Before you buy any cryptocurrency coins, it’s a good idea to choose a wallet that protects your investment.
This means you can store and use your digital coins with confidence, knowing that nobody else can access them without the private key generated by your wallet for each address where your coins are kept.
It really is that simple. There are different kinds of cryptocurrency wallets, though – and this is where some of the confusion lies.
In this article, we’re going to focus on online wallets because these are easy to set up, highly secure and free to use.
More specifically, we’re looking at the five best online cryptocurrency wallets available in 2018 to help you start your investment in the safest possible way.
Here’s what we’ll be looking at in this article:
- Why do I need an online cryptocurrency wallet?
- What do the best cryptocurrency wallets have in common?
- Bitcoin Core
- Toast Wallet
Why Do I Need an Online Cryptocurrency Wallet?
Cryptocurrency wallets tend to get talked about as a place to store your digital coins but this isn’t strictly true.
Instead, they store private and public keys and a private key is kind of like the pin number for your credit card: you need to type it in to access your bank account and make payments in-store.
When you open an account with a cryptocurrency exchange platform, you’ll automatically get access to a wallet provided by the exchanger.
The problem these wallets is you don’t have control over the private and public keys, which means you don’t have full control over your coins.
If your exchange platform of choice is hacked, you’re at risk of losing everything and the same could be true if the exchange decides to shut down for whatever reason.
These things do happen and you don’t want to be one of those people who regrets not protecting their investment with a secure wallet.
What Do The Best Cryptocurrency Wallets Have In Common?
With new cryptocurrency wallets cropping up all the time, it’s important to know what you’re looking for.
There are certain traits you should look for in every wallet you’re considering and all of the options we’re looking at in this article have these essential qualities in common:
- Free: You shouldn’t have to pay for the wallet itself although you will have to pay certain transaction fees.
- Secure: Above all, you want to know your wallet is secure so always check the track record of the providers you’re looking at.
- User-friendly: You want to make it hard for other people to access your coins, not yourself.
- Accessible: You should choose a wallet that is always accessible when you need it (eg: mobile access if you want mobile trading).
- Full control: Many wallet providers don’t provide you access to private keys, which kind of defeats the point.
It doesn’t make sense choose a wallet that falls short of the above expectations.
You want to find that happy medium between making it difficult for unauthorised people to access your coins without making it unnecessarily difficult for yourself.
What Are The Best Cryptocurrency Wallets?
Now that we’ve explained why you need a cryptocurrency wallet and what you should be looking for in one, we can make our recommendations.
We’re not saying these are the only decent options but these are five of the most highly regarded wallets in the crypto community and they all meet the five essential criteria we mentioned in the previous section.
#1: Bitcoin Core
- The most secure Bitcoin wallet available
- Protects your privacy
- Requires large amounts of storage space and bandwidth
- Needs to be online every day
We should start with the original and definitive Bitcoin wallet that aims to protect the decentralised element of buying and trading the cryptocurrency.
You won’t find a more secure wallet to protect your coins.
However, this wallet comes at the expense of needing large amounts of storage space and bandwidth. This is because Bitcoin Core downloads the entire version of the existing blockchain (roughly 160GB of data as things stand) and continues to do so as it grows.
This comes with a number of advantages, though. First of all, it’s significantly more difficult to assign your identity to BTC transactions because the platform downloads data from global transactions, not only your own.
This also protects you from certain types of fraud – like double transactions or people fooling you into thinking you’ve received funds when you haven’t.
Crucially, Bitcoin Core creates a wallet file containing your private keys the first time it launches and you have full control over them.
- Light on storage space and bandwidth
- Still offers an impressive collection of security features
- Less secure than Bitcoin Core
- Doesn’t offer the same level of anonymity
- Detected a security issue in early 2018
Electrum differs from Bitcoin Core in the sense that it’s a “thin” wallet, which means it doesn’t need the same kind of storage space and bandwidth to operate.
This means you can get started with Electrum in a matter of minutes without eating into the space available on your device.
The downside of Electrum’s “thin” infrastructure is it doesn’t offer the same level of protection as Bitcoin Core but it’s still a highly secure system – you simply have to decide which compromises you’re comfortable with making.
Much like Bitcoin Core, Electrum is a Bitcoin-only wallet so you won’t be able to “store” other cryptocurrencies on the platform.
You also have full control over your private keys and you’re free to export them for use with other Bitcoin clients.
Aside from your private keys, Electrum generates a random seed when you first launch the program and you’ll want to make a copy of this and keep it safe.
If you ever lose access to your current version of Electrum, you can simply reinstall it on another machine and use this seed to get back in.
Unlike Bitcoin Core, Electrum allows you to encrypt your wallet file during setup but you’re free to leave it unencrypted if you prefer.
Something else you get with Electrum is the option to cold store your wallet and there’s a “watching only” option that allows you to receive payments and view your balance but prevents you from spending any coins.
Note: A security vulnerability was discovered in the Electrum software in January 2018 but the issue was promptly reported and fixed.
While security issues are always a concern, the way Electrum handled the situation was highly reassuring – particularly the transparent nature it took with users.
#3: Toast Wallet
- Cross-platform for mobile, tablet and PC (iOS, Android, Windows, Linux, Mac OSX, Chrome browser)
- Fully open source
- Great user experience across all platforms
- Mobile wallets come with a new set of security concerns
- Still relatively new to the scene
Toast Wallet is one of the few online options available for Ripple that has a good reputation.
In fairness, it hasn’t been around all that long and the departure of Rippex from the community means there’s a large gap to fill.
However, Toast already beats Rippex on a number of fronts –particularly user experience and cross-platform support.
As things stand, you won’t find a more pleasing online wallet to use and the experience across mobile devices is something every provider should pay attention to.
This thing is a joy to use. There are downsides to this mobile experience, though.
Having your data stored on a mobile device that’s vulnerable to theft, water damage and drunken nights out adds to the risk of breaches, data loss and all kinds of cryptocurrency headaches.
None of this should put you off using Toast or any other mobile wallets but it should make you a little more security conscious.
The fact Toast Wallet hasn’t been around all that long also means it doesn’t have a long, proven security history but there are no obvious signs of concern.
There was a bug detected in the PC versions of its software in February 2017 but it didn’t effect wallet encryption or transfers so it wasn’t a major security concern.
Importantly, Toast was quick to announce the bug and release a fix while it still displays a notice prominently on its homepage without any attempt to shy away from the bug – a good sign, for sure.
- Supports multiple cryptocurrencies
- Easy-to-use interface
- Cross-platform compatible
- Closed source platform
- A security breach in June 2017
- Jaxx’s handling of the breach has been slow
Jaxx is the first online wallet we’re looking at that supports multiple cryptocurrencies, meaning you can store a diversified investment using the same platform.
Aside from Bitcoin, you can use Jaxx to protect your coins from Ethereum, Dash, Litecoin and dozens of other cryptocurrencies but popular choices like Ripple and Monero are still missing – something Jaxx says it is looking to fix in the near future.
So, while support isn’t perfect, it’s far better than most wallet providers and this will only get better over time.
Thanks to this multicurrency support, you can use Jaxx’s blockchain interface to trade cryptocurrencies so you can essentially convert your Bitcoin into Ethereum and other currencies to suit market shifts.
The interface is very easy to use and setup is nice and quick. Much like Electrum, you get a “master seed” when you first open the programme.
Jaxx never holds or has access to your funds; it simply helps you manage the private keys to your cryptocurrencies while providing a cross-platform experience that makes your portfolio easier to control from one place.
The main downside with Jaxx is the fact it’s a closed source project which means the wider crypto community can’t access its code and look for potential problems.
A significant bug was discovered in June 2017 where users with access to your machine could extract your master seed and steal your coins, which definitely counts as a major security breach.
Sadly, Jaxx hasn’t been very quick to announce a fix or update users on progress and this is a genuine concern – not only the security issue itself but also the handling of it. For this reason, we don’t recommend Jaxx for storing large amounts of cryptocurrencies for any extended period of time.
- Supports multiple cryptocurrencies
- Fantastic interface
- Closed source
Exodus claims to have “made crypto beautiful” and it’s hard to suggest otherwise once you use its platform. The interface puts other wallets to shame in most regards and the live charts make managing multiple cryptocurrencies a breeze.
As you can see, you get support for Bitcoin, Dash, Ethereum, Litecoin and various other cryptocurrencies but there’s nothing for Ripple or Monero once again. Exodus makes it clear that you keep full control of your private keys and transaction data, all of which is stored locally on your device.
Much like Jaxx, Exodus isn’t a fully open source, which is a shame, but it hasn’t suffered any major security breaches – at least not yet.
Exodus claims its closed-source infrastructure reduces the risk of attacks but this is always a point for debate. For now, you’ll simply have to make your call as to whether you can accept a closed source platform or not.
Weigh Up The Pros and Cons
As we said at the beginning of this article, all of the online cryptocurrency wallets we’ve looked at cover the essential bases – these really are five of the best options available.
There are pros and cons with each of them, of course, and it’s up to you to decide what works best for you.
On the flipside, there are new wallets being released all the time – some better than others – so we’re not saying these are the only five options worth looking at.
But make sure you get full control over your private keys and do everything you can to check the security credentials of the wallet providers you look at.
Online cryptocurrency wallets are great for storing smaller amount of funds, so if you are a serious investor, you might want to consider getting a hardware wallet with stronger security features.