Have you ever wondered how cryptocurrencies are stored? Are you finally overwhelmed by all the hype going around? Have you decided to give crypto a GO, but you are not sure where to start?
If yes, stick around as we dive into the different kinds of crypto wallets and their pros and cons. Also, check out our top picks for the best cryptocurrency wallets for 2022.
What is a crypto wallet?
First of all, what exactly is a cryptocurrency wallet? Same as a bank account, a crypto wallet is a digital storage for crypto assets.
There are several different kinds of crypto wallets, and they all come with their advantages and disadvantages. Most of them are software or web-based. However, there are also physical hardware wallets that you can connect to your PC via USB.
Top 9 best crypto wallet apps
Not all crypto wallets are created equal. While there is no best wallet for crypto, some are better than others when it comes to security and features.
This hot wallet is part of the Coinbase exchange, and you can choose between a hosted or self-custodial. The mix of security and functionality makes this wallet one of the best overall.
Trezor One/Trezor T
As a hardware wallet, the Tresor is one of the most secure crypto wallets out there. And even if you lose your device, your coins are safe, thanks to your personal offline recovery seed.
One of the most popular crypto wallets, Exodus, is a hot wallet that can be used on desktop as well as on mobile.
Starting out as a browser extension, Metamask can be connected to any blockchain network, making it one of the most versatile crypto wallets out there.
As one of the oldest cryptocurrency wallets, Mycelium has stood the test of time and proven to be one of the best. Mobile-only, it only supports Bitcoin, Ethereum, and ERC-20 tokens. However, we love the fact that it is completely open-source.
Supporting 53 different blockchains, in addition to a wide range of cryptocurrencies, you can also hold NFTs on your Trust Wallet. In addition to being one of the safest hot wallets, it also features a Web3 browser with an integrated DEX(Decentralized Exchange).
Ledger Nano X/Nano S
The Ledger Nano S was the first hardware wallet, pioneering the way crypto is stored in the long term. While beginners might find it overwhelming, the Ledger Nano supports a vast range of cryptocurrencies and, by many, is considered the safest crypto wallet.
In addition to security, the custodial wallet offered by the Binance exchange provides advanced features like Liquidity Farming, Staking, and Pool Mining. If you are a fan of altcoins, you will love Binance for the huge variety it offers.
This one is for the purists. Electrum is a bitcoin-only wallet that has been around since 2011. With support for hardware wallets, it is our favorite one for keeping just Bitcoins without the mixup of altcoins.
The difference: Hot vs. Cold wallets
All crypto wallets fall into 2 categories: Hot or Cold wallets.
What are hot wallets?
Hot wallets are wallets connected to the blockchain network at all times, therefore requiring a constant internet connection.
As the most common type of crypto wallet, hot wallets are used for day-to-day transactions and cryptocurrency trading. Hot wallets are software wallets and can be either desktop or mobile-based.
What are cold wallets?
A cold wallet is an offline wallet that you only connect to the internet when making a transaction. This makes them much safer than hot wallets.
One of the most popular crypto hardware wallets is the Ledger crypto wallet, with its two models, Nano X and Nano S. With a hot wallet, you can make any transaction right away.
On the other hand, however, you can only send coins to the wallet with cold wallets. If you want to spend coins on your cold wallet, you first need to transfer them into a hot wallet by importing the cold wallet’s private keys or seed phrases.
This is why hot wallets are better for regular use and transactions, and cold wallets are better for long-term storage.
What are hosted wallets?
Wallets that have their private keys stored and managed by a third party are called hosted wallets. Just like money in a bank account, the custodian of your private keys keeps your coins safe for you and available at any time.
Perfect for beginners, hosted wallets can be used for trading various cryptocurrencies. However, crypto has much more to offer, and more advanced users might want to switch to self-custody wallets to get the full benefits.
What are self-custody wallets?
As the name implies, self-custody wallets are wallets that third parties do not manage. If you are the wallet owner, you are the sole holder of the wallet’s private key and seed phrase. This puts you in total control of your crypto assets.
You also have the responsibility of keeping your private key and seed phrase safe. In addition, not all wallets have an option to buy or trade cryptocurrencies integrated into them, so you might need to acquire your coins elsewhere and then transfer them to the wallet.
What are some popular wallets for altcoins?
At the moment of writing this, there are more than 10.000 cryptocurrencies out there. With a wide range of networks and blockchains and a massive choice of crypto wallets, storing and tracking your crypto assets can sometimes get tricky.
If you prefer altcoins instead of Bitcoin, consider the following wallet choices, and you cannot go wrong.
If you like trading more than just “hodling,” the best option would be to keep your altcoins on a wallet hoster by the crypto exchange of your choice. This way, you have more flexibility in managing your cryptocurrencies while also enabling secure storage for them. Some of the most popular exchanges include:
This is one of the most popular choices for storing altcoins. Metamask was primarily released as a browser extension, but you can also use it with your smartphone app too.
With the possibility to sync between the browser and the app, you can access your wallet from both your pc and smartphone.
To wrap up
There are a lot of cryptocurrencies out there, and choosing the right wallet for you can be difficult. If you are a beginner just dipping his toes into crypto, we recommend keeping your coins on a wallet hosted by the cryptocurrency exchange of your choice.
Are you feeling ready to dive deep into the crypto world? We are here to help you. Feel free to contact us to get your financial freedom by investing in crypto.