Nowadays, simply doing a google search for ‘wallet’ gives you top results for a bitcoin wallet, and the wallet choices are limitless. Before you start trading cryptocurrencies, there are some essential things you need – a cryptocurrency wallet is one of them. So, if you’ve ever experienced choice overload by the sheer amount of cryptocurrency wallets out there, and are unsure where to begin with choosing a wallet, read on.
Though before we begin the list, it should be noted that there is no single “best” wallet and a lot depends on your requirements. The cost, security, mobility, user-friendliness and the coins you’ll be trading are just some of the many factors you might want to think about before you choose. In this list, we’ll be covering some of the many types of wallets and give a brief summary for each.
Cold wallets, meanwhile, are stored offline for additional security - think: a safe or a physical wallet you carry with you daily. Methods of cold storage include: USB drives, paper, or other form of data storage.
They’re generally better for holding your coins for the long term, so if that’s what you’re going for, you might want to choose a type of storage that you won’t lose and can keep in a safe place. If you decide to go with a paper wallet, WalletGenerator is a very straightforward starting place as it has a very user-friendly guide and supports up to 200 crypto currencies.
Hot Wallet vs Cold Wallet
To put it briefly: the difference between a “hot” and a “cold” wallet is whether or not they’re connected to the internet.
Generally speaking, hot wallets are less secure because of the threats that come with being connected to the internet (hacks, security, privacy issues, etc.). Hot wallets are generally better for day-to-day transactions and trading since you can transfer to GDAX instantly without any fees, and make quick purchases with fiat. When picking a hot wallet, Coinbase is a great online starting wallet, since it’s an online web-based wallet with a good user-friendly interface.
Hardware wallets are probably the safest investment you can make when picking a crypto wallet. Though, at the cost of it being less user-friendly and more expensive than other forms of wallets, the Ledger Nano S, a USB sized hardware wallet, is specially designed for cryptocurrency. Some of its core features include a backup seed key, a multi-currency support, a built-in display with an LED screen and operable buttons, and above all an extra emphasis on security for which there are multiple options (PIN code, backups, etc.).
At a starting price of ~$80, the Ledger Nano S protects you against most computer failures, hacks, and allows you to recover your wallet should it get stolen. The Ledger can store Bitcoin, Ethereum and other altcoins.
Mobile wallets are pretty straightforward: they run on your phone (through apps), and can be used anywhere. Mobile wallets are smaller, more lightweight and convenient, compared to desktop wallets. Features include being able to scan QR codes, receive, accept and send payments while on the go, and they take up less space as well. Nevertheless, they have some risks as well, after all, losing your phone could mean losing your access to your wallet.
Depending on the coins you’re going to be dealing with, Coinomi is a great multi-currency wallet available for both, iOS and Android, and supports major coins like BTC, ETH, LTC, DASH, and more.
Though desktop wallets are technically hot wallets, since they’re also connected to the internet, they still remain as one of the most popular wallet types. As far as desktop wallets go, Exodus is one of the best multi-currency crypto wallets that supports Windows, Mac and even Linux. Exodus is an easy to use software with a colorful user interface that is easy to learn and even has a reporting system as well.
Exodus also has shapeshift.io exchange built in inside which allows you to exchange your cryptocurrency instantly and a portfolio tracker to look after your coins with a live chart. The wallet has a slick look. Though they support only 8 coins so far (BTC, LTC, DOGE, ETH, DASH, GNT, REP, DCR), Exodus staff says they’re only interested in assets that are on shapeshift, and are in the top 20 for market cap, so it is likely that they will add more coins support in the future.
At the end of the day, the only way to overcome choice overload is to simply pick one wallet and then go from there. Especially if you’re still not sure what exactly you’re looking, once you decide, you’ll realize what makes a specific type of wallet subpar or stand out.
In other words, once you try your hand at the different types of wallets, you’ll start to realize what works for you and what doesn’t. And as you gain more experience, you’ll be able to pick things up as you go and learn as you go.