If you have a significant amount of crypto assets, you cannot guarantee their safety by leaving them in an exchange network. With the continuous rise in the hacking of cryptocurrency platforms today, it is prudent to store your coin in a safe and secure wallet. Just like a physical wallet you carry to keep your money in, a crypto wallet allows you to keep your coins close to you. Here are the best cryptocurrency wallets!
What Exactly Is a Cryptocurrency Wallet?
A cryptocurrency wallet is an app and/or a place where you can store your private or public keys. A crypto digital wallet can be in the form of software, hardware, a website, or a combination of two types. A cryptocurrency wallet gives you the opportunity to keep all your coins in one place when you want to make a transaction. You can move all your coins from different exchanges like eToro and Coinbase to one wallet.
When you register in an exchange platform, you are given a public key and a private key. A public key is the one you give to others when they want to send you cryptocurrency, while only you are privy to your private key. While an exchange network might offer you the ability to transact with your coins, data security remains a challenge with many crypto platforms.
Why Do You Need a Cryptocurrency Wallet?
Here are the top two reasons that you need to get a crypto wallet if you’re looking to be involved in cryptocurrency.
1) For Crypto Asset Security
In August 2022, one of the largest cryptocurrency exchange platforms in the world, Liquid, was hacked with hackers stealing users’ data and $97 million worth of digital coins. Another crypto platform, Poly Network, was hacked and $610 million of its customer’s funds was lost. For years, crypto exchange websites have been susceptible to frequent hacking. BitGrail, Hotbit, Kucoin, and Coincheck are some of the exchanges that have witnessed massive hacks on customers’ data. According to Business Insider, so far, there were thirty-two incidents of hacks and fraud worth $2.99 billion in 2022.
2) To Keep Track of Your Coins
Apart from the security they provide, crypto wallets also give holders more power over their coins. To take better control of your cryptocurrency, storing it in a digital wallet is a safer option than on an exchange network. The use of private keys to access your coins means only you can tamper with them.
As a wallet owner, you have more independence to make decisions over your digital currency. Crypto wallet revolves around decentralized finance with limited to no government influence, unlike a centralized platform like Coinbase with a centralized exchange.
Hot Wallet vs. Cold Wallet
To choose between a hot wallet and a cold wallet, you need to decide whether you prioritize security over accessibility, or otherwise. Your choice of wallet can also be determined by the amount of a crypto asset you wish to store. Hot storage stores cryptocurrency online through software, apps, or over the cloud so they are good for beginners and crypto enthusiasts with a small asset. Cold storage wallet stores cryptocurrencies offline and are good for experienced users with a high amount of crypto assets.
If your priority is to have regular access to your digital currency then a hot wallet is for you, but it can also possibly be hacked online. However, if tight security is what you need, cold wallet storage will store your crypto offline away from the prying hands of hackers but it will also not be easily accessible to you.
A hardware wallet is similar to a USB stick that can be connected to a computer and provides offline storage. For instance, crypto wallets like Electrum, Mycelium, and copay crypto wallet provide hardware storage devices where a user’s data is kept.
Although hardware wallets are extremely difficult to hack they can be lost since they are physical objects. More so, a hardware wallet can be hacked if bought from an unauthorized dealer, and recovery of lost wallets will be tough. On the flip side, keeping your currency online through an app or a software wallet comes at great risk.
If you are yet to decide the type of wallet you need, learn about the specific features of the best wallets in 2022.
Best Cryptocurrency Wallets of 2022
Ledger Nano X
Founded in 2014, Ledger created Ledger Nano X which supports over 1800 currencies including tokens. This is a hardware wallet with data stored in a USB flash drive. With a unique Blockchain Open Ledger Operating System (BOLOS), Nano X uses a closed-source firmware that reduces its level of vulnerabilities. Ledger Nano X boasts its Bluetooth capability to manage users’ accounts on the go and a large screen. Ledger Nano X can be used wirelessly with Ledger Live App on a smartphone. Its stylish design, security, and ease of access make Ledger Nano X one of the best wallets.
Trezor Model T
The Trezor Model T was created by the Santoshi Lab and it is similar to the old Trezor One. However, the Trezor Model T, also known as Trezor T, has been expanded to work with the Trezor suites to allow users to buy cryptocurrency in a secure environment. The hardware wallet uses open-source code that has been tested by other developers and third parties for vulnerabilities. With its three layers of security that include a recovery seed, PIN, and the passphrase feature, Trezor T is one of the most secure wallets for cryptocurrency.
Unlike Trezor T and Ledger Nano X, Mycelium is a software wallet designed with seamless compatibility with hardware wallets. That is, you can integrate your Mycelium hot wallet with cold storage that you carry around. Mycelium mobile app is available for both Android and iOS devices. Desktop users cannot use Mycelium app as it was developed to be used on the move. One of the downsides of Mycelium wallet is that it is specifically designed for Bitcoin but not other digital currencies. On the other hand, the encryption provided by the app guarantees users’ asset security.
Just like Mycelium, Electrum is a Bitcoin-only software wallet with ease of access for users. Electrum allows users to quickly and easily share cryptocurrency while providing extra security. Electrum does not share users’ data with the server and in doing so gives users more power over their cryptocurrency.
If you are new to the world of cryptocurrency, then you should probably consider Exodus wallet. Exodus provides hot storage on both mobile and desktop devices and has a built-in exchange. Unlike Mycelium and Electrum, it allows users to store a wide variety of cryptocurrencies apart from Bitcoin. Investopedia has dubbed the wallet the best wallet for beginners to store Bitcoin because it is free, provides round-the-clock customer support, and has a simplified interface.
The major benefits of wallets over crypto exchange is that they are secure, private, and independent. The first step to choosing your crypto wallet is to decide what you value more; security or accessibility. The amount of currencies you want to store in your crypto wallet is also a strong determinant when selecting your wallet.
The first step to choosing your crypto wallet is to decide what you pride more; security or accessibility. The amount of currencies you want to store in your crypto wallet is also a strong determinant when selecting your wallet.
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