What is a cryptocurrency wallet?
NOTE: Wallets review table is at the bottom of this page.
Cryptocurrencies are not immune to theft. There have been many occasions involving exchanges having been hacked and wallets having been invaded. What do we mean by wallets if Cryptocurrency is digital? Cryptocurrency is essentially digital money, and, like anything valuable they need to be stored securely the same way funds are stored in a bank or even in a physical wallet. A cryptocurrency wallet is basically a software program that allows you access to the online ledger associated to the specific cryptocurrency (the blockchain). In other words, the cryptocurrency is not actually stored in the wallet, it is updated on the blockchain that confirms which “wallet” or address possesses ownership of the cryptocoin.
The wallet holds a “private key” or a unique, complex code created through cryptography. This private key is required to match the public address in order to transact or transfer ownership from one wallet to another. The “transaction” is simply an update to the blockchain as to the addresses that have transacted – there is no actual transfer of cryptocoins. Simply stated: Lose your private key and you end up losing your funds.
Slowly but surely more cryptocoin storage options are becoming available on the market. Although the security of the options may vary, there are viable means of storing your cryptocurrency securely. Your private key and your wallet allow you to go online and check the public ledger as well as transact through it.
We are going explain these options to you and provide a review on each one:
Which Cryptocurrency wallet is the best to buy?
Cryptocurrency wallets have different degrees of security. There are mobile wallets, desktop wallets, online wallets, hardware wallets and lastly there is “cold storage”, which arguably is the best most secure method of storing your cryptocurrency.
Ideally, you’d like to have a multi cryptocoin wallet that can store a number of different coins from Bitcoin to altcoins. However, as a safely precaution it is always advisable to maintain multiple wallets for specific uses ie. More secure wallets for Mwherein you store smaller amounts of cryptocurrency.
Types of Cryptocurrency Wallets
Online wallets can be accessible from any device because they utilize cloud storage. Cloud storage and easy accessibility means convenience. Many exchanges provide a wallet/storage function however the concerns that this raises is that your private key is stored online and controlled by a third party. Your wallet is more susceptible to hacking and theft.
Mobile wallets are typically apps that can be downloaded onto mobile devices such as tablets or mobile phones. These wallets are most beneficial due to easy accessibility. They typically have an easy-to-use interface but low storage capacity, which can also be limited by your phone’s storage capacity. Security factor: theft or loss of your mobile device may cause administrative issues when recovering data and wallet.
Desktop wallets allow you to have your wallet accessible on your computer however this usually means accessibility is limited to one device. The security issues revolve around hacking or virus which may lead to loss of cryptocurrency funds.
Hardware wallets allow the user to store their private key on a usb/flash drive-like device. This allows the transactions to take place when the device is linked online however, the actual transactions are stored offline, and, are, therefore, less susceptible to hacking. Most hardware wallets operate in a simple “plug-and-play” manner and have a user friendly web or desktop interface that allows you to conduct your transactions or check your wallet details. We recommend that a hardware wallet is the highest form of security measure one can take second to paper, cold storage, which we explain below.
Paper wallets allow you to store your private and public keys on paper. This creates a barrier between hackers/cyber crime and your wallet as you have removed your details from an online source and taken them offline. The difficulty with paper wallets is in the accessibility of your funds and risk associated with human error. If you misplace the paper wallet then you potentially
Before you become overwhelmed with the different wallets and storage options you need to ask yourself a set of questions:
- Do you want to store different cryptocurrencies or a single cryptocurrency?
- If a single cryptocurrency then you must choose a wallet specifically for the type of cryptocurrency you intend to keep. If multiple cryptocurrency then confirm the types of cryptocurrencies that the wallet of your choice can hold.
- Do you to access your cryptocurrency from multiple locations or from a single location?
- If multiple locations then you require something mobile as opposed to a desktop wallet.
- If a single location then consider a desktop app IF your location is secure.
- Will you be transacting frequently or holding cryptocurrency for investment purposes?
- If for investment then consider wallets that are highly secure and are capable of offline storage.
- If for every day use then consider something mobile and easily accessible otherwise high security, offline storage may prove to be time consuming.
Cryptocurrency Wallets Reviews 2018
Cryptocurrency Hardware Wallets
|Ledger Nano HW.1||1. Bitcoin hardware wallet on a smart card device||1. Does the job on a shoe string budget.||1. No screen|
2. Only compatible with Bitcoin
|Ledger Nano S||1. Bitcoin, Ethereum, Altcoin and Litecoin.|
2. Provides second factor authentication
|1. Multiple cryptocurrency storage|
2. Allows for backup and restoration.
3. Has physical display
|1. No passphrase support (word sequencing that allows access).||$68|
|Trezor||1. Bitcoin, Ethereum, Ethereum classic, Litecoin, Bitcoin Cash|
2. Not open sourced
|1. Reputation for reliable Bitcoin security|
2. Easy to use interface for Bitcoin
3. Integration with Myetherwallet platform in order to store Altcoins.
|1. Not the cheapest but may be cheaper than KeepKey||$105|
|KeepKey||1. Ethereum, Bitcoin, Litecoin, Dogecoin, Dash and Namecoin|
2. Open source.
|1. Open source and allows user to program wallet for less recognized cryptocurrencies.|
2. Sleek design and easy to use interface - suitable for non-tech savvy people.
|1. Can be difficult to use if don't know programming - capability can be wasted.|
2. More expensive than Trezor and Ledger options.
Cryptocurrency Mobile Wallets
Mobile wallets generally exist in the form of downloadable applications. There are iphone/iOS apps and Android apps. Top iOS apps include:
Airbitz is a reliable wallet however it is only built for Bitcoin/
Breadwallet is quite popular and also only built for Bitcoin. This wallet however open source and the user can programme wallet according to personal preferences.
Android Mobile wallets include:
Airbitz and Breadwallet along with:
GreenBits is popular amongst Android users and also links with Trezor and Ledger wallets in order to facilitate accessibility.
Mycelium is by far the most popular amongst android users with it simplistic design easy to use interface.
Electrum is visually quite basic but by far one of the most secure wallets out there. It is open source with the result that many people have participated in writing its code which makes it more secure against malware. It is available on Linux, Mac and Microsoft.
This desktop wallet is suited to “non-techies”. Visually, it is simplistic and has an easy-to-use interface. It is not open source. It can also store altcoins.
Exodus will work on Linux, Mac and Microsoft.
This is a multisignature wallet and requires a number of security measures to be taken before you gain access to your wallet. Available to Linus, Mac and Microsoft users.
This wallet is suitable for advanced cryptocurrency users. It is a decent brand and extremely secure. It allows the user to encrypt and utilize various cold storage options. Available to Linus, Mac and Microsoft users.