Navigating the world of cryptocurrency can be daunting, which is why we’ve created a guide to assist you in selecting the best cryptocurrency wallets of 2023. This guide will cover a range of crypto wallets and provide recommendations for both novice and experienced users. Additionally, it’s crucial to safeguard your personal information when conducting online transactions by utilizing a VPN.
What is a crypto wallet?
A cryptocurrency wallet is a tool, such as an application or hardware device, that enables individuals to store, trade, and manage digital currency like Bitcoin. Unlike traditional wallets, crypto wallets can take various forms such as software on a computer, an app on a phone, physical hardware, or cloud technology.
While crypto wallets are used to store digital currency, cryptocurrency exchanges are businesses that facilitate trading of cryptocurrencies. For beginners or those looking for short-term investments, it’s recommended to use an exchange that combines purchasing and storage of cryptocurrencies with a wallet.
This article provides a comprehensive guide to crypto wallets and what to expect as you gain more experience trading cryptocurrencies. Many people who are familiar with cryptocurrencies may still require an explanation of cryptocurrency wallets since they differ greatly from traditional wallets.
Best crypto wallets
The crypto wallets mentioned below are associated with cryptocurrency exchanges, which allow users to trade and store their digital currency all in one place. These wallets are highly recommended for beginners and frequent traders alike.
One of the most popular options for novices is Coinbase, which has a user-friendly interface and offline (“cold”) storage for 98% of its cryptocurrency holdings. This storage method is secure because the coins are not accessible online.
Gemini is another great choice for beginners, with low trading fees and an abundance of resources to assist new users. Additionally, Gemini provides various insurance options to ensure the safety of your cryptocurrency.
Kraken is a wallet option that offers advanced trading features and lower trading fees than many other wallets. Similar to Coinbase, Kraken stores the majority of its cryptocurrency offline.
In some cases, exchanges may not have built-in wallets, and instead, hybrid exchanges utilize blockchain wallets where you have access to a limited amount of coin with credit, rather than direct access to the crypto. It’s important to note that if you plan on holding your crypto for an extended period, you should be cautious about relying solely on these hybrid services. To ensure more direct access, consider using a dedicated crypto wallet.
How do crypto wallets work?
Crypto wallets play a vital role in safeguarding your cryptocurrency, as they store your crypto keys and ensure your coins are easily accessible when needed. Essentially, a crypto wallet is a pair of keys consisting of a public key, which appears on the blockchain and records the amount gained or lost in a transaction, and a private key, which allows the owner of the wallet to claim the amount associated with the public key.
It is important to understand that cryptocurrency is not physically inside your wallet; instead, you have an identifying number linked to an amount that is recorded on the blockchain. All cryptocurrency exists as blockchain records, and crypto wallets securely track and share these records to prevent fraudulent activity.
Individual crypto keys are essentially long strings of text that are universally shared and associated with billions of dollars in Bitcoin worldwide.
Why should I use a crypto wallet?
A trusted crypto wallet is the most secure way to have direct control over your cryptocurrency, reducing the risk of loss or hacking. By using a reputable crypto wallet, you can eliminate the middleman and have complete control over your assets. Although the top crypto exchanges are generally trusted, they are more frequently targeted by hackers than individual users and their blockchain wallets. Therefore, having a crypto wallet is crucial if you want to maintain full control over your funds.
What is the best cryptocurrency wallet?
Choosing the best cryptocurrency wallet is not a one-size-fits-all decision. It depends on your personal situation, such as how you want to trade and your level of experience. Rather than focusing on finding the single best wallet, it’s more important to explore different types of wallets and choose the one that fits your needs.
For example, if you plan to actively trade, you may want to consider a digital wallet that offers quick access to your funds. Alternatively, if you trade in various cryptocurrencies, you may want to look for a multi-cryptocurrency wallet that supports your preferred currencies.
To help you find the right wallet, we’ve compiled a list of the best crypto wallets categorized by type and usage.
Best crypto wallet for desktop users
Exodus is considered the best desktop crypto wallet for its all-in-one functionality and support for over 100 cryptocurrencies. It also has an integrated decentralized exchange and supports Trezor, a popular offline (cold) wallet. The wallet has an intuitive interface for new users and can be customized for advanced users. Additionally, it allows Bitcoin payments in US dollars or Apple Pay, and it has 24/7 customer support.
However, there are some downsides to consider. The wallet is closed-source, meaning the code cannot be audited by third parties. It also lacks two-factor authentication or multi-signature support, which may be a concern for some users. The wallet also has high fees for transactions, and customizable fees are only available for Bitcoin transactions since September 2021.
Best crypto wallet for mobile users
I would like to add that while Mycelium Wallet is a good option for mobile users, it is important to note that mobile phone wallets come with a higher risk of security vulnerabilities compared to desktop wallets or hardware wallets. It is important to take extra precautions to protect your mobile wallet, such as using two-factor authentication and keeping your phone’s operating system and apps up to date. Additionally, Mycelium Wallet only supports a limited number of cryptocurrencies, which may not be ideal for those looking to trade or hold a diverse portfolio.
Best cryptocurrency wallet for Bitcoin users
It’s important to note that although Electrum is a great Bitcoin wallet, it is a hot wallet, meaning it’s connected to the internet and therefore more vulnerable to attacks than cold wallets, which are stored offline. So, while it’s great for everyday use, it might not be the best choice for storing large amounts of Bitcoin long-term. It’s always important to assess your own needs and preferences when choosing a crypto wallet.
Best crypto wallet for maximum security
- Supports more cryptocurrencies than Trezor
- Provides high-level security with features such as 2FA and PIN codes
- Has a mobile app
- Can be difficult for beginners to set up and use
- Not as easy to navigate as Trezor
- Has had security issues in the past
Both Trezor and Ledger offer excellent security features, making them the best option for maximum security. While Trezor offers a user-friendly touchscreen and extra insurance features, Ledger supports more cryptocurrencies and offers high-level security with features such as 2FA and PIN codes. Ultimately, the choice between these two hardware wallets depends on individual preferences and needs.
What types of crypto wallet are available?
Cold wallets store your cryptocurrency offline, making them the most secure option. This type of wallet can be a physical device or a paper wallet. Cold wallets are not connected to the internet, which means that the private key is not exposed to potential cyber attacks. The downside is that they are not as easily accessible as hot wallets and can be more difficult to set up and use.
A non-custodial wallet gives you complete control over your funds because you are the only one with access to your private keys. This means that you’re responsible for the security of your wallet, and there is no backup option available if you lose your private key. Examples of non-custodial wallets include MyEtherWallet, Electrum, and Exodus.
A custodial wallet is a type of wallet where a third party holds and manages your private keys on your behalf. This type of wallet is more user-friendly for beginners as it offers backup options and customer support, but it also means that you’re trusting someone else with your funds. Examples of custodial wallets include Coinbase and Binance.
Crypto exchanges keep your assets in a cold-storage wallet, which is a highly secure option. However, it’s worth noting that there’s always a risk involved as you never know what a company may do with the money they accumulate. Exchange wallets can be a suitable choice if you only trade small amounts occasionally. If you’re investing a couple of hundred dollars, the risks are relatively low, and it may not be necessary to buy a dedicated cold wallet device for $200.
Hosted wallets are stored on servers that are not under your control, and are frequently used by hackers to hold their illegal funds due to the anonymity provided by cloud technology.
Different levels of protection are available with hosted wallets, and some are backed by third-party insurance, making them similar to custodial wallets.
To ensure the safety of your crypto wallet, it’s important to prioritize robust safety features and strong security protocols. It’s your money at stake, so you want to make sure it’s protected.
Some of the best crypto wallet security practices include enabling two-factor authentication (2FA) or multifactor authentication (MFA) to make it more difficult for hackers to access your wallet, using biometrics or facial recognition functionality, multi-signature support to ensure the wallet is owned by multiple people such as family members or business partners, open-source code and strong security protocols for transactions, safeguards against browser fingerprinting, and choosing a wallet provider with a strong history of security.
|Wallet (type)||Price||Currencies supported|
|Gemini (software)||$0.99 to $2.99 for each transaction, 1.49% fee for trades over $200||52|
|Coinbase (software)||1% fee on all transactions||150|
|Kraken (software)||0% to 0.26% for each trade, 3.75% + €0.25 for credit card transactions, 1.7% + $0.10 for online banking||1700+|
|Trezor Model T (hardware)||$250 purchase fee||1500+|
|Ledger Nano X (hardware)||$150 purchase fee||1100+|
|Electrum (software)||0.001 Bitcoin per transaction||1|
|Exodus (software)||Varies, depending on platform||126|
|Mycelium (software)||Between $0.25 to $8 per transaction||1|
How safe are crypto wallets?
Cold wallets are generally considered to be more secure than hot wallets since they are offline and not connected to the internet, which reduces the risk of hacking. It’s recommended to back up your wallet and encrypt the backup to protect against both computer and human errors. It’s also important to use a strong and unique password.
If you frequently trade crypto and have a lot of funds, it’s wise to keep the bulk of your funds in a more secure, offline wallet and limit the funds accessible through less secure platforms like exchanges. Having multiple wallets can also help reduce the risk of a centralized point of attack.
There are unique threats to crypto wallets, such as cryptojacking and phishing attacks. In 2021, there was a major crypto heist where hackers stole $600m from Binance wallets, and in 2016, Bitfinex lost $72m in crypto.
Overall, taking precautions and diversifying your holdings can help keep your crypto safe. However, it’s always important to stay vigilant and keep up with the latest security practices.
Crypto wallet comparison
We’ve covered a lot of crypto wallet information throughout this article. Here’s a consolidated review:
|Best for beginners||Best for security||Best for desktop||Best for mobile||Best for Bitcoin|
|Trezor Model T (hardware)||✓|
|Ledger Nano X (hardware)||✓|
At this point, you should feel confident enough to select your first or next cryptocurrency wallet app. The top digital wallet apps are constantly evolving, and new cryptocurrencies are continuously being supported.
The best way to gain experience is by trying things out. Although we can’t guarantee the financial stability or security level of any of the wallets listed, it’s always wise to start with small investments to prevent any significant loss.
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