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Cryptocurrency is notoriously risky, but if you want in, one of the best crypto wallets can help you protect your investment. While you can use a crypto exchange to store your holdings, exchanges are often targeted by hackers. Security breaches at well-known crypto exchanges have resulted in the loss of hundreds of millions in user assets in just the past couple of years. Accounts with crypto exchanges are also custodial, which means the crypto exchange holds the keys to your crypto assets, not you.
A crypto wallet not only serves as a secure place to keep your virtual currency but also allows you to maintain total control over your assets. Cryptocurrency wallets come in many forms. Cold wallets store your digital coin safely off-line on small flash-drive-like sticks. Hot wallets keep your digital currency readily available via software on your computer or an app on your tablet or smartphone. In this guide, we’ll examine both hot and cold crypto wallets while reviewing some of the best crypto wallets on the market.
— Best Overall: Ledger Nano X
— Best for Beginners: Coinbase Wallet
— Best Bitcoin Wallet: Electrum
— Best Security: Trezor Model T
— Best for Mobile: Mycelium Crypto Wallet
How We Chose the Best Crypto Wallets
In reviewing more than 20 crypto wallets for our list of the best, I considered various criteria, including user functionality, security, and cost. Since the point of crypto wallets is to create a secure place to keep your cryptocurrency, I selected mainly models with such security features as two-factor authentication, open-source code, multi-signature support, and biometric access (fingerprint and facial recognition).
I also favored wallets that supported various cryptocurrencies and feature interfaces that were intuitive for both advanced and beginner users. I also leaned toward wallets that allow you to execute transactions from within the wallet.
In addition, I included options with hot and cold storage. A hot wallet maintains a continuous connection to the internet, making the cryptocurrency stored on it easy to access for those who trade often. However, since a hot wallet is always online, it is more susceptible to hackers. Cold wallets store your digital keys off-line, making it impossible for hackers to steal them. The downside is cold wallets don’t grant quick access to your cryptocurrency. Also, if you happen to lose your crypto wallet and don’t have the private key backed up, you’ll lose access to your cryptocurrency permanently.
Cost was also significant. For cold wallets, I considered the upfront price for the wallet. For hot wallets, I leaned toward those that charge less for processing transactions to and from the account. I also chose several wallets that offer customizable transaction fees.
The Best Crypto Wallets: Reviews & Recommendations
Best Crypto Wallet Overall: Ledger Nano X
Why It Made The Cut: A secure off-line environment, features that add portability, and the ability to hold 100 cryptocurrencies make the Ledger Nano X one of the best crypto wallets on the market.
Specs:
— Hot or Cold Storage: Cold
— Crypto Assets: 100
— Weight: 1.1 ounces
— Screen: 128 x 64 pixels
Pros:
— Stores up to 100 cryptocurrencies
— Secure off-line cold storage is hacker-proof
— Bluetooth capability and battery make this crypto wallet portable
Cons:
— The small display can be hard to read
— Two-button controls make setup very tedious
The Ledger Nano X is a significant upgrade from Ledger’s Nano S, which debuted in 2016, with its larger storage capacity, bigger display, and enhanced portability.
While the Nano S holds only three currencies, the Nano X can store 100. The X also allows you to manage your portfolio on the go by connecting to your smartphone via Bluetooth. This feature is lacking on the Nano S, which requires users to connect to a desktop computer via a USB cable to view their portfolio. The Nano X also adds a battery, a feature lacking in the Nano S, giving you the ability to use the wallet on the go without the need to plug it into a power source.
In terms of design, the Nano S and X are both about the size of a flash drive, with the X being slightly larger. While both have tiny displays, the Nano X’s 128-by-64-pixel screen is markedly larger than the Nano S’s 128-by-32-pixel display, making it easier to read without squinting.
Accessing the Nano X, like the S, requires you to enter a PIN code of at least four digits, which is a nice security feature. Two buttons allow you to scroll through various options or apps. This interface makes the Nano X surprisingly easy to use, though setting it up is very tedious.
While you may have heard about the Paris-based Ledger security breach by hackers in 2020, it’s important to note that, while the hackers got ahold of clients’ names, emails, addresses, and phone numbers, they were unable to get their hands on customers’ cryptocurrencies.
That’s mainly because, unlike crypto wallets that connect to the Internet, the Ledger Nano X, like the Nano S, secures your private keys off-line. Of course, off-line security is also crucial, and Ledger’s Blockchain Open Ledger Operating System (BOLOS) gets a high CC EAL5+ rating from France-based cybersecurity agency ANSSI, ensuring your security keys are safe from off-line as well as online attacks. For a less risky investment, here are the best crypto gifts.
Best for Beginners: Coinbase Wallet
Why It Made The Cut: Like its exchange, Coinbase’s crypto wallet has a user-friendly interface and is one of the most secure platforms on the market.
Specs:
— Hot or Cold Storage: Hot
— Platform: Android, iOS
— Number of Currencies: More than 500
Pros:
— Easy-to-use interface that beginning investors will appreciate
— Supports more than 500 different coins
— A reputable company that insures customers’ assets
Cons:
— Available only on mobile devices
— Same security vulnerabilities as other hot wallets
It makes sense that the best crypto wallet for beginners goes with the best exchange for beginners: Coinbase. Like its exchange, the wallet offers an easy-to-use interface coupled with excellent security.
Coinbase Wallet functions as a hot storage option. You can download it as an app for iOS or Android devices. Once set up, you can transfer funds from Coinbase’s exchange or a third-party exchange to Coinbase Wallet.
Coinbase Wallet uses a three-tab layout and simple functions that make it easy to navigate. You can connect it to most bank accounts, and it supports more than 500 crypto assets. For Coinbase Exchange users, using Coinbase Wallet is a no-brainer, as transferring funds between the two is very simple.
Why do you need Coinbase Wallet if you trade on Coinbase’s exchange? Coinbase’s exchange is custodial, meaning Coinbase, and not you, holds the keys to your cryptocurrency funds. This is a deal breaker for crypto traders who believe you’re not the real crypto coin holder unless you possess the security keys.
In comparison, Coinbase Wallet is noncustodial, so only you have access to the private keys, which you create by generating a 12-word recovery phrase. An optional cloud backup provides additional protection for digital keys.
While it’s important to understand that Coinbase Wallet is a hot wallet, which doesn’t make it immune to hacks, Coinbase has an excellent reputation for keeping its platform secure. Its exchange has never been hacked, and it uses advanced biometric security technologies such as the Secure Enclave chip, which requires Face ID and Touch ID for secure authentication.
Best Bitcoin Wallet: Electrum
Why It Made The Cut: With security measures and features specific to Bitcoin, we couldn’t find a better wallet for those who trade in the top cryptocurrency.
Specs:
— Hot or Cold storage: Hot
— Platform: PC
— Number of Currencies: 1 (Bitcoin)
Pros:
— Various transaction-fee options
— Bitcoin-specific security features
— Easy to set up
Cons:
— Only supports Bitcoin
There isn’t another crypto wallet that knows Bitcoin better than Electrum. After all, the crypto wallet has been dealing exclusively in Bitcoin since 2011. Electrum is the best Bitcoin wallet because it tailors its security features to meet this cryptocurrency’s specific needs.
Electrum is easy to set up, though its interface is a little advanced for beginning crypto traders. One of its coolest features is its adjustable fees, which allow the user to determine how much they pay based on how long they are willing to wait for a transaction to be complete. Transacting Bitcoin on Electrum is also fast, thanks to its use of a lightweight client, which takes up less space on your computer than other wallets, speeding up transactions while still maintaining tight security.
Electrum also has several attractive security features. You can integrate it with a cold storage wallet for an optional added layer of security. Electrum is also an open-source wallet, which adds transparency and helps build trust with customers, and it uses advanced security features such as two-factor authentication and multisignature support.
Safest Crypto Wallet: Trezor Model T
Why It Made The Cut: A full-color touch display, enhanced security, and the ability to make exchanges and purchases directly from the wallet put the Model T in a league of its own.
Specs:
— Hot or Cold storage: Cold
— Platform: Windows, Linux, Android
— Number of Currencies: More than 1,000
Pros:
— Added security features
— Supports more than 1,000 currencies
— Full-color touch-screen display
— Ability to trade and exchange directly from the wallet
Cons:
— Doesn’t support iOS
— Very expensive
Crypto investors looking for the safest crypto wallet that money can buy should look no further than the Trezor Model T. While the Model T may be one of the most expensive wallets on the market, its interface, security features, and ability to execute transactions make it worth the additional cost.
The Model T requires a PIN to access the wallet and allows you to add a passphrase to access different parts of the wallet. The Model T also uses a 24-word recovery phrase instead of the standard 12-word recovery phrase, making it harder for unauthorized users to access your assets.
The company also releases all its hardware specs and software code under an open-source license, giving it transparency that adds to its security and customer trust. You can also use the app to configure two-factor identification.
One of the Model T’s nicest features is its ability to buy cryptocurrencies or convert a cryptocurrency directly through the wallet. The wallet is also easy to set up, thanks to step-by-step instructions and a helpful FAQ section on the company’s wiki that clearly explains how to make purchases and exchanges.
The Model T’s display is also an attraction. It’s larger than that of other cold storage wallets and uses a full-color touch screen that gives it a more sophisticated feel while making it easier to operate than those that use buttons.
One note: The Model T does not support Bluetooth, which may be an advantage depending on how you feel about Bluetooth security.
Best for Mobile: Mycelium Crypto Wallet
Why It Made The Cut: We love Mycelium’s ability to send and receive Bitcoin directly through the wallet and its compatibility with cold storage wallets, which adds an extra layer of security.
Specs:
— Hot or Cold storage: Hot
— Platform: iOS, Android
— Number of Currencies: About a dozen
Pros:
— Compatible with cold storage wallets
— Can receive and send Bitcoin through the wallet
— Customizable fee system
Cons:
— Supports a very limited number of currencies
— Very little instructional literature
Having launched way back in 2008, Mycelium has been around since the dawn of the cryptocurrency era. It’s a mobile-only wallet that supports both iOS and Android devices. While it supports only a handful of coins, including Bitcoin, Ether, and a smattering of ERC-20 tokens, it has several attractive features.
With Mycelium, you can buy and sell Bitcoin directly through the app, thanks to its use of the Simplified Payment Verification technique, which allows it to confirm transactions without having to download the whole blockchain.
Like a few other crypto wallets on this list, Mycelium is also open source, which means one can view its source code and compare it with the original code to detect potential security breaches. It also offers multiple levels of PIN protection for added security.
Other useful features include the ability to customize transaction fees based on the urgency of the transaction, with low priority, normal, economic, and priority options. Mycelium is also compatible with some of the most popular cold storage wallets, allowing you to keep your cryptocurrency in secure storage while using the Mycelium interface.
While all these features make Mycelium an excellent app-only crypto wallet, its interface can be harder to navigate for crypto wallet newbies. This steep learning curve is made steeper by the fact that the company provides little in the way of instructional material.
Things to Consider Before Buying a Crypto Wallet
Type: The main reason for purchasing a crypto wallet is to protect your portfolio of cryptocurrencies, so naturally, security is paramount. Consider whether you’re comfortable with the protection offered by a hot wallet, which is based online, or if you need the advanced security of a cold wallet, which stores your crypto keys entirely off-line.
Currencies: Consider how you plan on trading cryptocurrency. Some wallets support hundreds of currencies, while others support only one or two. Choose a crypto wallet that supports the virtual currencies you plan to trade.
Interface: Look for a crypto wallet that uses an intuitive, user-friendly interface that won’t force you to spend hours reading literature to figure out how to perform basic transactions. Make sure the wallet you choose comes with instructional material that clearly explains how to use it.
FAQs
Q: Which crypto wallet has the lowest fees?
There is no set single fee for a crypto wallet. Fees generally vary based on the crypto exchange you use for transactions. That said, crypto wallets do offer services that allow the user to pay additional fees for speeding up a transaction.
Q: What’s safer, a hardware wallet or software wallet?
A hardware wallet, or cold wallet, is safer because it stores your cryptocurrency keys off-line, making it impossible for hackers to access them. That said, there are still security issues with a hardware wallet. If the user loses cold wallet keys, there is often no way to recover access to the cryptocurrency stored on the wallet.
Q: Is a crypto wallet actually necessary?
Technically, no. You don’t need a crypto wallet to make trades on cryptocurrency. Most exchanges allow you to store cryptocurrency in a wallet located on the exchange. Whether you should use an exchange for all your storage needs is the subject of hot debate. While some say an exchange exposes your currency to potential hackers, others point to the high security measures reputable exchanges use to protect your cryptocurrency. A wallet also gives you the keys to your account, whereas an exchange wallet places the keys in the exchange’s hands, allowing it to freeze your account if it's deemed suspicious.
Q: How do crypto wallets work?
A crypto wallet works by storing your private keys, thereby keeping your cryptocurrency safe and accessible to you. Unlike a traditional wallet that holds paper money, a crypto wallet doesn’t contain your digital currency, which lives on the blockchain. It instead stores the security keys that give you access to it. Lose the keys and lose access to your digital currency.
Hardware wallets, or cold wallets, consist of a thumb-drive device, which you plug into your computer or connect via Bluetooth when you want to spend or trade your crypto. Hot wallets store your keys on an app, on a website, or in software on your computer via two-step encryption. By keeping your keys online, you can send and receive your crypto more quickly than with a cold wallet; however, your assets are more susceptible to hackers.
Q: How do I buy a crypto wallet?
That depends on the type of crypto wallet. For a crypto wallet that uses a desktop computer or app, you’ll need to download and install it. For a physical cold storage crypto wallet, you’ll need to purchase it online from the manufacturer or a retailer and have it shipped to you.
Q: What is the safest crypto wallet?
Cold storage wallets are the safest crypto wallet because they store your cryptocurrency off-line and out of reach of potential hackers. If you plan on storing large amounts of coins for any length of time, you should do so using a cold storage wallet.
Final Thoughts
A crypto wallet serves as a secure holding place for your virtual currency. With that in mind, it’s crucial to choose a wallet that you feel comfortable using. With its off-line security, user-friendly interface, and ability to work with more than 100 different currencies, the Ledger Nano X is one of the best crypto wallets on the market.
This post was created by a non-news editorial team at Recurrent Media, Futurism’s owner. Futurism may receive a portion of sales on products linked within this post.
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