There is no escaping it – cryptocurrencies are here to stay. Whether you are a crypto-trading expert or someone just looking to start out, getting yourself a cryptocurrency wallet to store your coin is a necessary part of your journey.
Of course, for the beginners amongst us, it can be a little confusing knowing where to start and when it comes to choosing the safest cryptocurrency wallets, making a wrong decision can cost you dearly.
That’s why in this article we have decided to provide you with a full lowdown on all of the information that you need to know- where/how/why/what/and which cryptocurrency wallet is best for you.
In a world where online safety, privacy, and security is paramount as well as an ongoing concern, keeping your cash safe and secure against the ever-growing threat of cyber-attack is paramount.
So, without further ado, let us give you the ins and outs of cryptocurrency wallets and the options on the market and available to you.
What Is a Cryptocurrency Wallet?
If you are a real cryptocurrency beginner, then all this fancy and techy sounding jargon could be a little confusing. In short, a cryptocurrency wallet is pretty much the same concept as a physical wallet – the only difference is the cash it contains is digital, and you can’t put it in your pocket in the same way.
A cryptocurrency wallet is a digital wallet that keeps your digital/alternative/cryptocurrencies safe and secure. It is password protected so only you can access it and there are different types (which we will explore later) available depending on your needs and requirements.
From cold storage to a desktop, mobile, hardware, and software options – there is a cryptocurrency wallet to suit you.
Although we have used the word “store” to describe the function of a crypto-wallet, we better explain that it doesn’t store your money there.
Instead, it provides you with a private key (a secure, digital code which is only known by you and your wallet) which is stored in the wallet and shows the ownership of a public key (a public code which is connected to a certain amount of your currency of choice).
In other words, your wallet stores your private and public keys and allows you to access your funds, as well as provides a personal ledger of transactions for your information and records.
But a cryptocurrency wallet doesn’t just ”store” your money safely; it allows to you send and receive as well. Either via email, QR code, or through sharing a hash- you can transfer your cash to colleagues, friends, vendors, suppliers, or service providers- as long as they accept the cryptocurrency that you are using.
Remember that you cannot use cryptocurrencies without a wallet, so picking one that suits you should be one of the first things that you do!
What Makes a Cryptocurrency Wallet Safe?
So why should you put your trust in a digital wallet? We put our faith in banks every single day, but they tend to have a long history and are regulated by the government and various authorities. And, the whole thing with cryptocurrencies is that they are completely decentralised, and therefore it follows that wallets play to the rhythm of their song as well.
So where does this leave you and how do you know if your cryptocurrency wallet is safe?
First up you need to make sure you are using a wallet with a good reputation. Stick to well-known brands (we will discuss this in detail below) and always try to read some reviews from others that have used the service and provided some feedback.
Make sure you read about it and fully understand how it works and what your obligations are. After all, this is your money at stake.
You also need to consider which type of wallet will work best for you – do you need one that you can keep on your mobile? Or is it safer for you to have an offline wallet that is only accessible via a hardware device? Based on your needs and requirements, you need to make sure you choose the most suitable option for you.
Another thing to look out for is some software solutions that present themselves as wallets but actually, contain malware that is ready to infiltrate your computer and breach your security. The best way to avoid this is to avoid any software that comes from a source that you do not know or trust – in other words, stick to well-known providers and remember that if it seems too good to be true – it probably is.
Asides from these considerations, remember that the overall security of your wallet relies on you adhering to best practices. Remember to keep only the currency you need in the wallet you use frequently and consider using Google authentication to provide you with extra layers of protection.
It is also wise to back up your crypto wallet and private keys, being sure to encrypt them. You can consider using a pen drive or a CD to do this as if you lose your wallet or keys and do not have a backup saved, you lose all of the currency connected to it.
Different Types of Cryptocurrency Wallets
As mentioned above, there are several different types of cryptocurrency wallets available depending on your needs and requirements, how much money you will be storing, what you will be using it for and of course, how much security you require.
An online wallet typically refers to a wallet that you access via an internet browser. Sometimes they are referred to as online wallets, but then this terminology can get confusing when we start to consider individual platforms that your wallet can reside on, such as a desktop or even mobile wallets.
These wallets are great as far as ease of use goes, but it would be wise not to put all of your currency in a wallet of this type because they tend to be somewhat attractive to hackers. That said, they are the quickest way to complete transactions, can handle multiple currencies, and can be used with the TOR network for optimum privacy.
Perfect for those that want to store small amounts of currency for quick online transactions, not so great for keeping all of your eggs in one basket.
A mobile wallet does precisely what it says on the tin – it is stored on your mobile or tablet in the form of an application, and it provides instant access to your cryptocurrencies wherever you are as long as you have your mobile device with you.
The beauty of a mobile wallet is that it can offer the user additional features that far surpass internet based wallets. However, they do come with a few minus points as well.
While they are practical and convenient, and great for issuing and receiving payments at any time, you must remember that mobile phones are rather insecure devices. If you lose your phone, someone gains access to your device, or your mobile is maliciously compromised in any way – you can lose access to your wallet and your funds in the blink of an eye.
One of the more secure options available, especially when compared to an online or mobile wallet – a desktop wallet is a popular choice.
There are several options when it comes to using a desktop wallet – you could opt to use your desktop wallet on a PC that is connected to the internet, or you could choose to use it on a device that is not connected – therefore as a sort of cold storage device.
The decision should be taken carefully, and based somewhat on your dedication to keeping on top of your antivirus and online security precautions. Much in the same way that we often have a spare mobile phone floating around, having an additional laptop and using it for this purpose could be a great solution.
While a hardware wallet is a little less user-friendly than a web or desktop wallet, they are much easier to get the hang of than a paper wallet, and they are often far more secure than a hot or online wallet.
A hardware wallet comes in the form of a small device, similar to a USB drive and it often has a screen. They are great and secure options for storing large amounts of currency such as savings or investments, and they offer you optimum control over your money.
The advantages are that a hardware wallet offers the best options for storing currency safely and securely, and the disadvantages are that they can be a bit tough to get to grips with for beginners, and they can sometimes be difficult to find as they tend to sell out pretty sharpish.
Before the days of hardware wallets, paper wallets were the only way of cold storing your cryptocurrencies. Hashes or keys are printed out on paper, and it is then your responsibility to keep that paper safe, as should you lose it, your currency is gone forever.
While this type of wallet is immune to hackers, it is tough to move currencies around and of course, if you spill water on your bit of paper- there is no getting it back!
The Safest Cryptocurrency Wallets
So now you have an understanding of what a cryptocurrency wallet is and the different types available, let us provide you with some insider tips when it comes to choosing the best one for you.
The following two wallets are some of the best on the market and offer excellent levels of usability and security as well as enjoying great customer reviews from happy users.
While we aren’t telling you to go for one of these, they would be an excellent place to start.
Ledger Nano S – Hardware Wallet
Ledger is a smartcard-based hardware wallet which aims to bring maximum security without sacrificing usability or control.
Offering a selection of devices at a range of price points, it has something for everyone – from cryptocurrency beginners to experts. You can choose from multi-currency hardware wallets, or Bitcoin only wallets depending on your needs.
This hardware wallet is slick and compact – pocket-sized and stylish and is cheap enough to be accessible to everyone, regardless of budget restrictions. In particular, the Nano S option is one of the most popular and secure on the market.
Price: 69.90 EUR
TREZOR – Hardware Wallet
If you are looking for a cyber bullet-proof wallet for your cryptocurrency, then TREZOR is most definitely worth a look! A cryptocurrency wallet with 2-factor authentication, a password manager, and more it offers security and protection for the storage of popular currencies such as Litecoin, Dash, and Zcash- all on one device.
It also offers Ethereum integration through its collaboration with MyEtherWallet, and it protects all of your assets with SSH login security through single or multiple sessions.
Price: 89 EUR
KeepKey – Hardware Wallet
Before moving on to the technical features, KeepKey is undoubtedly one of the coolest looking gadgets on cryptocurrency market. However, it only supports Bitcoin at the moment.
It’s relatively similar to both TREZOR and Ledger Nano S – the main difference is the material. It also comes with a simple and easy-to-use user interface.
Jaxx — Software Wallet
Jaxx is one of the first mobile wallet solutions, and it has recently introduced a version for iOS, Android, desktop and browser. It not only stores your coins safely, but it also lets you carry them around.
Jaxx uses a mnemonic seed to back up your wallet or transfer it to a different device. It also allows you to receive funds, scan QR code, view your crypto holdings, all in one intuitive app.
Advanced features such as shapeshift integration and multiple platforms wallet linkage makes this the preferred wallet for the tech-savvy. The only drawback of Jaxx is that not all features are compatible with all of the new integrations.
MyEtherWallet – Paper Wallet
This paper wallet can be generated merely online at MyEtherWallet, and all it takes you is to note your private keys. The website does not store or keep any of your private information.
Those who don’t trust the online version, can download the wallet from GitHub and run it offline.
Even though the wallet is free, it requires an in-depth knowledge of how to set it up correctly from a software aspect. Paper wallets are not generally advised to rookies.
The Final Verdict
If we had to choose between the two wallets above, when it comes to security, design, and user simplicity, we would have to opt for Ledger Nano S.
Offering by far the best level of security and usability, it is our go-to choice for storing our cryptocurrencies safely and securely. But more than that, it is the easiest to use even for the most rookie of crypto users.
With some of the best user reviews on the internet, it would seem that we are not alone in our choice, and for those that are just starting out and are unsure of what to go for, there is no better place to start than with the Ledger Nano S.
Make sure to familiarise yourself with instructions on how to create a cryptocurrency wallet, so you can avoid any mistakes!
What do you think of our choice of the safest cryptocurrency wallets? Do you think anything should be added to the list? Let us know in the comments below!
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