When you enter the crypto field as an investor, the first thing you’ll come across is the term digital or crypto wallet. Some people may immediately jump to the conclusion that it’s the digital version of a physical wallet. The assumption is not entirely wrong. Just as physical wallets store cash, credit cards or even pictures of our loved ones, digital wallets store keys, cryptocurrencies, and NFTs.
You can use your crypto wallet to send, receive and spend cryptocurrencies. Crypto wallets are made up of a bunch of codes. They are basically software applications that are stored on your computer or smartphone.
In this article, we will cover all the basic information to get you started with your crypto wallet. Then help in choosing the best crypto wallets for you. These are the crypto wallet that we will be discussing:
- Bitfinex: All In One Wallet
- Metamask- Best for Ethereum
- Ledger Nano X- Best Cold Wallet
- Electrum- Best Bitcoin Wallet
- Exodus- Best Crypto Wallet For Desktop
- Mycelium- Best For Android
- Trezor Model T- Best For Security
Different Kinds Of Crypto wallets: Hot And Cold
There are two kinds of crypto wallets:
- Cold Wallet: Cold wallets are crypto wallets that are not connected to the internet. Most hardware wallets are cold wallets. Physical Bitcoins, paper wallets or secondary offline compartments, all come under the category of cold wallets. Cold Wallets offer more security than hot wallets. However, they run the risk of getting lost by the user. Besides, they are less convenient. A cold wallet is always non-custodial.
- Hot Wallet: Hot wallets are digital wallets that are connected to the internet. Hot wallets are faster and make it quite easy to trade and invest in crypto. Since hot wallets are connected to the internet, they are exposed to online attacks. A hot wallet can be custodial or non-custodial.
Cold wallets are generally considered a safer option to store your cryptocurrency, however, there are high chances that users can forget to keep the physical devices somewhere and forget.
Categories Of Crypto Wallets: Custodial Vs Non-custodial Wallets
There are two categories of crypto wallets:
- Custodial: If you own a custodial wallet, that means your private keys are with a custodian or third party. For instance, if you get your custodial wallet from an exchange, then the exchange will be your custodian.
- Non-custodial: As the name suggests, in the non-custodial wallet, no one is the custodian of your wallet. You are the sole owner. It also means that you are now in charge for the security of your wallet and the cryptocurrencies stored in it.
Experts suggest that beginners who do not know how to protect their wallets should opt for non-custodial wallets. In this way, they wouldn’t have to stress about securing their wallet.
How To Choose Your Crypto Wallet?
Today, there are various options when it comes to crypto wallets. But, beginners often find it too difficult to find the one that suits them well? Well, let’s simplify it for you. While choosing a crypto wallet to store your crypto assets and private keys, give an answer to these questions:
- Whether you want to have a custodial wallet or a non-custodial wallet.
- Then, how do you want to store your crypto wallet: Hot or Cold.
- How many coins and tokens are supported by the wallets you are choosing.
- What are the fees or cost of purchase of that wallet?
This analysis will clear a lot of things for you and help you choose the right crypto wallet for you!
Best Crypto Wallets To Choose From:
Now, let’s look at the best crypto wallets in detail:
Bitfinex: All In One Crypto Wallet
Founded in 2012, Bitfinex is a leading cryptocurrency exchange in the crypto market. It offers three kinds of wallets:
- Exchange Wallet is for exchanging funds between currencies that Bitfinex supports.
- Margin Wallet is for trading leveraged long and short positions.
- Funding Wallet offers margin funding/financing to other traders.
This variation makes it unique from other exchanges.
Metamask: Best For Ethereum
Metamask is considered great for Ethereum. The reason being it offers easy access to thousands of tokens and dApps on Ethereum network. Here’s why you should consider opting for Metamask:
- Metamask can be linked to NFT marketplaces (OpenSea).
- It has an intuitive interface design.
- It is easy-to-use and caters to around 30 million users.
- It carries out faster transactions.
Some of the disadvantages of Metamask include not being able to store BTC and a high transaction fees for Ether at times.
Ledger Nano X: Best Cold Wallet
Ledger Nano X expands on Ledger Nano S. Though the cost of Ledger Nano S is less, Ledger Nano X has added features. Let’s have a look at these features:
- Ledger Nano X has Bluetooth features which allow transactions to take place on the Ledger Live Application.
- It also has a special hardware design to protect private keys.
- It offers a battery-life of 8 hours.
- It supports a large number of digital assets.
Cons of Ledger Nano X include privacy concerns because of bluetooth use and it is quite expensive.
Electrum: Best Bitcoin Wallet
Electrum is a hot wallet, launched in 2011. It is designed keeping in mind Bitcoin. Here what it offers more:
- It is one of the only surviving Bitcoin wallets i.e., supports only Bitcoin trading.
- It is known for offering security better than other hot wallets.
- It is fast and easy to set-up.
- It offers customizable transaction fees (Pay more to process your transaction faster).
On the downside, it is not considered suitable for beginners. Electrum also does not offer customer support via email or any other app.
Exodus: Best Crypto Wallet For Desktop
Exodus is one of the few crypto wallets that offers a desktop version. It is also considered the best crypto wallet for altcoin. Cryptocurrencies other than Bitcoin are referred to as altcoins. Exodus supports around 180 different types of cryptocurrencies. It can be an ideal wallet for you because:
- Exodus is famous for its high-speed transactions.
- It offers ease-of-use.
- It provides 24/7 customer support.
- Its updated version allows users to buy Bitcoin via Apple Pay.
Exodus lacks in few aspects. For instance, transaction fees on Exodus are quite high. It also doesn’t support native 2-factor authentication. Besides, it doesn’t have multi-signature support.
Mycelium: Best For Android
Mycelium is another well-known crypto wallet. It is considered the best crypto wallets for mobile due to its high security and advanced transaction history information. Mycelium supports Bitcoin, Ethereum and ERC-20 tokens. Let’s have a look at its characteristics:
- Mycelium offers a single address saving account.
- It is compatible with well-known cold storage solutions such as Ledger, Trezons and Keepkey.
- It also offers offline transactions.
- It also has in-app crypto exchanges and provides educational resources.
One of the main criticisms of Mycelium is that it is not user-friendly.
Trezor Model T: Best Crypto Wallet For Security
Trezor Model T is the best cold crypto wallet for people who do not want to compromise on security. Let’s look at its features:
- Trezor Model T is user-friendly, intuitive and easy-to-setup.
- It has a large colorful transaction touchscreen display.
- It supports around 1816 coins.
- It is a self-custodial wallet.
Trezor Model T is for individuals who prioritize security and are willing to pay for it since it costs around $280.
Read More: 7 Best Crypto Wallets To Not Miss In 2022