommended for significant amounts.
• Cryptocurrency Support: not all wallets support all existing coins and tokens.

Security First

Regardless of the type of wallet chosen, follow these security principles:

• Regularly update your wallet software
• Use two-factor authentication wherever possible
• Do not store all assets in one place
• Be cautious with suspicious links and connection requests
• Check recipient addresses before sending cryptocurrency
• Use strong passwords and never share your private keys

The correct choice of a cryptocurrency wallet and adherence to basic security principles is the foundation of successful and safe interaction with the world of cryptocurrencies and Web3.