Crypto wallets enable you to send and receive cryptocurrencies like Bitcoin and Ethereum by keeping your private keys, which are the passwords that grant you access to your funds, safe and easily accessible.
Technically, a crypto wallet does not keep your cryptocurrency, in contrast to a regular wallet that can hold real cash. Although your holdings are live on the blockchain, only a private key can be used to access them. Your keys let you conduct transactions and serve as proof that you are the owner of your digital currency.
In this article we will learn what a cryptocurrency wallet is, the difference between hot wallets vs cold wallets, and dive into some of the best crypto wallet apps out there.
What is a crypto wallet?
An application that serves as a wallet for your cryptocurrency is called a crypto wallet. Because it functions similarly to a wallet in which you store cash and credit cards, it is called a wallet. It provides the interface that enables you to access your cryptocurrency and stores the passkeys you use to sign for transactions, in place of these tangible objects.
Everyone can access the blockchain thanks to contemporary blockchain wallets. Sending cryptocurrency was a laborious process that required entering lengthy keys when it was initially released. Nowadays, most of it is done for you by the software.
Satoshi Nakamoto, the creator of Bitcoin (BTC), had the first wallet. Hal Finney, who supposedly ran the BTC client software wallet initially and corresponded with Nakamoto, owned the second wallet. The cryptocurrency frenzy started when Nakamoto sent him ten BTC as a test.
Almost all crypto wallets have their dedicated cryptocurrency wallet app which users can use to store and withdraw crypto from online crypto exchanges.
Now that we know what cryptocurrency wallets are, let’s dive into the key difference between a cold crypto wallet and a hot wallet.
Types of crypto wallets: Hot wallets vs cold wallets
Hot and cold wallets are the two primary varieties of cryptocurrency wallets. Let’s discuss them one by one.
What is a hot wallet?
A third party hosts hot wallets, also known as online or custodial wallets, and keeps your keys on their behalf. These types of wallets might offer enterprise-level data security solutions that companies utilize to protect and preserve their data. Customers of certain crypto exchanges can access hot wallets.
Applications for PCs and mobile devices are included in hot wallets. These wallets can access your cryptocurrency, conduct transactions, show your balance, and do a lot more. They can be installed on a desktop or laptop computer. If you’re using a wallet created by a cryptocurrency exchange, some software wallets can come with extra features like exchange integration.
What is a cold wallet?
Cold wallets or non-custodial wallets are ones where you are in charge of keeping your keys safe. The majority of crypto hardware wallets are cold wallets and considered a safer option than online wallets for obvious reasons.
Since you can store and retrieve your private keys from your device, crypto cold wallets are the most widely used kind of wallet. These gadgets may seem like USB drives, and contemporary hardware wallets come with a number of functionalities.
By connecting the hardware wallets for crypto to your computer or smartphone, you can conduct cryptocurrency transactions. The majority of them have the capacity to instantly sign cryptocurrency transactions without you having to enter the key, preventing hackers from recording your screen or logging your keystrokes.
Now that we have identified the key differences between hot and cold wallets, let’s answer the most important question: what are the best wallets for cryptocurrency?
What is the best crypto wallet?
Since the inception of crypto wallets, hundreds of wallets have flooded the market and it can be difficult to identify the right one. We make it easy for you and here we list the top five cryptocurrency hardware wallets.
1. Trezor
Trezor is a leader in hardware wallets, including devices such the Model One and Safe 5. These gadgets are well-liked by cryptocurrency aficionados because of their security, intuitive UI, and compatibility for a wide range of coins.
Trezor lacks native staking and NFT administration, but it does include a touch screen for completely on-device entry and extremely safe offline storage. Additionally, it lacks a Bluetooth connection.
Some of the best hardware for crypto storing is offered from Trezor. The Tezor Model One, its entry-level model, costs about $49, but it also offers a more costly variant with a touch screen (it cost $169 at the last update).
Trezor offers built-in services like staking and cryptocurrency purchases through its software packages, but it also integrates with other cryptocurrency companies like Exodus. It offers both a desktop version and a mobile app (Trezor Suite Lite) for Android and Apple.
2. Exodus
Since its 2016 launch, Exodus, a non-custodial wallet that accepts several cryptocurrencies, including Bitcoin, has created a lot of excitement.
It is a beautifully designed wallet that is full of features, including the ability to exchange cryptocurrencies within the wallet and the opportunity to stake assets directly within the wallet to generate passive income. Thousands of assets are supported by the Exodus wallet, and users can exchange over 100 supported digital currencies with their rapid exchange integration function, which keeps the coins safe and secure inside their own wallet.
As a response to user requests for two-factor authentication and enhanced security, Exodus has partnered with and integrated with the Trezor hardware wallet, offering users the convenience, functionality, and user interface of the Exodus software wallet with the security and peace of mind of a hardware wallet. The Exodus wallet itself is accessible with a secure password, which should be adequate for the majority of users.
3. Ledger
One of the most well-known brands in cryptocurrency wallets is Ledger. Ledger can interact with several well-known software wallets, including Crypto.com and Guarda, and its costs range from around $79 to $249.
Ledger offers a separate desktop client, a browser plugin, and a well-reviewed mobile app. Additionally, Ledger offers two-factor authentication and a user education library.
Over 5,500 assets can be supported by both Ledger wallet versions. They also give users access to decentralized finance programs, or dapps; however, non-fungible token, or NFT, management is no longer supported by the Nano Ledger S. With Ledger’s integrated desktop and mobile apps, you can buy, stake and swap currencies.
Ledger Live software is open source, but the device firmware is not, and Ledger devices provide multisignature security with Coinkite integration and two-factor authentication.
4. SafePal
Established in 2018, SafePal provides both novices and seasoned cryptocurrency experts with a full range of safe crypto management solutions. Additionally, Binance Labs, Binance’s startup capital division, made its first hardware wallet investment with its S1 wallet. With its distinctive hardware wallets, software wallets, and browser extension wallet product lines, SafePal currently provides services to over seven million consumers worldwide.
The SafePal app is used to pair and manage these, allowing users to conveniently store, manage, trade, and swap their assets. SafePal supports more than 100 blockchains (EVM and non-EVM) and 16 languages as of this writing, with more being added all the time. SafePal’s long-term goal is to enable investors to pursue financial independence and opportunity in the decentralized world.
The S1 hardware wallet is going for $49.99 which is a decent price for a crypto hardware wallet with a digital interface and an acceptable amount of features as well.
5. KeepKey
Since ShapeShift purchased KeepKey in 2017, its most popular product has been an offline wallet that helps keep your cryptocurrency safe from hackers. But KeepKey became an independent entity after ShapeShift became a DAO. ShapeShift and KeepKey, one of the numerous dApps that may be linked to the wallet, are still cooperating, though.
Because KeepKey’s code is open-source, anyone may examine how the application is constructed, ensuring user safety and fostering confidence.
Speaking about the wallet itself, KeepKey has significantly reduced its pricing when it was selling for $239 and now when it costs around $50, at the time of writing.
What is the best crypto mobile wallet?
While hardware wallets may be a safer option, they aren’t the most accessible, as most of them don’t have an online user-friendly interface. This is where hot wallets come to save the day, as all of them have an easy-to-use application which anyone can use to store and withdraw cryptocurrencies through their phone. Let’s dive right into some of the best ones.
1. Coinbase Wallet
Coinbase, a well-known cryptocurrency exchange with headquarters in the US, created Coinbase Wallet, a self-custody cryptocurrency wallet. Coinbase Wallet offers consumers exclusive control over their funds and private keys, in contrast to the custodial wallets offered by exchanges.
This decentralized wallet is intended for managing NFTs (non-fungible tokens), storing cryptocurrency, and communicating with decentralized apps (dApps).
Numerous cryptocurrencies are supported by Coinbase Wallet, including well-known choices like BTC, Ethereum (ETH), Litecoin, and ERC-20 tokens. Additionally, it enables users to store NFTs on blockchains like Polygon and ETH.
Users may transfer, receive, and manage cryptocurrency assets with ease because of the wallet’s user-friendly interface. Beginners are drawn to the simple interface, and more seasoned users are pleased by its powerful capabilities.
Since the wallet employs non-custodial technology, the private keys are solely accessible by the user. These keys are kept locally on your device and are encrypted. Coinbase Wallet offers biometric verification, such fingerprint or face recognition, for further security, making it harder for unauthorized users to access your money. A 12-word recovery phrase is provided by Coinbase Wallet and has to be kept safe. In the event that your gadget is lost or hacked, this phrase is crucial to getting your wallet back.
2. Metamask
Popular and well-known, MetaMask is a browser extension that links to the Ethereum blockchain and serves as a cryptocurrency wallet. Without downloading the complete blockchain on their device, users can engage with the Ethereum ecosystem—which is home to an extensive collection of decentralized applications (Dapps)—by using MetaMask. As a result, it’s among the greatest Ethereum wallet options for convenient access to gaming platforms, gambling websites, decentralized exchanges (DEX), and numerous other apps.
The most popular browsers, including Chrome, Firefox, Brave, and Microsoft Edge, are compatible with the wallet. In addition to ETH, the native currency of Ethereum, MetaMask also stores tokens based on the ERC-20 and ERC-721 specifications of the protocol.
3. Trust Wallet
For mobile users, Trust Wallet is a safe and open-source cryptocurrency wallet. It was purchased by Binance in 2018 and supports a wide range of blockchain networks and currencies, mostly based on Ethereum and other chains that are compatible with EVM. The wallet makes it easy for both new and experienced cryptocurrency users to transmit, receive, store, and stake their holdings.
Trust Wallet provides high-security guarantees since private keys are kept locally rather than on a server. Its straightforward layout allows novices to use it, while professionals can access its more sophisticated capabilities. A single wallet can be used to manage a wide variety of tokens.
The downsides include the lack of desktop interface, as users who prefer desktop interfaces will find it less accessible because it is a wallet designed primarily for mobile devices. Also, Trust Wallet, like the majority of mobile wallets, needs an online connection in order to conduct transactions as it’s not a hard wallet as discussed before in this article.
4. Phantom Wallet
Phantom is a browser plugin and non-custodial wallet that can connect with digital apps and smart contracts as well as manage digital assets. Non-custodial means that you retain possession of a few pieces of confidential information, rather than having your assets in a central repository.
Similar to how you must protect your physical wallet or purse from pickpockets when you’re out and about, you are responsible for keeping the assets in your Phantom wallet safe, unlike when you keep your nation’s currency in a bank account.
Avoid asking for assistance with your Phantom Wallet on open-source programs like X, as some users will pose as members of the wallet’s support staff and try to con you. For answers to your questions, consult Phantom’s own documentation and help files. If you still require assistance, visit their website for support. Keep in mind that no one from Phantom will ever request your private keys or seed phrase!
5. Zengo Wallet
Multi-party computation (MPC) technology is used by the self-custodial Zengo wallet to protect user accounts. Since its launch in 2019, it has never been compromised and is built to be safe by default, protecting the assets of more than a million users.
Face recognition, threshold key signatures, and three-factor authentication are some of Zengo’s security features. In addition to offering a recovery mechanism that eliminates the possibility of a single point of failure, the wallet’s MPC technology guarantees that the user’s funds are nearly impossible to hack.
Perhaps best of all, the Zengo wallet is totally free and accessible on both iOS and Android! Although they do have a subscription service called Zengo Pro, most users will find Zengo Essentials, which is free, to be more than enough.
In addition to tokens and NFTs on the ETH and Polygon (POL) networks, the Zengo wallet supports more than 1,000 assets, including majors like BTC, ETH, BNB, Dogecoin, Tezos, and stablecoins. Zengo may be used to purchase, sell, and exchange assets right from within the wallet in addition to being a good option for asset storage.
Conclusion: Choosing the right crypto wallet for your needs
Understanding what is a wallet in cryptocurrency is crucial for managing your digital assets securely and efficiently. Whether you’re just starting your crypto journey or you’re an experienced investor, selecting the right wallet is essential to protect your assets.
If you’re looking for a hardware wallet, devices like the Trezor wallet and Exodus wallet are highly regarded for their security features and ease of use. Trezor, for example, is considered one of the best crypto wallets for cold storage, providing offline protection of your private keys. On the other hand, Exodus wallet combines functionality with user-friendliness, allowing you to manage multiple cryptocurrencies with ease, and even stake assets for passive income.
For those looking to explore the world of decentralized finance, a DeFi wallet such as Zengo wallet offers robust security features, including face recognition and MPC technology, ensuring your funds are safe.
In conclusion, always ensure that your wallet of choice aligns with your investment strategy, provides the security features you need, and supports the cryptocurrencies you intend to use. Whether you’re looking for the best wallet for crypto or exploring the diverse world of DeFi wallets, the right tool can help you navigate the crypto landscape with confidence.
