With cryptocurrency gaining traction in the digital economy, more people are looking for ways how to better manage their cryptocurrency funds. Among these include properly storing their cryptocurrencies and protecting their digital assets. This is where your cryptocurrency wallet comes to play. Simply put your digital wallet in the place you can keep your cryptocurrency, a medium to send or receive it, and source funds to purchase crypto apps and services. If you are thinking of taking the plunge into the world of cryptocurrency you might need to research what bitcoin wallets are and how you can use them to trade in cryptocurrencies.
What is a Cryptocurrency Wallet?
Crypto wallets keep your private keys or password which is a randomly generated string of alphanumeric characters that act like your bank PIN. For example, a Bitcoin wallet helps store your digital Bitcoin and validates your transactions when you’re using your Bitcoin.
Your digital wallet gives you access to your cryptocurrencies and other crypto assets while preventing others from using your crypto or the transaction from being altered by a third party. Bitcoin wallets come in many forms including paper wallets, soft wallets, and hard wallets. A wallet keeps secret information, called a private key which is used to validate bitcoin transactions.
What to Look for in a Bitcoin Wallet
Before settling on one particular bitcoin wallet look for a crypto wallet that has the following features:
Offer Security: your digital wallet app should help prevent data losses and tampering from taking place. Your crypto wallet app should require you to unlock it every time you want to use it some great Bitcoin wallets come with facial or fingerprint recognition, making it easy to access your digital assets.
Backup Features: The ideal digital wallet should offer you a proper backup mechanism. Look for a digital wallet that comes with a backup procedure that consists of a rescue link, password, and a number of passphrases to get everything back up and running again.
Handles multiple cryptocurrencies: Look for a digital wallet that allows you to work with different cryptocurrencies under one roof. A good digital wallet will help you convert one cryptocurrency into another. This will help in simplify your cryptocurrency and digital assets trading. Though many digital wallets in the market can accommodate multiple cryptocurrencies be aware of some wallets that accommodate just one cryptocurrency. For trading insights check out our articles on how to buy cryptocurrency and how to sell cryptocurrency.
Ease of use: If you are new to cryptocurrency and digital trading look for a wallet that allows for easy management of your account and comes with easy-to-use features that are beginner-friendly.
List of Cryptocurrency Wallets
Whether you choose a hardware wallet or a soft wallet, here are some of the best cryptocurrency wallet options available to safely store your currency. There are several types of cryptocurrency wallets in the market each with its own pros and cons. Below are our picks for the best bitcoin wallets:
1. Coinbase Wallet
World No. 1 Coinbase wallet is a digital wallet developed by the people behind the Coinbase cryptocurrency exchange. With this wallet you can store all of your crypto and NFTs in one place; participate in airdrops and initial coin offering (ICO); shop at stores that accept cryptocurrency, and send crypto to anyone.
2. Ledger Nano X
Ledger Nano X is considered the best hardware wallet that lets users buy and exchange cryptocurrencies. Combined with the Ledger Live app it offers feature-rich apps for mobile and desktop. Besides supporting Bitcoin, Ledger wallets are touted to support over 1,800 digital coins and tokens. In terms of security, the Ledger Nano comes with a Secure Element chip which is fashioned after technology used in high-end security solutions such as credit cards and passports.
3. Exodus Wallet
Exodus’ Wallet allows users to securely, manage, and exchange cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Monero (XMR), Litecoin (LTC), and more. You can use it to track your cryptocurrency portfolio and its performance over time with its intuitive charts that update in real-time so that you can keep up with the fast-moving market. With it, users can buy and sell one digital asset for another without having to go through centralized exchanges. When it comes to security it encrypts your bitcoin private keys and transaction data on your device so that no one else can access your cryptocurrency. Users also have the option to enable face or Touch ID to further secure their wallets.
4. Metamask
Metamask is one of the most popular cryptocurrency wallets in the market today with over 21 million users. Considered best for mobile wallet it comes with a browser extension and as a mobile app while offering you a key vault, secure login feature, token wallet, and token exchange options to manage your digital assets. If you are looking to swap currencies to buy an NFT, Metamask comes with a built-in swap feature and even lets users limit how much they pay in gas fees.
5. Trezor Wallet
Trezor wallets are open-source crypto wallets that support over 1,600 cryptocurrencies in its cold wallet, which include Bitcoin, Ethereum, Binance coin, Tether, Dogecoin, and more. Trezor wallets connect to desktops via USB and allow users to use it as cold storage where they can be offline and sign transactions without connecting to the internet. Back by strong security measures that include PIN codes and passphrases your crypto coins are secured and accessible around the clock.
6. Trust Wallet
Trust Wallet is an open-source, decentralized, mobile crypto wallet that supports all forms of digital assets and blockchains. This free-to-use app does not earn anything when users use it and all the gas charges accrued are paid to the validators or miners. Thanks to its user-friendly features it has seen over 25 million users
7. Mycelium
Mycelium is another popular crypto wallet for mobile users as it gives users more control over transaction fees and integrates with hardware wallets. with a big focus on Bitcoin. Introduced in 2008, it is considered among the best bitcoin wallet options for Android and iOS users. It comes with features that allow users to mail custom transaction fees, offer hardware wallet support, allow users to hold their Bitcoin in an offline storage device while still using Mycelium’s user interface to see their holdings.
8. Electrum
The Electrum Bitcoin Wallet is an open-source wallet and offers custom transaction fees that allow users to adjust their fees. In addition, it can integrate with hardware wallets such as KeepKey, Ledger, Trezor to help for cold storage purposes. This wallet also offers some of the best security features available in the market.
Types of Crypto Wallet
Many bitcoin wallets come in various forms such as hot wallets, cold wallets and other wallets offering unique features and solutions to users. Below are some of the common types of crypto wallets:
Cold Wallet
Cold wallets are physical wallets used for storing Bitcoin and can function without connecting to the internet. They come with a USB drive to connect with devices and let you buy, sell, and trade Bitcoin and crypto-assets while connected to a computer or mobile device. These wallets offer additional tiers of protection as they are more difficult to hack than an internet-connected wallet.
Hardware Wallet
This is similar to a physical wallet. Hardware wallets come in the form of a thumb drive. Hardware crypto wallets help store your private keys to your crypto offline and are considered one of the safest methods to store Bitcoin. These are encrypted hardware wallets that offer enhanced security features.
Paper Wallet
Paper wallets are pieces of paper with users’ private and public keys printed out on them. Some paper wallets might come with scannable barcodes or QR Codes created by an app to help you access your cryptocurrency offline acting like an offline wallet.
Hot Wallet
A Hot wallet refers to a virtual currency wallet that is accessible only online and facilitates cryptocurrency. Hot storage wallets often come in the form of desktop wallets and mobile wallets.
Desktop Wallet
These bitcoin wallets are software wallets used on PCs and laptops but can only be accessed from a single computer on which they were originally installed. Security-wise they come with risks such as viruses or hack attacks that could lead to losses.
Mobile Wallet
These are wallets that can be used over smartphones. A mobile Bitcoin wallet will let you accept or make cryptocurrency payments almost instantly. However, you will need to back up your private keys on physical paper for added security.
Web Wallet
Web wallets run on the cloud and are accessible through PCs and smartphones. While they are more convenient to access, web wallets store your private keys online and are controlled by a third party which makes them more vulnerable to hacking attacks and theft.
What is the best cryptocurrency wallet?
Considered the best crypto wallet in the market Trezor comes with backup and regular features; great customer support; regular firmware updates and works with a plethora of cryptocurrencies.
What is the safest crypto wallet?
Cold storage wallets are considered the best option in terms of security. For example, the Ledger Nano X is equipped with a Secure Element chip that is fashioned after technology used in high-end security solutions such as credit cards and passports.
Do you need a cryptocurrency wallet?
If you want to invest in cryptocurrency, it is best to invest in a crypto wallet as it offers you more control over your investments. You do however have the option to use brokerages such as Robinhood to facilitate selling and buying Bitcoin or payment services such as PayPal, though these services offer limited selections of crypto coins and trading tools. However, when trading in cryptocurrencies make sure you abide by state and federal tax regulations. For additional insights check out our article on do you have to pay taxes on cryptocurrency. For a great selection of cryptocurrency exchanges check out our article on the best cryptocurrency apps.
Is there a wallet that holds all cryptocurrency?
With the continuous rolling out of cryptocurrencies into the market, each comes with its own protocols and case uses as such there is no universal cryptocurrency wallet. However, there are several multi-cryptocurrency wallets in the market that can accommodate popular cryptocurrencies these include Ledger, Coinomi, Trezor, Freewallet, and Exodus.
How do you create a cryptocurrency wallet?
You can create a cryptocurrency wallet within a few minutes by following these simple rules:
1. Download a wallet app based on particular requirements and needs.
2. Create your account by following the signup instructions
3. Record and keep safe your recovery phrase. Some wallet apps may allow you to add an extra layer of security such as facial recognition or creating a passcode.
4. Purchase and deposit some cryptocurrency into your wallet.
5. Once finished you can start sending, receiving, or trading cryptocurrencies.
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