If you trade or deal with cryptocurrencies, you need a crypto wallet. You can think of wallets as a medium of storage for your crypto coins, but you should know that wallets do not store your crypto assets. They merely keep the private keys you need to access the assets that reside on the blockchain.

With that in mind, we can define cryptocurrency wallets as tools that allow you to interact with the blockchain. Regardless of the definition, you need a wallet if you want to own cryptocurrencies for trading, payments, or any other purposes you can think up.

Cryptocurrency Wallet Types

Cryptocurrency wallets can be of three different types:

  • Software wallets. Such wallets are easy to access. All you need to create such a wallet is to join an exchange or access a purpose-built website that lets you create one. You can also download and install a software wallet. Once you have your wallet set up, you can use it to generate public keys that act as “addresses” where others can send crypto assets.
  • Hardware wallets are physical devices that store your private keys behind sturdy physical security. Unlike software wallets, hardware wallets are mostly offline, and that adds another layer of security to this type of storage. You can use your hardware wallet to generate a public key to receive crypto assets. You don’t even have to put the device online to receive funds. For sending, hardware wallets may require you to physically press two buttons simultaneously to confirm your intention and prevent any foul play.
  • Paper wallets contain your private keys in the form of a QR code printed onto a piece of paper, metal, etc. Paper wallets are not particularly secure, and these days, we consider them obsolete.

Software wallets can be:

  • Desktop wallets. You install these on your computer like you would install any other app. Desktop wallets store your keys locally and may be vulnerable to hacks if your computer is online.
  • Mobile wallets. These come in the form of apps you can install on your mobile phone. They work similarly to desktop wallets.
  • Web wallets. These don’t require you to install an app. You can interact with them through a browser. Web wallets are perhaps the least secure.

The Best Crypto Wallets

There are many good hardware and software wallets. Which wallet is the best for you, depends on your needs. Custodial wallets hold your private keys for you at an online server as someone else’s property. You are always better off keeping the keys yourself. There is a saying in crypto circles: “not your keys, not your bitcoin.”

When looking for the best crypto wallets, ask yourself: “for what do I want to use it?”

The Best Crypto Wallet for Beginners

At Coinbase, you gain access to a wallet you can use to store over 500 cryptocurrencies and even NFTs. The Coinbase wallet is a hot wallet, but it belongs to the most reputable and solid cryptocurrency exchange. The wallet is separate from the exchange. You do not have to join the latter to gain access to the former.

The security guarantee that Coinbase offers is that it may be able to recoup stolen crypto assets if someone hacks into your wallet.

Its user interface is beginner-friendly and easy to navigate. It supports two-factor authentication and multi-signatures for added security.

The Coinbase wallet is non-custodial, meaning that users hold their private keys on their devices. Since we are talking about a hot wallet, however, it cannot be as secure as a cold wallet.

You can set up the wallet to require biometric authentication. It lets you access decentralized exchanges where you can trade one crypto for another without an intermediary.

The Best Desktop Wallet

The Exodus wallet features a superb user interface. It is beginner-friendly and compatible with iOS and Android devices, not to mention the Trezor hardware wallet.

Exodus supports 145 cryptocurrencies, and it receives frequent updates to ensure it stays secure and functional. For a hot wallet, Exodus’ selection of supported digital assets is second to none.

Exodus comes with adequate customer support, and allows wallet owners to use Apple Pay to buy bitcoin.

The team behind the wallet has also added a customizable fee feature for bitcoin transactions.

Those interested in cryptocurrency trading will appreciate the apps that work with Exodus and allow users to stake their assets and use charts to perform technical analysis.

The Best Crypto Hardware Wallet

Ledger’s Nano X is the successor of the popular Nano S and is currently the gold standard in hardware wallets.

Looking like a pen drive, the device is small and easy to handle. The security of this cold wallet is unmatched. Its only shortcoming in this respect may be the Bluetooth technology it uses, but those worried about this vulnerability can use the Nano S in its stead.

The Nano X also comes with a battery that the Nano S does not have, so those who find the battery unreliable can, again, fall back on using the Nano S.

The Nano X and the Nano S both support a wide range of crypto assets, and the producer adds functionality through regular updates.

Ledger’s hardware wallets feature a Secure Element chip that locks away the private keys behind the same level of protection credit cards and passports feature.

The Ledger Live interface lets users manage their assets and buy or sell cryptocurrencies directly from the wallet. Ledger Live also allows for the staking and lending of cryptocurrencies.

The Best Crypto Mobile Wallet

Carrying around your crypto in your pocket and using the built-in security features of your mobile device is an attractive proposition for many.

Mycelium features a built-in crypto exchange that allows you to trade digital assets on the move. The mobile wallet also supports offline transactions, and it is compatible with the popular hardware wallets such as the Ledger wallets, Trezor, and KeepKey.

Due to not being as secure as cold storage solutions, Mycelium features a watch-only mode that allows users to track their trading activity while blocking all outgoing transactions.

To decide which of these wallets suits your needs, consider these three factors:

  • Safety
  • Features
  • Cost

Properly storing the private keys of your digital assets is the single most important thing you should learn to do as a crypto owner/investor.