A crypto wallet is the software or application that allows you to store the private keys by which you can interact with the blockchain to receive, send and store digital assets like Bitcoin, Ethereum and many others.
How you choose one wallet over the other depends on several factors that might be specific to an individual or particular cryptocurrency. While most people would go for the best hardware wallet, others search for the best multicurrency wallet or a combination that works for them.
Overall, whether you choose one crypto wallet over the other largely depends on a few considerations we highlight below.
Here are the different crypto wallet types currently available in the market.
Hardware wallets offer offline storage of crypto assets, and are the safest because your private keys never interact with the internet- a harbinger of hackings.
Two popular examples:
TREZOR is a top-notch hardware wallet designed with Hierarchical deterministic (HD wallet) capability. It comes with a USB cable and features a built-in display unit for ease of access. There are two models: the TREZOR One and TREZOR Model T.
The wallet securely stores more than 1,000 cryptocurrencies; all secured with advanced security features like 2FA, SSH protocol and GNU Privacy Guard (GPG) encryption. You can also easily restore your accounts with a passphrase seed.
The hardware wallet comes at a cost though, with prices currently starting at $55.00 for Trezor One and $149.00 for Trezor Model T.
Ledger Nano S is a leading hardware wallet from Ledger. The flagship product is a bit pricey, but compares favorably to Ledger’s Nano X and Ledger Blue models.
This wallet has a user-friendly OLED screen and offline storage of private keys to multiple cryptocurrencies. It also comes loaded with numerous top-notch security features, including a security PIN and 24-word recovery phrase. It also integrates with software wallets like Mycelium and Electrum.
A desktop wallet is one that you can only access on a private computer, with no private keys accessible on third party websites. So unlike mobile or web wallets, they offer greater security for stored digital assets. However, malware can compromise your machine and steal your funds. One also needs to guard against damage or loss of the PC as that could mean loss of private keys and thus stored assets.
Top desktop wallets include:
Exodus is an advanced desktop wallet that provides for offline storage of multiple cryptocurrencies. ShapeShift integration and the cross-platform support for Windows, Mac and Linux add to the advantages of using this wallet app.
You can use Exodus for free, with all crypto information securely stored on your computer.
Jaxx is a popular desktop crypto wallet also available for web browsers as well as on mobile. It’s easy to use and offers integration with top platforms for convenient trading. Wallet backup is by mnemonic seed.
Electrum is a favorite of many within the crypto space, with its secure desktop features advanced by the integration with hardware wallets such as Ledger Nano S and Trezor. Electrum is also Multi-Sig enabled, with transaction anonymity enhanced via Tor.
A mobile wallet is a crypto wallet app designed for mobile devices and comes with built-in security, including the use of two step verification. Although much more secure than online platforms, connecting to the internet or cases of unauthorized access can compromise safety of funds.
The most popular mobile wallets are:
Mycelium offers bank-grade security for the storage of multiple crypto assets. Apart from its use on Android and iOS devices, the wallet can integrate with hardware wallets such as Trezor and Ledger.
Coinomi is a non-custodial multi-currency wallet that currently ranks as one of the best mobile wallets. The wallet has SegWit support and integrates with several exchanges. One big selling point for Coinomi is its high security, utilizing strong encryption, Hierarchical Deterministic (HD) logic and passphrase to ensure private keys remain secure 24/7. This user-friendly wallet app also supports cross platform access (on desktop) and is DeFi ready.
Web wallets are those offered by online platforms and crypto exchanges. The wallets also offer mobile support for Android and iOS, with inbuilt security features. While they offer convenience, one needs to note that nefarious actors find it easy to target funds sent into hot wallets on web platforms. One should always endeavor to move funds into offline storage to avoid prolonged exposure.
Top web wallets are:
Coinbase offers the best web-based wallet, with its mobile additions also providing top-tier access to crypto storage. The web wallet features a beginner-friendly user interface for quick navigation, with 2FA and Google Authenticator. Apart from the account security features, the wallet keeps 99% of user funds in cold storage. What’s more, all funds on Coinbase are protected by insurance, meaning users have protection if hackers manage to breach the security levels.
Metamask is one of the most popular and widely used cryptocurrency wallets for the Ethereum blockchain. It is an open source crypto wallet, embedded with Hierarchical deterministic logic. Unlike some web wallets, MetaMask does not store user’s wallet details.
Paper wallets allow for the offline storage of private keys to your funds. If you want a free but more secure way of storing your digital assets, then a paper wallet off that privacy. MyEtherWallet.com offers an easy way to generate a paper wallet for offline use, with the security of the private keys dependent on how safe the wallet is. You can for instance note down the keys and keep it in a vault or other safe place.
When looking to securely store digital assets, the main consideration is always to find the best wallet for that purpose. But with so many different crypto wallet apps in the market today, it is often a case of comparing different products.
That explains the need to understand the difference between hardware, mobile, desktop, web and paper wallets.
In simple terms, knowledge and proper due diligence around this topic could make a huge difference on how safe your funds are in an age where accelerated adoption of cryptocurrencies and the underlying blockchain technology has also acted as the harbinger of sophisticated attacks from malicious actors.