If you want to buy or invest in cryptocurrencies, a crypto wallet is essential to store your crypto securely and protect and validate crypto transaction information.
There are many different types of crypto wallets available, and it's necessary to understand the differences, so you know which crypto wallet is best to store cryptos.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
What is a cryptocurrency wallet? How does it work? How does a crypto wallet keep my digital assets safe? If these are some of the questions that keep your mind wired while trying to comprehend the complexities of cryptocurrency trading, then this simple step-by-step tutorial is just for you.
If you're a crypto beginner looking for your first crypto wallet, it may seem complex to understand what a crypto wallet is and how it works - bearing in mind that you aren't transferring coins into your wallet. You are moving a digital address into your crypto wallet that identifies ownership of your crypto on the Blockchain.
Is a hardware crypto wallet safer than a hot wallet? What are the most important things to look for when choosing a crypto wallet?
No need to worry. We explain everything about crypto wallets in this guide, and we feature the best crypto wallets, including the pros and cons for each.
A Closer Look at The Best Crypto Wallet Sites - Full Reviews
The following reviews will reveal everything you need to know when choosing the best crypto wallet sites in 2023.
1. Coinbase – Best Crypto Wallet for Beginners
Coinbase is a highly reputable cryptocurrency exchange that provides a high level of security for users of the platform.
The Coinbase crypto wallet has an easy to navigate, intuitive and user-friendly interface for beginners. It supports a staggering 500 cryptocurrencies, which is the most storage amongst hot wallets. And, for added security, the Coinbase wallet has 2-factor authentication and multi-signature functionality.
As it's a hot storage wallet, it has the same potential security issues and areas of weakness as other hot storage wallets.
The Coinbase wallet is available to mobile and tablet users. There's a Chrome extension for PCs and laptops. It's ideal for beginners due to the simplicity of the interface.
You can connect to most major banks via the app, and the wallet can also store NFTs (Non-fungible tokens) and digital collectables.
You can open a Coinbase wallet without signing in to open an account with the Coinbase Exchange as the two entities are separate. The wallet is non-custodial as the private key is not on Coinbase servers. The key is in your wallet, so your cryptos cannot be locked by Coinbase and are not vulnerable if there's a Coinbase cyberattack on the exchange website.
There's a backup option to protect your digital keys in the clouds if you wish. There's also a function for biometric authentication with FaceID or TouchID, which is the ultimate security.
Pros of Coinbase Wallet:
- ✅ Simple and easy to navigate and the user-friendly interface is suitable for beginners
- ✅ Can store 500 cryptocurrencies and NFT tokens
- ✅ 2-factor authentication and multi-signature for security
- ✅ Option for biometric authentication
- ✅ Coinbase is a reputable exchange that takes security seriously for their users
Cons of Coinbase Wallet:
- ❌ A chrome extension required for laptops, Macs and PCs
- ❌ The usual security risks associated with all hot wallets
2. Mycelium – Best Crypto Wallet for Mobile Devices
The Mycelium crypto wallet is an established mobile-only crypto wallet with advanced transaction history data and attention to security with several levels of pin protection.
The app is reproducible to expose potential security issues. Transaction fees can be customised by priority on the app:
The advanced transaction history can highlight things like block height (a specific location in the Blockchain), inputs and outputs (the transaction addresses) and miners fees (Bitcoin miners' fees for validating blocks).
Mycelium also has Inter-wallet operability through the entire FIO network.
The FIO Protocol is "an open-source usability-layer solution that makes sending, receiving and even requesting cryptocurrency across all blockchains easy and near error-free by providing a decentralized human-readable address (NFT)." (CoinMarketCap).
There's also a watch-only mode. Users can disable ongoing transactions and, at the same time, still track their trades.
- ✅ The Mycelium crypto wallet is compatible with cold storage solutions such as Ledger, Trezor and KeepKey
- ✅ Single Address saving accounts and HD spending accounts are available
- ✅ Educational material and a crypto exchange on the in-app
- ✅ Offline transactions available
- ❌ The Mycelium crypto wallet may not be as secure as hardware wallets
- ❌ It's not easy to use for beginners. The interface can be confusing.
- ❌ Limited to Ether (ETH), Bitcoin (BTC) and ERC-20 tokens
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
3. Electrum – Best Crypto Wallet for Bitcoin (BTC)
The Electrum wallet is a highly customisable, open-source crypto wallet with top-level security features.
Founded ten years ago, Electrum is an established Bitcoin wallet. Users can adjust fees to suit priority needs, such as lower fees for slow transactions and higher fees for priority transactions.
The Electrum wallet uses SPV (simple payment verification), which means that setup is fast in a matter of minutes. It can integrate with other wallets such as Trezor, Ledger and KeepKey for cold storage.
- ✅ Easy and fast to set up the wallet
- ✅ Security is better than other hot wallets
- ✅ Transaction fees can be customised
- ✅ No downtime for wallets
- ✅ 2-factor authentication and multi-signature for security
- ❌ The wallet is limited to Bitcoin (BTC) trading
- ❌ The setup is not easy, and the interface is complicated for beginners
- ❌ Electrum provides zero support – no email, phone or chat. If something goes wrong, you're on your own!
4. Ledger Nano X – Best Offline Crypto Wallet
The Ledger Nano X Crypto Wallet is the most popular and well-known cold storage crypto wallet. It has mobile trading functionality and high-security standards and supports many cryptocurrencies, around 1,800 to date, of which it can manage up to 100 simultaneously.
The built-in battery lasts for eight hours. It has a 128 x 64-pixel screen and Bluetooth connectivity, which you can switch off if not required or for extra security.
The Ledger Nano X is one of the most expensive cold storage wallets, priced at around $119.
You can exchange crypto on the go via the Ledger app available on iOS devices and Android. You can buy and sell crypto via the Ledger Live app and generate revenue by lending and staking your cryptos.
- ✅ Supports a vast number of digital assets
- ✅ Secure Element chip for high-end security (credit/debit cards, passports etc.)
- ✅ The specially designed hardware protects your private keys
- ✅ Bluetooth functionality means you can trade live on the mobile app
- ✅ Excellent 8-hours of battery life
- ✅ Staking and lending options
- ❌ It's one of the most expensive cold wallets
- ❌ It does not have a touchscreen
- ❌ Bluetooth technology could cause security concerns
5. eToro – Easy to use, Secure Crypto Wallet Suitable for Beginners
eToro is the leading social trading platform in the world. They describe their crypto wallet as an "easy-to-use, multi-crypto, secure eToro Money crypto wallet."
The wallet supports over 120 cryptocurrencies, and you can change over 500 pairs to other cryptos. The eToro wallet makes it easy to transfer, buy, store and receive cryptocurrencies.
eToro provides an unlosable private key. If you lose it, they can recover access to your wallet.
You have a private on-chain address which means you can transfer, send or receive your cryptocurrency to any address on the Blockchain.
The eToro crypto wallet is available in most countries, with a few exceptions.
- ✅ eToro is regulated with GFSC
- ✅ Reputable platform
- ✅ Easy to use – access with your eToro credentials
- ✅ Over 120 cryptos
- ✅ High security, online hot wallet
- ✅ Free to download
- ✅ On-chain address
- ❌ eToro is not available in all countries
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
6. Trezor – One of the Best Hardware Crypto Wallets
Trezor was the first to release a hardware crypto wallet.
It's a well-known brand with two models, both with excellent security features and support for multiple assets. It doesn't support as many cryptocurrencies as the Ledger, but it remains a popular hardware crypto wallet. The Trezor one is around $100 to buy and the Model T is around $70.
If you use Exodus as your main crypto hot wallet, it can integrate with both Trezor models.
- ✅ You can choose a Trezor One which is more affordable than the Trezor Model T
- ✅ The interface is easy to use and intuitive, so suitable for beginners
- ✅ Compatible with Exodus hot wallet
- ❌ The Trezor is more costly than other hardware wallets with similar functionality
- ❌ There is currently no support for iOS devices
7. Exodus - Best Crypto Wallet for Desktop
The Exodus wallet is easy to use, with broad functionality and fast transaction speeds. The wallet is intuitive and visually appealing compared to many other crypto wallets.
Apps are available for Android and iOS devices, and it is also compatible with Trezor cold storage wallets.
The desktop wallet is updated every fortnight and is Exodus core offering.
The Exodus crypto wallet is a hot wallet supporting 145 cryptocurrencies, more than most hot wallets and more than enough for the average crypto investor or trader. It supports popular coins such as Ethereum (ETH), Dogecoin (DOGE), Litecoin (LTC) and Shiba Inu (SHIB).
Fees are only customizable for Bitcoin transactions, though hopefully, at some point, this may include other cryptocurrencies.
Exodus uses SPV, meaning it runs on a light client, not downloading complete blockchains. SPV speeds up transactions.
Exodus is releasing more apps to help diversify the wallet's functionality, which includes crypto staking, live charts and crypto deposits.
- ✅ Exodus supports over 145 cryptos
- ✅ Compatible with Trezor T and Trezer One hardware wallets
- ✅ You can buy Bitcoin (BTC) with Apple Pay
- ✅ 24/7 customer support
- ❌ Transaction fees can be high on the in-wallet crypto exchange
- ❌ No 2-factor authentication or multi-signature support
8. KeepKey – Most Affordable Crypto Hardware Wallet
The KeepKey is an affordable crypto wallet at less than $50. The attractive interface is suitable for beginners, more so than the Trezor and Ledger crypto wallets. It has high-level security standards. If you are just starting with buying crypto, the KeepKey is an ideal hardware wallet.
- ✅ The KeepKey is affordable at $49
- ✅ The device displays QR codes
- ✅ Beginner-friendly
- ✅ High-level security
- ❌ A limited number of coins
- ❌ Heavier than other crypto hardware wallets
9. Blockchain Wallet – a Popular Online Crypto Wallet
Blockchain is an established crypto wallet provider, with 79 million self-custody wallets created to date.
To open a wallet, Blockchain verifies your identity. With the Blockchain wallet, you can transfer cryptos such as Ethereum (ETH), Bitcoin (BTC) and many other cryptos. You can set up a rewards account and earn annual yields up to 13.55 APY, paid monthly.
- ✅ 2-step verification
- ✅ Easy to use
- ✅ 12-word Recovery phrase functionality
- ✅ Customer support
- ✅ Easy swap function
- ✅ Option to stake cryptocurrencies
- ❌ Identify verification required to open a wallet
What Is A Crypto Wallet?
A cryptocurrency wallet functions like a traditional wallet that holds your paper currency. But, here it holds proof of your digital cash.
A cryptocurrency wallet is a software program that gives you access to all cryptocurrencies in your possession and allows you to manage your holdings, store, receive and send coins. Some wallets can hold only one type of coin, while others support coins from multiple cryptocurrencies. A few have additional features like exchange rates and other information.
The term 'wallet' is misleading because a crypto wallet does not actively store your cryptocurrencies. When you purchase crypto assets, you receive a digital code for your crypto to enable interaction with your address in the Blockchain.
Your crypto wallet has to check all transactions from and to your crypto wallet to identify the crypto linked with your blockchain address.
A crypto wallet is more like a ledger than a wallet.
How Do Crypto Wallets Work?
When someone sends digital currency to your crypto wallet, there's no actual transfer of coins. Think of it more like the other person relinquishing ownership of their crypto by sending it to your wallet. The crypto, let's say it's Bitcoin (BTC), is no longer associated with that person's address on the Blockchain. Now it belongs to you and is registered on the Blockchain with your address.
Two keys (digital codes) are required to send crypto to someone else, a private key and a public key.
The public key is a mix of numbers and letters automatically generated by the crypto wallet provider.
A public key might look like this: B1jcAXq48iK866yxJ66xgV5514, and it's the key you can share with others.
A private key looks similar. It's a mix of numbers and letters in the same way.
However, your private key must be secure and not shared with anyone else.
What's the difference between a private key and a public key?
To explain, think of a crypto wallet like your email account. If you want to receive emails, you need to give people your email address, and that's fine. Your email address is the equivalent of a public key. You need to provide this address to others to receive crypto into your wallet.
The private key is like the password to your email account. This address gives access to your crypto wallet, allowing your crypto to transfer to another address. If this situation happened, there'd be nothing you could do about that.
Always keep your private key in a secure place.
Using the two keys together means you can send and receive transactions safely. The private key must match the public key assigned to your digital wallet because this authenticates funds by verifying both keys.
Types Of Crypto Wallets
The five types of cryptocurrency wallets are - desktop, mobile, online, hardware and paper wallets.
Desktop wallets are cryptocurrency wallets that you can install on your computer or laptop. As a result, a desktop wallet can work as both a hot wallet when it is connected to the internet and a cold wallet when it isn’t.
Like online wallets, desktop wallets are suitable for traders who make online transactions. However, before you sign up for any desktop cryptocurrency wallet, you need to make sure your crypto wallet is compatible with your operating system.
There are also some safety issues that you should consider; if you have your keys in an unencrypted form or if you fall victim to false upgrade notices and scams, your money may be stolen.
Desktop wallets are apps or software programs that can be easily downloaded and installed on a computer or a laptop. Available for most operating systems, desktop wallets are relatively safe as they can only be accessed through your computer.
Once installed, the app will generate a mnemonic phrase that will store all the information required for your wallet recovery. The same information is required to access your wallet; so you need to keep it secret.
- Easy to install and easily available on the net. Many of the cryptocurrencies have a desktop wallet created.
- As they are accessible only from the computer, desktop wallets offer a high level of security.
- Desktop wallets offer additional tools and features.
- Since your computer or laptop is connected to the Internet, there are chances of virus and malware attacks.
- And worse, if your computer is hacked, you may lose your virtual money. Install reliable anti-virus software to keep your digital assets safe.
Mobile wallets can be installed from an app on a smartphone, tablet and other similar hand-held gadgets. Available for both iOS and Android operating systems, mobile wallets come with additional features such as a QR code scanner. Mobile wallets are extremely convenient as people can access, send, receive and check their crypto balances, anytime, anywhere.
All major cryptocurrencies have mobile wallets.
- Easy to use.
- Convenient and can be used on the go.
- Due to space and capacity constraint, mobile wallets have only basic functionality.
- Just like the cyber-attacks on a desktop, mobile crypto wallets are also vulnerable to cyber threats, viruses and malware.
- Have weaker cryptographic security features.
- Anyone who gets access to your phone or tablet with a crypto wallet on it, will be able to take your money away.
Online crypto wallets are very popular in the crypto world. These cryptocurrency wallets work online via a browser.
As you can guess, online wallets are hot wallets, which means they are connected to the internet. Every time you want to access your cryptocurrency you need to be online.
While this makes them easier to use, it does mean that online crypto wallets are less secure. Being connected to the internet makes it easier for hackers to steal some of your cryptocurrency.
Just like accessing your Google drive on the cloud, online cryptocurrency wallets are in a cloud and can be accessed via web browser from your mobile or computer. Online wallets get the best from both computer and mobile wallets.
- Online wallets offer faster transactions.
- Online wallets are integrated with cryptocurrency exchanges and allow transferring amounts between supported coins.
- Low-security level – as your private keys are stored in the cloud, hackers can get access
let’s look at hardware or cold crypto wallets. Hardware cryptocurrency wallets have become very popular recently, with several being released in the last few years. In simple words, hardware crypto wallets are wallets that usually take the form of a USB or other hardware device that can be plugged into a computer. In most cases, you will just need to plug them into a PC, enter a PIN, and then you can send cryptocurrency.
This option is useful for those who don’t mind carrying their cryptocurrency wallet with them and have access to a computer. That said, you can also store your device in a safe, just as you would with a paper crypto wallet.
Though cold wallets are considered safer than hot wallets, hardware wallets are not perfect. They may get infected with malware or viruses when connected to a computing device. Also, in contrast to hot wallets, if you lose your device and don’t have a stored hard copy of your data, it’s hard to retrieve your data and you may lose your assets.
Unlike the other online types of wallets discussed here, the hardware wallet stands out in its being an offline option. Here, the mode of storage is a dedicated device, often a USB or an external hard disk. To send money, the device just has to be plugged onto a computer connected to the internet. To ensure security, you just have to take care to disconnect the wallet once the transaction is completed.
Hardware wallets too are constantly evolving and come in different types. They also come with a built in LED screen making it possible to do without attaching a computer. There are plenty of hardware wallets on offer and some have the ability to store multiple cryptocurrencies and several ERC-20 tokens.
This offline wallet alternative is ideal for those who need to store larger quantities of cryptocurrency for longer periods.
- The hardware approach means that users do not have to worry about any online threats like hacking.
- The offline storing of the keys means cyber threats are not a risk at all. All you need to ensure is that the device is stored safely and is not misplaced.
- With improving technology, hardware wallets now are getting to be more compatible with various web interfaces.
- The offline nature of these wallets means you have to spend money to purchase these. So be prepared to invest anywhere from $100 to $150 to acquire the device.
- Ready availability also could be a problem as they can be in short supply.
- The one other disadvantage of hardware wallets is the relatively lower levels of functionality as compared to online wallets.
A paper cryptocurrency wallet is a form of cold storage. The idea here is that data are stored offline and, ideally, cannot be stolen.
These wallets can generate keys printed on paper or as QR codes. To be more precise, most paper wallets provide two QR codes, one for your private keys and one for your public keys (which can be printed onto a piece of paper).
Once you take your wallet offline, you should find a suitable place to store it. Instead of keeping it under your mattress, consider a safety deposit box in a bank. This can be inconvenient for someone who regularly uses cryptocurrency, though. Paper wallets are way more suitable for investors who want to hold cryptocurrency for a long time.
An early model of a hardware wallet, paper wallets allows you to store your private and public keys on print or as a QR code.
To spend cryptocurrency, you first need to move funds from your paper wallet to your software wallet. The process is known as sweeping.
- Paper wallets are one of the cheapest wallets.
- Paper wallets are considered to be relatively hacker-proof as they are not stored on a computer or any other Internet-connected device.
- Paper wallets are not beginner-friendly.
- To operate this wallet, users need some sound technical knowledge.
- Paper is not a very durable material, so you have to take extra care to keep your wallet from fire, water and a shredder.
Crypto wallets can be classified into two groups, either a hot wallet or a cold wallet. Hot wallets permanently connect to the internet, and cold wallets are offline and typically hardware.
Hot wallets are pieces of software accessible from a desktop computer or mobile phone. Some hot wallets are accessed from a browser and used across a variety of devices.
Hot wallets are popular because they are convenient to use with easy access - the app or website stores your private and public keys. You can access your hot wallet from anywhere in the world, no matter where you are, as long as you have an internet connection.
Hot wallets are popular with crypto traders who want to access their cryptocurrencies quickly.
The potential downside to a hot wallet is the risk of a cyber attack. Hackers try to break into the system with malware and find hidden vulnerabilities. Your crypto is more at risk with a hot wallet, though levels of security are typically high.
Cryptocurrency exchanges that host crypto wallets are the biggest targets for cyber attacks.
- ✅ Easy access, convenient to use on the go as long as you have an internet connection
- ✅ Your data is easier to recover with a hot wallet as the host stores your private and public keys
- ❌ Hot wallets are more vulnerable to attacks than cold wallets
- ❌ The custodial host stores your keys on the exchange
Cold wallets are usually a USB drive and may look somewhat like a memory stick.
They store your digital keys offline via the hardware or a sheet of paper. Paper wallets are usually accessible with print-out QR codes. When you connect the cold wallet to a computer, you can buy, sell or trade crypto.
Cold storage wallets are resistant to cyber-attack because hackers cannot obtain the crypto owner's keys remotely. The only way to access the data on the cold wallet is for a thief to steal the wallet and then solve the password.
For cyber attackers, it's much easier to target hot wallets.
Top-level security is the best option for a crypto wallet, and most cold wallets have a 2FA security system and multi-signature.
But it can create problems if a cold wallet owner makes a mistake. A hardware wallet is the size of a memory stick, which makes it easy to mislay. It's also easy to lose printed QR codes or sheets of paper.
The criteria for owning a cold wallet is to back everything up at least twice. Because if you lose it, it's gone for good. There are no avenues for recovering your crypto.
- ✅ Better security than hot storage wallets
- ✅ Most cold storage wallets are supported by hot storage wallets
- ❌ Transaction speeds may be slower
- ❌ Virtually impossible to recover your crypto holdings if you do not have a backup for your digital keys
What To Look For In A Crypto Wallet
All crypto wallet holders have different needs for their cryptos.
There are several questions to ask yourself:
- Am I investing or trading my cryptos? – if you're trading cryptos, fast access may be your priority.
- How often do I trade cryptos? – if you trade crypto daily, the ability to transfer cryptos fast may be more critical than for crypto investors.
- How quickly can I access my cryptos? – for instance, do you travel regularly and need to access your crypto wallet on the go?
- Can I make safe backups with a cold storage wallet? – making mistakes with a cold storage wallet can be costly.
- What cryptos do you want to invest in or trade?– some of the crypto wallets support only a small range of cryptos. Know what cryptos you want to buy, and then choose a crypto wallet that supports them.
- How much am I happy to spend? – Most hot wallets are free, but cold storage wallets may be from $49 to over $100.
- Do I require transaction speed? – Hot wallets are often faster and have greater functionality than hardware wallets. But crypto trading fees may be higher.
- Can I make money from staking cryptos or crypto lending? – some wallets have the functionality to stake cryptos and earn rewards, or you may wish to get involved in crypto lending.
Choose a wallet that supports a good number of cryptocurrencies, unless you plan only to trade Bitcoin. An intuitive and accessible interface makes it easier to implement transactions. Check customer support levels. 24/7 is ideal because things can and do go wrong occasionally, especially during wallet updates.
Although you may prefer a hot wallet, it's a good idea to consider a compatible cold storage wallet as a way to safeguard your crypto assets. You can then move your crypto quickly as needed.
Public And Private Keys
To access a cryptocurrency wallet, the user needs one public and private key. A private key is a string of numbers and digits randomly generated that works as a password or digital signature to access your wallet.
A public key is like an address or a bank account number that is visible to anyone who wants to send crypto assets to you.
A private key is like the key to your locker; anyone who gets it can open your wallet and take your cryptocurrency. It is crucial to keep it as safe as possible. When you receive any type of virtual currency from someone, they assign the ownership of the coins to your wallet address.
How To Choose A Cryptocurrency Wallet
Choosing the best cryptocurrency wallet depends on a number of factors. Would you need to access your wallet daily? How many currencies will you hold? Do you want security or convenience?
- If you need to hold on to large amounts of cryptocurrency for longer periods of time, go for a hardware wallet.
- If you want to make sure of the security of your funds then opt, again, for a hardware wallet.
- If you want to access your wallet from anywhere, anytime, online wallets are the best.
- If you need a user-friendly option, go for a mobile or desktop wallet.
- If you are planning to hold more than one cryptocurrency, then picking a wallet with multi-currency support is a must.
How To Protect Your Wallet
Like in real life, your pocket wallet must be secured; precautions must be taken to protect your cryptocurrency wallet.
Diversify: Just like your wallet with cash, keep only small amounts of currencies on your computer, mobile, or server for everyday uses. Keep the larger part of your funds in a safer environment.
Keep a backup: A backup of your wallet can protect you against computer failures and allows you to recover your wallet in the event of theft of your device.
Keep up with updates: You need to update your wallet software whenever the developers release a new version.
Secure your wallet: Create a strong password. Go for service providers who provide additional layers of security such as a two-factor authentication and pin code request every time a wallet application is opened.
Bonus Checklist For Cryptocurrency Wallets – Mobile And Desktop
To ensure utmost security while using cryptocurrency wallets, it is important to have a thorough checklist for usage and adhere to it.
- Be selective when investing in a wallet. Buy only from a reputed brand with a proven track record. Avoid unknown brands and those that have not been vetted widely.
- Make sure the software being installed is from reliable sources.
- Invest in a secure firewall. Also, pick your user names and passwords carefully, opting only for those that are strong and safe.
- Reputed antivirus software and malware are a must.
- Ensure that the address of an online wallet and of the address to which funds are being sent are checked and cross checked before making the payment.
- Absolutely avoid using the wallet from an unknown connection or public Wi-Fi.
Why Do I Need a Crypto Wallet?
You don’t need to be a crypto king to embrace the importance of having a crypto wallet. Before you even think about buying cryptocurrency, get yourself a cryptocurrency wallet!
Though you do not actually store your cryptocurrency in your cryptocurrency wallet but on a decentralised blockchain, a cryptocurrency wallet is mandatory to keep your money safe. Again, it’s where you store your public and private keys, which gives you access to your cryptocurrency.
Every cryptocurrency trader who wants to own a cryptocurrency should have a crypto wallet unless they are trading cryptocurrency as a CFD. If you don’t use a cryptocurrency wallet and you leave your cryptocurrency on an exchange, you run the risk of getting ‘goxxed’.
In the end, there are no locksmiths to help you retrieve your keys and access your virtual piggy bank. A crypto wallet is the only way to keep your data and assets safe!
How Do I Open A Cryptocurrency Wallet?
Now when you know that having a cryptocurrency wallet is essential to keep your cryptocurrency safe, it’s time to actually open one.
But wait! There are several things to consider before getting a cryptocurrency wallet. Here are some of the most important questions to ask yourself:
- How regularly do you use cryptocurrency? Are you looking for a safe space just to hold your cryptocurrency? Do you regularly use cryptocurrency to pay for things?
- How do you want to access your wallet? Do you want to access your wallet via a computer or a mobile? Do you prefer a printed version of your keys?
- How many cryptocurrencies do you want your cryptocurrency wallet to hold? Do you only want to hold one (for example, Bitcoin) or many?
- What services do you trust? What security and privacy features do they offer?
Once you’ve decided on a wallet that will suit your needs and crypto trading goals, you will easily find step-by-step instructions on how to get and use a crypto wallet by the provider of your choice.
How Private Are Cryptocurrency Wallets?
While getting a crypto wallet is easy, we should mention that many beginner traders ask how private cryptocurrency wallets are. After all, privacy, security, and financial freedom are some of the foundations of the crypto world!
Do not worry! Most cryptocurrency wallets are pseudonymous, which means that they are not necessarily tied to the identity of a user.
Your personal details, such as your name and address, will not be shown. In most cases, other crypto users will be able to view your public address and trace transactions (they might be able to figure out what it is you are sending).
That said, some cryptocurrency wallets may ask you for KYC (know your customer) documents. Depending on if you feel comfortable giving away such information, you may like or dislike this feature. One upside to having submitted KYC documents is that if something does happen and you lose access to your wallet, you may be able to recover it.
It’s noteworthy that it is also possible to create multi-signature wallets. This is where multiple individuals are needed to sign off transactions; this can add another layer of security to your cryptocurrency wallet and is a great option for businesses.
How To Keep Your Cryptocurrency Wallet Safe?
Given the different options crypto traders have, choosing a cryptocurrency wallet may be tricky. And as stated above, each crypto wallet comes with different safety concerns. So how to keep your cryptocurrency wallet safe?
Perhaps the safest option is to keep your cryptocurrency wallet offline in cold storage. That said, this option does make cryptocurrency management a little more complicated.
Thus, to enhance both safety and usability, the best way to keep your cryptocurrency secure and efficient is to use both cold storage and another wallet. Put most of your cryptocurrency in cold storage while keeping a smaller amount (an amount that you intend to use) in an online wallet.
As a general practice, don’t leave your wallet open on any device - mobile or desktop - always close it when you do not need it.
You can also add more layers of security to your wallet, such as long and complex passwords with a good variety of alphanumeric and non-alphanumeric characters. Consider wallets that require or give you the option for two-factor authentication, or wallets that require a password prompt every time you make a transaction.
You should always be on the lookout for genuine updates for your wallet as well. As hackers are usually ahead of the game, you also need to stay up to date as well.
Another vitally important thing is to stop boasting about your cryptocurrency holdings. This is highly risky. Let’s not forget that overconfidence is not a good trait in trading.
As a matter of fact, there have been cases of people being attacked for their cryptocurrency. In September 2019, a Bitcoin investor from Oslo, Norway, escaped a robbery for his cryptocurrency assets - which is a reminder of how careful you need to be when telling others about how much cryptocurrency you own.
Last but not least, we should mention that some financial experts recommend converting cryptocurrency to fiat money for extra safety.
How To Buy Cryptocurrencies Directly From The eToro Wallet?
Our tutorial is based on global broker and exchange eToro, as the platform allows you to invest in and trade cryptocurrencies without paying any commissions. In this section of our cryptocurrency Wallet guide, we are going to walk you through the process of opening a cryptocurrency trading account, making a deposit, and buying cryptos.
Step 1: Open a Cryptocurrency Trading Account
eToro customers can buy cryptocurrencies directly from the eToro wallet by using a credit card and bank wire.
Visit eToro website, click on open an account and enter your personal information. You also need to confirm your email address and mobile number.
Step 2: Deposit Funds
In terms of deposit methods, eToro supports: Debit Card Credit Card Bank Transfer Skrill Paypal Neteller Select Cryptocurrency to Buy If you know which cryptocurrency pair you wish to buy, enter it into the search box at the top of the page.
Step 3: Select Cryptocurrencies to Buy
If you know which cryptocurrency pair you wish to buy, enter it into the search box at the top of the page.
Other Uses Of Crypto Wallets
Cryptocurrency wallets are fundamental parts of the crypto trading environment. Yet, they have some impressive applications far beyond the financial sector.
Interestingly enough, cryptocurrency wallets can store not only Bitcoin, Ethereum, and other major crypto players, but different tokens for goods and services with digital values, such as tickets, raw materials, and art.
Experts believe that in the future, crypto wallets may be even used to store identities, medical data, tax information, and voting records to give users control over their data.
Conclusion - Crypto Wallets
Choosing a crypto wallet is a personal decision. This comprehensive guide has reviewed the best crypto wallets in 2023 and they are all different to suit the needs of individual crypto users. KeepKey and Blockchain are also worth a mention.
The most critical function for a crypto wallet is security, and if possible, choose a crypto wallet with 2FA and multi-signature capabilities. Very few crypto wallets offer biometrics security, but this function adds a new level to protect your crypto assets if available.
Hot wallets are more accessible, but there's always the risk of a cyberattack on the exchange. Cold storage wallets can be costly to buy and, although there's little danger of being hacked, it is easy for a user to make a mistake, lose or damage the hardware or the printed QR codes.
Most hot wallets are free to open, and cold wallets vary between $49 to over $100.
Unless you only plan to buy Bitcoin and a few other coins, choose a crypto wallet that supports multiple digital assets.
eToro – Best Crypto Wallet Today
FAQs Crypto Wallet
What is the best crypto wallet?
The best crypto wallet is reasonably priced, with a good security level, beginner-friendly, and an intuitive interface. Some of the best crypto wallets on our list are Coinbase, Electrum, Ledger, eToro wallet Exodus, Trezor and Mycelium.
How do I choose the best crypto wallet?
Weigh up the pros and cons of the crypto wallets you are interested in using. Read plenty of reviews to see how other crypto users experience the wallet. A good checklist for the best crypto wallet is the following: Safety - This must be the primary concern for choosing a crypto wallet. Wallets with 2-factor authentication are far more secure than wallets without these security features.
How do I buy a cold storage crypto wallet?
Most cold storage wallets are available to buy from online stores such as Amazon, or you may also be able to buy from a physical store in your location that sells computer equipment
Is it safe to leave my cryptos on an open exchange?
No, It is not safe to keep your cryptos on an open exchange. When you're trading on a crypto exchange, you take your crypto out of your wallet. But as soon as you finish trading, immediately transfer your crypto back to your wallet, where it is more secure.
Can bitcoin wallets be hacked?
Just like with fiat money, your bitcoins can be lost or stolen. Though cold wallets are considered safer than hot wallets, they are not perfect. Hackers can access your cryptocurrency using different methods, such as hacking your device, installing keyloggers or Trojans, and using browser extensions to extract data. Some hackers may also bypass your two-factor authentication, publish fake ads or wallet services, and send you phishing emails. Make sure to use antivirus software, keep your devices and PINs safe, and be vigilant about scams and frauds.
Is there a crypto wallet that can support all cryptocurrencies?
Though there are numerous multi-currency wallets out there and technology keeps evolving, there is no single crypto wallet that can support all cryptocurrencies. For some cryptos, you even have to get their respective wallet.
Can third-party wallets steal my cryptocurrency?
Any company that you’ve entrusted with your data and funds may turn to malicious behavior or collapse. Thus, always look for established wallets, learn more about the technology they provide, and read reviews to choose the best crypto wallet out there.