Bitcoin, Ethereum, Polkadot, Solana and other coins or tokens are digital assets. Online wallets, cryptocurrency accounts on trading exchanges and electronic payment systems are used to store them. It is easy to open an account, but some services require a KYC check (passport identity verification). Only an adult user will be able to create a vault in this case.
Cryptocurrency account options
Before opening a wallet, the user first needs to choose a way to store coins or tokens. There are 3 main options at his disposal:
- Cryptocurrency wallets. These are services that are initially created to provide users with the ability to store digital assets. They work with a connection to the blockchain.
- Cryptocurrency exchange accounts. They are created by users on the platform to deposit funds and then perform trading operations.
- Payment systems with support for cryptocurrencies. These are platforms like Payeer and PayPal that have started working with digital assets. The user can create a multi-currency account.
Wallets come in hot and cold. The second type includes vaults that work online directly with the blockchain. They come in 3 types:
- Web wallets. These work through services in the browser. Vaults that function as Chrome extensions are also popular.
- Desktop wallets. Creating such an account requires downloading software to your computer. They are more secure than web vaults, as the user stores cryptocurrency keys on his PC, not on the developer’s server.
- Mobile wallets. Run on a smartphone or tablet as apps. They need to be downloaded through the AppStore or Google Play mobile store. They are the most convenient for making transactions if there is no access to a computer.
Cold wallets are cryptocurrency accounts that operate on separate physical media. They are so called because of the lack of a constant connection to the internet and the blockchain. Cold vaults come in 2 types: hardware (digital devices like flash drives) and paper (a sheet of cryptocurrency keys).
Advantages and disadvantages
Different types of cryptocurrency accounts have pros and cons. They are presented in the table below.
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| Types of wallets | Advantages | Disadvantages |
|---|---|---|
| Cryptocurrency wallets | Most of the special vaults do not require the user to go through KYC. Multiple addresses can be created for the same name and email. They are light, simple and easy to use. | Through such cryptocurrency wallets, you cannot exchange one digital asset for another. Only a very small part of them have such a function. |
| Accounts on crypto exchanges | It is possible to instantly exchange some coins and tokens for others. Transactions take place in a fraction of a second, because information about them is not recorded in the blockchain. Hundreds of different assets are listed on some platforms. | Cryptocurrency exchanges are more centralized. Many of them require users to verify their identity. Only 1 wallet can be registered per name and email. |
| Payment systems with multi-currency accounts | You can store fiat and digital assets at the same time. Some payment systems provide an opportunity to issue a card. Some platforms work with third-party services. | Not all such crypto-accounts are convenient to use. A very small selection of coins and tokens for storage. |
Rating of the best cryptocurrency exchanges
If a participant in the market of digital assets decides to use a crypto account on a trading platform, you will first need to find a good site. This process can take a lot of time, so CryptoProGuide.com has prepared a rating of the best exchanges.
How to open a cryptocurrency account in 2024
Any user can create a wallet, although some services require verification. But even KYC is not difficult for beginners. It is enough to follow the instructions provided on the service or platform. Opening a cryptocurrency account is easy, but first the user needs to choose the type of storage that will meet personal needs.
Wallet
Such vaults are used more by people who need to save crypto assets for a long time. They are relevant for long-term investing – investing money for a period of 1 year or more. This is due to higher security, because in order to gain access to the wallet, you need to use a private key.
To register such a crypto account, you need to:
- Choose the service through which the wallet will be created.
- Go to the registration window.
- Fill out the proposed form.
- Confirm the registration with the help of a letter sent to the specified e-mail.
Some services require filling in personal information in the account settings or KYC. To increase anonymity, it is recommended to use web wallets that do not require verification.
Exchange
A crypto account on a trading platform is more suitable for traders and investors who invest in virtual money for a period of 1 to 12 months. To create a wallet on the exchange, you need to:
- Select a trading platform.
- Start registration of a new account.
- Fill out the form according to the fields.
- Confirm registration via e-mail.
- Verify the identity by passport.
Most platforms require customers to go through the KYC procedure to deposit and withdraw money. But there are anonymous and decentralized crypto exchanges. However, as a rule, transactions on them are slower.
Payment systems
Regular users of such services prefer to register wallets in them. It is simply more convenient for them to store all funds in one place. Also, some platforms work with exchanges or create their own. For example, on AdvCash you can buy assets through Binance.
To open a cryptocurrency account on such a service, you need to:
- Choose an electronic payment system.
- Register.
- Verify your identity.
Using payment systems is not an anonymous way to store digital money. For this purpose, it is better to register a wallet.
How to choose a way to store cryptocurrency
When choosing an option, you need to rely on personal requirements for the service or platform. For some participants of the cryptocurrency market it is more important to have fast access to trading, for others – to safely store virtual money. But services and exchanges can at least partially meet the requirements of all users.
The second main method is to consider platforms or cryptocurrency wallets from the point of view of the safety of funds. It is considered to be more reliable. This method is often used by investors who invest currency for several years. They can keep digital money in one account for years, so account security plays the most important role.
However, in practice, average members of the cryptocurrency community look for 7 qualities in vaults:
- Security.
- Convenience.
- Ability to deposit and cash out quickly.
- High speed of conversion from one cryptocurrency to another.
- Anonymity.
- The ability to exchange cryptocurrency and withdraw fiat to the card.
- Simplicity of registration.
Sometimes users neglect some qualities of the storage for the sake of others. However, the main ones remain security, anonymity and convenience.
How to work with a cryptocurrency account
Using a digital asset vault does not require skills. Many platforms and services have an intuitive interface. The ways of operating vaults are always different depending on the type. It is better to consider the example of popular trading cryptocurrency accounts.
To enter funds on exchanges, there is a Deposit tab. Here you can choose the method of replenishing the balance.
Buying and selling digital assets are carried out in the Exchange tab. A trading interface with cryptocurrency pairs and quotes of selected coins or tokens is always presented here. Trading is carried out in a window where you can specify the price and quantity of assets to be purchased. When trading positions are opened, funds from the cryptocurrency account are spent.
To withdraw fiat or digital money, the Withdrawal tab is used. On part of the exchanges there is a function of cashing out the account and transferring funds immediately to the card. But often for this service you have to pay a large commission. If the amount of the fee does not suit the client, he can use another way to withdraw money.
Is it possible to open a crypto account in a bank
In 2021, it is possible. However, only a few people managed to open a crypto account in a banking organization. More often they work only with very large projects. This is explained by the “floating” legislation in different countries regarding cryptoassets. They are practically not controlled or regulated by governments in any way.
Although banks in rare cases cooperate with large cryptocurrency projects, but it is very difficult to achieve this. The organization will scrutinize all technical features and internal procedures. Part of the banks report that they allow blocking or freezing of crypto account along with the funds of the project’s clients.
Other frequently asked questions
❓ Which type of crypto wallets is better than the others?
It is impossible to choose one objectively. Each type has its own advantages and disadvantages, so it is better to rely on personal requirements for the functions and parameters of the storage.
💰 Which type of wallet to choose?
In terms of convenience, you can choose, for example, web storage. They are used by most of the participants of the cryptocurrency market. However, other types of wallets may seem convenient for different people.
💻 How to create a hardware vault?
To do this, you first need to buy a physical digital device. For example, they are sold by cryptocurrency company Ledger for about $80.
✅ How to verify identity?
To pass KYC, you need to take a picture of the main spread of your passport or other document. Also, most exchanges require a new client to send selfies. The verification process takes 2-5 minutes.
🏢 Can I open an account on a decentralized exchange?
You can’t do so on DEX platforms, as any transactions take place on the principle of barter at the current exchange rate of crypto-assets. Decentralized exchanges allow users to exchange coins and tokens without intermediaries – on the platform, the trader looks for matches on buy/sell orders.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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