Is Storing Cryptocurrency Free? Bitcoin Wallet Basics


Bitcoin and other cryptocurrencies are stored in crypto wallets. Whether we’re talking about exchange or private wallets, the principle remains the same.

Private wallets provide services and, as such, they get paid in return. But let’s see where the cryptos are stored and how to cash out.

Is cryptocurrency storage free? Bitcoin wallet clients have to get paid somehow, after all. Here are some crypto wallet basics, with a focus on the payment side of things.

How Much Does Wallet Storage Cost?

Is there such a thing as a free Bitcoin wallet? In the vast majority of instances, installing a crypto wallet and storing cryptocurrencies on it costs nothing, whether we’re talking about exchange or private wallets. Exchanges provide trading, conversion, and various other services, which they have to get paid for in some way. On the other hand, private wallets give advanced security options and guarantee safe storage and a unique private key that’s only known to the user.

Crypto wallets are paid through fees. They charge for trades, currency exchange, and most transactions. For instance, exchanges typically calculate fees in two ways: either based on a 30-day trading volume per account, or as a per-trade flat fee.

The same goes for private wallets. They take a tiny percentage from the transactions that the user makes.

So, cryptocurrency wallet storage is typically free, but the transactions are paid.

Why Use a Wallet?

Seeing how the transactions are paid, maybe you don’t need to use a wallet in the first place. Can’t you just send cryptocurrency on your own? Well, to understand this, you need to be on the same page with crypto storage.

All the information regarding a user’s balance is stored within a wallet. The actual cryptocurrency is on the blockchain. Think of it like your fiat banking app –there is no money within the application itself, only the information regarding your balance and the instructions that prompt the bank to handle your money according to your preference.

Crypto wallets work in the same way, only instead of the bank, there’s the blockchain. Although you can get to your physical cash from a bank, the cryptocurrency on the blockchain isn’t physically accessible. The only way to store crypto information and perform transactions is via a medium –a crypto wallet service.

So, there is no answer to the question of why you should use a wallet because you don’t have another choice, whether we’re talking about a private or an exchange wallet.

Cashing Out Bitcoin Wallet

Unfortunately, you can’t sell Bitcoin or any other cryptocurrency whenever you please. First, you need to sell your crypto on an exchange and swap it for a fiat currency of your preference (and exchange’s availability).

The currency is then transferred to the user’s bank account, at which point adds up to your cash balance. Then, you can cash out regularly.

Keep in mind, though, that exchanges may take different amounts of time to transfer your crypto funds. Typically, the waiting period is between one and three days.

Should You Use a Private Wallet?

To turn Bitcoin (or any other crypto) into cash, you first need to exchange it for a fiat currency on a cryptocurrency exchange. Private wallets are only used for crypto information storage, so you’re going to have to wire the amount to exchange first, and then perform all other steps towards obtaining cash.

However, there are various reasons why the user might want to store their crypto balance info on a private wallet.

For one, you don’t have to use oneexchange for your trades and exchanges. You can think of your private wallet as your central balance hub, and send BTC and other cryptocurrencies to exchanges that offer the best deals at the moment.

More importantly, private wallets boast much better security measures than exchange wallets. The private key (where your balance information is stored) is only known to you and is unhackable, as long as you are the only one who knows the private key.

Crypto Wallet Storage Basics

In itself, storing cryptocurrencies in a wallet is completely free. You pay for most transactions that you make, but the amount here is far from hefty. Don’t refrain from storing cryptocurrency in a private wallet, either. It will provide an extra level of security for you, at minimal transaction fees.

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