Crypto prices go up, crypto prices go down. Although one thing is becoming more certain, cryptocurrency is here to stay. If you are going to be using crypto today or any time in the future one thing that you will need is a wallet.
Much like a wallet for fiat currency, a crypto wallet is a place where you store your cryptocurrency. There are two main types of wallets, custodial wallets like those found in Paypal and other fintech apps which act as a “custodian” for your crypto assets, meaning you are trusting the company to hold on to your funds. And the second is a non-custodial wallet which can come in the form of software or hardware on your browser or in the form of a USB key.
Ideally, it’s best to have both types of wallets, custodian wallets that are online (hot wallets) that allow for more convenient day-to-day trading, and non-custodial wallets that may be stored offline (cold wallet) which gives you more autonomy and security. With that said, let's see what it takes to find the best crypto wallet.
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There are many variations of a crypto wallet that go beyond a custodial or non custodial wallet. Every few months we are seeing new innovative ways to hold, transact and secure crypto assets. What is relevant today, might not be tomorrow.
The type of wallet you will want will depend on the token you want to store, how you access it, the level of privacy, as well as a range of other issues such as security, services, etc. Each person will have their own preferences as to what is more important in their specific situation and how it best suits their needs. That being said here are a few things you can look into when finding a solution that worlds for you.
If you trade every day or need access to your funds quickly, an online or hot wallet will allow you to get access to funds un a second just a few passwords. Easy, but also more susceptible to hackers. Cold wallets on the other hand have the added advantage of being offline stored on a physical device which is accessible only when it is connected with your computer.
Securing your crypto assets involves many different factors. Some of which depend upon the security of the provider while others depend on the personal security measures you take.
Some of the security measures that you can implement include:
To ensure that you are using a secure third-party wallet provider there are a few things you can check to ensure that you have yourself covered.
Every crypto coin and token runs on a separate network and many have their own unique wallet type. For instance, users can not send ETH to a BTC wallet, because the two coins run on different blockchains. When looking for a crypto wallet, make sure it supports the digital assets you’re going to use.
Many wallet providers support exchange options and allow you to buy and sell crypto right in the app. Most DeFi wallets support things like crypto staking, getting loans, and access to staking or yield farming opportunities.
Ledger is a pioneer among crypto wallets providers and is one of the most popular. Ledger is a physical wallet USB flashcard that connects to a computer to access assets. The new Nano X model also has a Bluetooth connection, which allows you to access the app through a smartphone.
The wallet uses multiple security mechanisms such as tamper-resistant Common Criteria (CC) EAL5+ certified Secure Element (SE) chips. Ledger also has been given two thumbs up from and it’s certified by ANSSI, a French cyber security agency that knows their stuff.
Ledger supports 1800+ digital assets, including the most popular coins such as Etherum, Ripple, and Cardano where you are able to both trade and stake almost any of your coins.
Mycelium is another well-known company that has been around for a number of years. At the moment it is available only on mobile devices. Mycelium is great for beginners as it is has a straightforward interface and is easy to use, unlike many of the other platforms that require some time to get used to the layout.
Currently, Mycelium supports a variety of ERC-20 tokens and major coins like Bitcoin and Ether. It also has an integrated exchange platform and allows you to connect to your hardware wallets easily.
Eidoo is a Defi wallet that gives you the ability to be the sole owner of your private keys. The main advantage of this wallet is that it supports 1000+ cryptocurrencies, including ERC721 and ERC20 tokens and as well as major coins like LTC and BTC/ What makes this wallet unique is that it is a decentralized crypto exchange and so gives you more security and anonymity measures that currently as not found on major exchanges.
Another notable feature is that the platform has a built-in NFT marketplace, as well as a crypto exchange so you can participate in yield farming and also earn interest by connecting your wallet with their Eidoo card that you can use as a debit card or exchange into fiat and withdraw using an ATM.
The Samourai wallet is built to keep your identity private and your funds as secure as possible. It does not require any KYC and is a free open source platform based on the TOR network. It secures your wallet data with an advanced AES-256 encryption and allows you to access via a remote connection giving you the ability to bypass their servers anonymously.
Part of Samourai’s allure is that each time you connect to the network and use your wallet for a transaction it will be a new number. Although this makes it secure it does pose other challenges.
Cex.io is a crypto exchange platform that started in 2013 and offers both cold and hot wallets for storing crypto that allows you to move your crypto assets between wallets easily.
Some of the services that have made them a player in the crypto space are their instant buy option bank card, as well as market and limit orders for over 200 coins, which include price alerts and order notifications.
Whether you choose a cold non-custodial wallet or a hot online wallet will depend on what you are looking for at the moment. Having both types of wallets allows you to get the best of both worlds, diversifying your assets ensuring that your crypto profits will be around for a long time to come.
For more in Crypto:
Why You Need A Plan B
Threats to Your Assets
Global Diversification Planning