Choosing Crypto Wallets – What to Look For and Think About
When buying crypto you need to open a crypto wallet to hold all your new assets.
Following is a guide covering some of the most popular wallets out there however before you start, ask yourself:
- Do you need a wallet that can hold several currencies? There are plenty of wallets that allow you to hold different cryptos.
- Do you plan on frequently trading? Some wallets make it easier for frequent traders, and others prioritize security and can be a hassle to frequently trade with.
- Do you want access to your wallet from anywhere at anytime, or only from one location? There is often an inverse-relationship between accessibility and security.
What to Look For in a Wallet
In broad strokes, there are generally four different wallet types:
- Hardware wallets: These wallets are physical wallets that have your private keys encrypted into them. These are the most secure type. Gringotts Wizarding Bank level. Hardware wallets allow you to keep your cryptocurrencies in “cold” storage—offline–so your coins are inaccessible to Internet hackers.
- Online wallets: These wallets exist online. Duh. While they are still considered extremely secure, the fact that they are connected to the Internet exposes you to a small amount of risk. You can use these wallets on a variety of devices.
- Desktop wallet: These wallets are downloaded and installed on your computer (PC or laptop). Once installed, only that specific computer can access the wallet.
- Paper wallets: These wallets are pieces of paper with your private keys on them. These are extremely risky because if you lose this piece of paper, the chance of accessing your coins in the future is extremely slim. Goodbye mulah. Additionally, most paper wallet generation sites are actually phishing sites preying on novice crypto traders. Paper wallets for Ethereum are particularly inadvisable since there is a substantial lack of good options.
When looking for a secure cryptocurrency wallet, keep an eye out for the following four features:
- Private keys: You want to have a private key that only you possess. This is essentially the keys to accessing your coins, and security here is non-negotiable.
- Development community: Look for an active development community that has a promising future.
- Simple user interface: Look for something that is easy to use. You also want to ensure that your wallet is compatible with different operating systems.
- Security and backup: Minimize your exposure to human error. Don’t be the person who makes the news for losing a million dollars in crypto by displacing their hardware wallet and forgetting to backup your information.
Save yourself the trouble and find a wallet that has the above four criteria.
TREZOR is a hardware wallet, meaning it holds your private keys offline. Originally invented for Bitcoin, users can now store Ethereum on TREZOR using the MyEtherWallet web interface.
Overall: TREZOR is an excellent choice because it is extremely secure, has an active development community, and allows users to store both Bitcoin and Ethereum. It costs around $99.
Ledger Nano S
The Ledger Nano S is one of the highest rated hardware wallets because it excels in the four criteria we mentioned before. The interface is very user friendly. It comes with a small OLED screen that makes controlling your transactions simple. Users can set a 4-digit pin on the physical wallet itself, which is an extra element added to prevent key logging.
Overall: the Ledger wallet functions exactly as you’d want it to. It keeps your bitcoins and Ethereum safe, it’s easy to access—but only for you, and is forgiving if your house burns down.
KeepKey supports Bitcoin, Litecoin, Dogecoin, Namecoin, Testnet, Ethereum, and Dash. This is a big deal for users that want to keep their altcoins off the grid.
Overall: KeepKey’s ability to store such a wide variety of altcoins is super appealing. It’s a bit larger that other hardware wallets, but isn’t much of an issue. The security is top notch, and that’s what matters.
The Exodus wallet is best described as a “Blockchain assets wallet” because you can store a variety of cryptocurrencies like Bitcoin, Litecoin, Dogecoin, Ethereum, and Dash. If you’re actively investing in altcoins, the Exodus wallet is very appealing.
Overall: While Exodus has a beautifully simple user interface, it’s important to remember that it is always connected to the Internet. This fact alone makes it slightly less secure than a hardware wallet. Though the risk is negligible, it’s still worth mentioning.
Coinbase, a web wallet, is the simplest and easiest to use compared to other options on this list. It is both an exchange and a wallet platform. You can buy Ethereum, Bitcoin, and Litecoin with fiat currency, and keep your cryptocurrencies secure.
Overall: The ease of use makes Coinbase a top option for many beginners. The only drawback is that users ultimately don’t have the same sort of control over their private keys as they would with a hardware wallet.
MyEtherWallet is an open-source web wallet that is different from Coinbase and other traditional web wallets in that you have full control of your private key on your computer. This means you can generate new wallets and store your ether without having to do it on MyEtherWallet servers. This also means you are fully responsible for safely backing up your wallet.
MyEtherWallet is great because it allows you to write and access smart contracts. It also connects with Trezor and Ledger Nano S to safely access your Ethereum within the MyEther platform.
Jaxx is a software wallet that supports many of the leading cryptocurrency coins including Ethereum. There’s also a hardware wallet coming soon.
Overall: With a clean interface and complete control over your wallet keys, Jaxx is a great option to store your cryptocurrency. The wallet has more security than a purely online option but has more vulnerabilities than a hardware wallet.
Mist is a hybrid desktop wallet with a web interface and is the official wallet listed on the Ethereum Project website. The product is still in beta, so there are issues that may arise when using it, though. To help with these problems, the development team provides a list of common issues and how to fix them on their Github wiki.
Mist protects your wallet with a password that can never be changed once it’s set. I highly recommend that you choose a strong password and don’t forget it. Write it down, memorize it, put it in a safe, etch it on the bottom of a table in the middle of a park – whatever you need to do to make sure you’ll remember it. If you lose this password, you’ll have no way to access your wallet.
With mist, you have complete anonymity. You can download and use the wallet without having to provide any personal information or identification. You also have complete control over your private keys which are held on whichever device you use to download the wallet.
Overall: As the official wallet of Ethereum, you can’t go wrong choosing Mist. Although other wallets exist with a better interface or more security (hardware wallets), this endorsement adds a significant amount of trust to the platform.
While Blockchain is far from the best option, we wanted to include it anyway. Our main beef with Blockchain is that all transactions need to be routed through the company’s servers, and they’ve gone through a disconcerting number of outages over the past years. If you’re equally uncomfortable with the thought of your account being inaccessible at any random time, you’ll probably want to pass on this one. Bitcoin, to many people, is about full control anywhere anytime. Blockchain seems like a step back.
Overall: For now, Blockchain.info is a good plan B but shouldn’t be your first choice. The security is top notch, but its lack of reliability and convenience raises red flags.
MetaMask is a browser extension that allows you to run Ethereum dApps directly in your browser without having to run a full Ethereum node. More than just a wallet, you can also interact with dApps and smart contracts on MetaMask.
Overall: MetaMask is another great option to store your Ethereum. As a bridge to the distributed web, the platform is ideal for people who are looking for a wallet with some additional features.
Airbitz is all about security. It’s decentralized, secured, and backed up. Neither Airbitz nor any other third party can access your coins. Airbitz offers you independence. It’s like a cool mom.
Airbitz is also active in the Bitcoin community and has a directory of businesses that accept bitcoin. The Airbitz user interface is also pretty easy to use, making it a top choice for beginners looking for an element of security.
MyCelium is popular among more intermediate Bitcoin users due to its robust advanced privacy and security features. It tends to be a bit tricky for beginners, but users appreciate its open source software program and transparency.
Perhaps the greatest highlight of the MyCelium wallet is that the advanced privacy features allow you to stay anonymous while the advanced security features keep your bitcoin safe. Unfortunately, MyCelium is only accessible via smartphone as there is no web or desktop interface.
Nothing is 100% secure. There are certain hardware and software wallets that are extremely close, but not perfect. The one thing that hardware and software devices can’t protect you from is human error. Human error includes forgetting your information, or falling prey to phishing attacks that scam you into sending bitcoins to a wrong address.
Wallets house your cash. They keep your hard-earned money safe. But they can only do so much. Make sure you are always super careful.