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Cryptocurrency

7 min

Creating a crypto wallet – here's how

If you want to securely store cryptocurrencies like Bitcoin or Ethereum, you’ll need a suitable wallet. But before you can create a crypto wallet, you should know which type of wallet is best suited to you. The main differences lie in security, access and functionality. This guide explains what to look for when choosing a provider and how to create your own crypto wallet step by step – with a focus on security and ease of use.

If you want to create a crypto wallet for cryptocurrencies like Bitcoin or Ethereum, you should first choose the right type of wallet.
When selecting a provider, security, regulation and support for different cryptocurrencies are important.
After setting up the wallet, you must securely store login data such as the seed phrase.
A test transaction helps verify the wallet's functionality and ensure access.

Your own crypto wallet – but which one?

Before you can create your own crypto wallet for your cryptocurrency, you should understand which type of wallet best meets your needs. Not every wallet works the same way. The differences lie mainly in security, access and how the wallet interacts with the blockchain and processes transactions.

There are essentially three main types: hosted wallets (custodial wallets), self-custodial wallets (self-managed storage) and hardware wallets (physical wallet devices). Each type has its own advantages and disadvantages. The right wallet for you depends on whether you prioritise ease of use or maximum security.

Is it free to create a crypto wallet?

Yes, in most cases you can create a crypto wallet for free. Software wallets for desktop or smartphone are usually free, as are hosted wallets from crypto exchanges. However, you’ll need to buy a device for a hardware wallet, as it is physically produced and offers higher security.

Creating a crypto wallet: what to look for in your provider

Before you can create a wallet for cryptocurrencies like Bitcoin or Ethereum, choosing the right provider is crucial. Not every wallet offers the same security standards or functions. Whether you want to create a wallet that you control entirely or just want to open a simple wallet, the right choice depends on your individual needs. To protect your coins in the best possible way, you should consider the following criteria:

Security and key protection: the most important factor in a wallet is security, so make sure the provider uses modern encryption technologies and gives you full control over your keys, especially with a self-custodial wallet.
Regulation and trustworthiness: if you want to use a hosted wallet, check whether the provider is trustworthy and licensed, and offers security features like two-factor authentication (2FA), because only reputable platforms guarantee secure storage of your cryptocurrencies.
Compatibility with different cryptocurrencies: not every wallet supports all cryptocurrencies and if you want to manage not only Bitcoin but also Ethereum or other coins, you should choose a wallet that supports multiple assets.
Backup and recovery options: the best wallet is useless if you lose access, so good providers allow you to create a seed phrase (a sequence of 12 to 24 words that can restore your wallet) or a backup to recover your wallet address and access in an emergency.
Ease of use and accessibility: check whether the wallet has a user-friendly interface and whether you can access it from different devices, because creating a wallet should be easy and intuitive, especially for beginners.

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How to create a wallet for cryptocurrencies

If you want to create a crypto wallet, you should follow a few important steps. Choosing the right wallet type, securing login data and testing the wallet are essential to store cryptocurrencies safely and access them at any time. A wallet is the central tool for interacting with the blockchain and carrying out transactions.

Choosing a wallet type

The first step in creating a crypto wallet is choosing the right wallet type. Depending on your security needs, planned use and desired access, there are different options. A hosted wallet offers quick access, a self-custodial wallet more control and a hardware wallet maximum security.

Hosted wallet (custodial wallet)

easy setup without technical knowledge
access from anywhere with an internet connection
drawback: no full control over private keys

Self-custodial wallet (self-managed storage)

full control over the coins
no reliance on an exchange or provider
drawback: own responsibility for secure key storage

Hardware wallet

highest security, as offline
protection from malware and phishing
drawback: purchase cost for the device

Choosing a provider

Choosing the right provider is crucial to create a secure and user-friendly crypto wallet. Alongside security features, regulation, compatibility and usability also play a key role. Requirements vary depending on how you plan to use the wallet. While beginners value easy setup, active traders need a wallet with fast transaction options and advanced features.

If you want to open a wallet, you should carefully compare providers and choose a solution that combines security and functionality.

Security: modern encryption, two-factor authentication (2FA) and control over private keys are important; beginners should focus on simple protections, while active traders need advanced security features.
Regulation: a reputable provider is subject to legal regulations, which helps beginners, while experienced traders should ensure that large transaction volumes are also handled securely.
Compatibility: a wallet should support Bitcoin, Ethereum and other cryptocurrencies; beginners usually start with a few assets, while traders need a wide selection and connections to external platforms.
User-friendliness: an easy-to-understand interface makes it easier for beginners to get started, while experienced traders should expect features like fast transaction confirmations and customisable settings.
Backup options: a seed phrase is essential for recovery, but experienced traders should have multiple backup options to ensure quick access.

Creating the wallet

Once you've chosen a wallet type and provider, you can create your crypto wallet. The setup process differs depending on the type of wallet, but generally follows the same basic steps.

Step 1: Set up wallet software or hardware wallet

Depending on your chosen wallet type, you can download software wallets as desktop or mobile apps or set up a hardware wallet. Hosted wallets are usually created directly via an exchange or provider.

Step 2: Create wallet address and generate private keys

When setting up the wallet, a wallet address is automatically created to receive transactions. You also receive your private keys, which secure access to your cryptocurrencies.

Step 3: Receive and securely store the seed phrase

The seed phrase allows the wallet to be restored in case of loss or on a new device. It should be stored offline and never shared with others.

Step 4: Secure login details

In addition to the seed phrase, passwords or PINs should also be securely stored. If the provider offers two-factor authentication (2FA), it’s advisable to activate it.

Creating a crypto wallet is just the first step. It’s just as important to securely store your login details. Once you've created a wallet address, make sure your private keys, passwords and recovery data are protected. Without this information, you’ll lose access to your cryptocurrencies permanently.

Write down your seed phrase offline and store it safely, preferably on paper or a dedicated backup device. Avoid digital storage, as a screenshot or cloud storage poses a security risk. Your private keys should also not be stored on an internet-connected device. Instead, you can store them on a hardware wallet or a separate data medium to reduce the risk of loss or unauthorised access.

Additional protection measures help make your wallet even more secure. Create a strong, unique password and activate two-factor authentication (2FA) if possible. It’s worth regularly checking whether your provider offers new security features to best protect your wallet for cryptocurrencies.

Testing the wallet

Before using your wallet actively, you should test its functionality. This ensures that transactions run smoothly and your cryptocurrencies are always accessible. A quick check helps detect potential errors early and avoid future problems.

A simple method is to make a test transaction with a small amount. Send a small amount of Bitcoin, Ethereum or another cryptocurrency to your own wallet address. Then check whether the transaction is correctly displayed on the blockchain and the amount arrives in the wallet. If you're using a self-custodial wallet, it’s worth testing the recovery too. Enter the seed phrase on another device to verify that access to the wallet can be restored without problems. Also familiarise yourself with the user interface. If you're creating a wallet for cryptocurrencies, you should know how to send and receive coins and how to use security features.

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Differences in wallet setup depending on the type

The setup process varies depending on the type of wallet. We’ve outlined the most important differences so you can make the best choice for your needs.

Hosted wallet:

registration with a crypto exchange or provider
wallet is created automatically
no protection of private keys required, as the provider manages them

Self-custodial wallet:

download wallet software as a desktop or mobile app
create wallet address and generate private keys
securely store the seed phrase

Hardware wallet:

connect and set up the device
create wallet address and store private keys offline
write down and securely store the seed phrase

Now you know the key steps to create a crypto wallet, securely store your login data and test the wallet. This means you're well prepared to manage your cryptocurrencies safely.