It’s no secret, cryptocurrency is becoming increasingly more popular. In just the last few years, we’ve seen numerous digital currencies enter the market, many of which have skyrocketed in value! If you invest in crypto currency, you’ll want to keep your money in the best crypto wallet possible.
There’s a lot that goes into making a crypto wallet the best crypto wallet out there. From safety, to availability of funds, there are numerous variables one must consider before determining which wallet is right for you. We’ll cover everything about digital wallets below, and will compare the pros and cons of crypto wallets.
Quicklook: Best Crypto Wallets
- Coinbase — Best Multipurpose Wallet
- Exodus — Best Crypto Wallet for Beginners
- Trezor — Safest Crypto Wallet
- Mycelium — Best Mobile Wallet
- Ledger — Best Hardware Wallet
Table of Contents
- Best Crypto Wallet Options
- What Is a Crypto Wallet?
- How Does a Crypto Wallet Work?
- What to Consider With a Crypto Wallet
- Types of Crypto Wallets
5 Best Crypto Wallet Options
Now with that housekeeping out of the way, let’s explore the 5 best crypto wallets!
Coinbase
Coinbase is a mobile and web wallet, that’s been increasingly gaining in popularity. This wallet is available in over 100 countries.
With this wallet, you can securely buy, sell, and transfer cryptocurrency.
Type of Wallet: Mobile and web wallet.
Standout Features: Coinbase is one of the most popular crypto wallets.
Benefits:
- Offers a wide range of cryptocurrencies.
- Easy to use system.
- Coinbase carries insurance in case the software is ever hacked or broken into.
Disadvantages:
- Higher fees to buy/sell cryptocurrency.
- Coinbase does not support margin accounts.
- There is a minimum opening balance requirement.
Pricing: There is a 1.49% fee on US wallets.
Exodus
Best Crypto Wallet for Beginners
Exodus is a desktop, mobile, and hardware crypto wallet. This wallet allows its users to send, receive, and exchange over 100 crypto currencies.
Type of Wallet: Exodus is a hot wallet.
Standout Features: One of the best features of this wallet is the fact that they offer 24/7 live human support!
Benefits:
- Over 100+ crypto currencies are available on the platform.
- Fantastic customer support.
- Gorgeous user interface.
Disadvantages:
- The software is a closed source.
- Does not support a two-step authentication.
- There are high transaction fees.
Pricing: Exodus is on the expensive side, there are high transaction fees and certainly lower cost options out there.
Trezor
Trezor is a well known and respectable crypto hardware wallet. These devices plug into your computer and with a password, you can easily access your crypto currencies.
There are numerous Trezor devices available for purchase.
Type of Wallet: Trezor is a cold wallet as it is a hardware wallet.
Standout Features: Trezor is well known and respected for its security!
Benefits:
- If your cryptocurrency is worth a lot of money, you want the most secure wallet possible.
- Trezor supports an incredibly wide range of cryptocurrencies.
- There are regular firmware updates, staying ahead of any security risk.
Disadvantages:
- Like any cold wallet, you need to actually have the hardware to access your currency.
- You need to purchase the wallet itself, which could be costly.
Pricing: There are numerous Trezor options. You can buy one for as little as $60, or upwards of $700!
Mycelium
Mycelium is a great mobile wallet. Both iOS and Android phones can support the Mycelium app.
This app is great for those that have crypto experience.
Type of Wallet: Mycelium is a hot wallet.
Standout Features: Crypto investors who appreciate QR codes will likely say that it is Mycelium’s most standout feature.
Benefits: In addition to the QR code security feature, common benefits include:
- Incredibly high security as this wallet can also function in an offline mode.
- It’s free to start.
Disadvantages: The biggest disadvantage with Mycelium is how complicated the software is. As mentioned above, it’s great for those with experience in the crypto market.
Pricing: There are fees when mining, but the download itself is free.
Ledger
Ledger is similar to Trezor. Both of these wallets are hardware wallets that provide superior security.
Type of Wallet: Ledger is a cold wallet.
Standout Features: Ledger supports over 1500 cryptocurrencies!
Benefits:
- Superior security.
- Great, sleek design.
- The hardware works on mobile, tablet, desktop, and laptop platforms.
Disadvantages:
- The Ledger has limited storage.
- Purchasing the hardware can be expensive.
Pricing: There are various hardware options you can choose from, but generally speaking, the hardware will cost you a few hundred dollars.
What Is a Crypto Wallet?
Before diving into the best crypto wallet on the market today, let’s get some housekeeping out of the way starting with definitions. What is a crypto wallet?
A crypto wallet is a digital wallet that keeps your passwords and keys secure. Cryptocurrency lives on the blockchain, so the actual currency will not be kept within the wallet.
However, your passwords and keys to access your cryptocurrency on the blockchain will be kept in a digital wallet. Without your password and keys, you cannot access your cryptocurrency!
There are plenty of horror stories out there where someone has accumulated a large amount of wealth in cryptocurrency, but forgot their password. As a result, this wealth is essentially lost.
How Does a Crypto Wallet Work?
A crypto wallet is an app that you can have on your smartphone, computer or tablet, or it can be something that you physically plug into a device. You’ll log into the wallet via a secure username and password, and once inside, you’ll have access to your passwords and keys to access the various cryptocurrency you own.
Each username will have a unique identifier, which will be used if you ever wanted to receive or transfer digital currencies to a friend or business.
What to Consider With a Crypto Wallet
There are numerous variables one must consider when selecting the best crypto wallet. Such variables include:
2-Factor Authentication
A 2-factor authentication, also a 2-step verification, is when two passwords are actually required to access the crypto wallet.
For instance, if the digital wallet you choose is an app on a smartphone, you may enter your password immediately following clicking on the app. Once your password has been cleared, the app will require another form of verification.
The app can either email or text you a code, and that code will need to be entered to complete the second step verification. Once both steps have been successfully completed, you can access your crypto wallet.
Multi-Signature Support
A multi-signature support, also known as multisig or vaults, refers to when transactions need at least two private keys to complete. Imagine if you had a safe that had numerous locks on it. In order for the safe to open, you’d need to have at least two keys for the locks.
Some multi signature wallets require two keys to access the funds. Others require three, or even five keys! The more keys the wallet requires, the more secure the wallet is.
Usage
To fully understand what the best crypto wallet is for you, you must understand how you plan on using your digital wallet. Some wallets have restrictions, such as cleaning periods or transfer limits.
Other wallets are not ideal for spending the cryptocurrency and function more as an investment wallet.
Exchanges
There are three different cryptocurrency exchanges. These exchanges include:
- Decentralized exchanges
- Centralized exchanges
- And a hybrid of both
Each exchange comes with a list of pros and cons. You must determine which exchange is best for you and then ensure your digital wallet is ideal for that specific exchange.
Multi-Currency vs Single-Currency
There are quite a bit of crypto currencies out in the market today. From Bitcoin to Dogecoin to Ethereum – new currencies are popping up quite frequently.
Be sure to check which currencies your digital wallet supports. If you want to invest in Dogecoin, but your wallet only supports Bitcoin and Litecoin, you’ll need to find a wallet that supports what underlying currency you want to invest in.
QR Scanning Capabilities
Another security measure is when the digital wallet has a QR scanning capability. Before a transaction can be complete, the app will require you to scan a secure QR code.
Once the code is scanned, the transaction can be completed securely.
Types of Crypto Wallets
Not only do the above variables need to be considered, the types of crypto wallet also needs to be taken into consideration.
Hot Wallets
A hot wallet is a type of wallet that lets the wallet holder send and receive cryptocurrency tokens. Hot markets are linked to the internet, which does in fact present a security risk.
There are numerous hot wallet types. These hot wallet types include:
Web Wallets
A web wallet is typically a website. This website or web service will be encrypted, and will store sensitive information such as passwords and keys.
You can access these wallets from anywhere, which is one of their biggest advantages.
Desktop Wallets
Unlike a web wallet, a desktop wallet is physically installed on your computer desktop. You can only access your wallet from that specific desktop.
Once accessed, you can send and receive cryptocurrency.
Mobile Wallets
A mobile wallet is similar to a desktop wallet but stored on your mobile device.
Cold Wallets
A cold wallet is also referred to as a hardware wallet. These wallets tend to be more secure as they do not connect to the internet.
Instead, they are hardware that you must plug into your computer or device to access the wallet.
Hosted Wallets
Hosted wallets are when a third-party financial institution hosts the wallet for the user. These wallets tend to be more user friendly, and will still allow a great deal of freedom for the user to access their digital currency.
Decentralized Wallets
A decentralized wallet does not rely on a third-party host. To access the wallet, you must have the ‘keys’. Anyone with the keys can access the wallet, and can send or receive cryptocurrency.
There’s a Lot to Consider
There is so much to consider when investing in cryptocurrency. Without a doubt, cryptocurrency is gaining in popularity, and millions of people throughout the country foresee cryptocurrency being the currency of the future.
With that said, we are still in the infancy stages of embracing this currency. There is still a great deal of risk when investing in the crypto market.
Understanding what crypto currency fits your investment needs/goals may take the work of a financial advisor. Although these are not traditional investments, many modern financial advisors have done their fair share of research on the crypto market and can help you identify a currency that fits your investment style.
A financial advisor will not only help you identify the right investments, they’ll also help you create and implement a budget.
Frequently Asked Questions
The purpose of a crypto wallet is to keep your passwords and keys secure. Remember, a wallet does not physically store the cryptocurrency, but it stores the information you need to access your currency on the blockchain.
If you invest in crypto, you should absolutely have a wallet!
Trezor is one of the most, if not the most secure crypto wallet.
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