Crypto wallets are software types that you can use for the tracking, receiving and sending of cryptocurrency coins through the blockchain. They work similarly to a bank account. Each wallet has a private and public key.
Why Do You Need a Cryptocurrency Wallet?
Getting a cryptocurrency wallet is important as keeping your cryptocurrencies on an exchange is not always secure. While you can store your cryptocurrencies on exchanges like Binance or Coinbase, with this option, you do not actually own these coins since you do not have the keys to the wallet they are stored in. While you can easily gain access to the coins by logging into the exchange, your account could be deleted or hacked, meaning that your funds could disappear forever.
So, what are the keys to a wallet where you own your own coins? A public key identifies your account on the network. It works in a similar way to your email address, as somebody will send crypto to your address if they want to send you coins. On the other hand, your private key is 64 characters that can be generated from a seed phrase of twelve words. This basically fulfils the role of the password on your account and is used to sign transactions and prove that you own the public key that is related to it.
There are four different types of cryptocurrency wallets that you should be using. Ideally, you should choose the one that best matches your cryptocurrency needs. Avoid using web wallets, and always pick the safest wallet type to minimize the risk of losing your cryptocurrencies.
The Best Hardware Wallets
Ledger Nano (S and X): This is the most popular wallet brand worldwide with two different sticks to choose from. The S is a less expensive option, but the larger X storage option is often more convenient for those who make transactions between multiple cryptocurrencies often. The Nano X supports Bluetooth 5.0. However, you should bear in mind that Ledger was targeted by a cyberattack in July 2020 leading to a data breach of approximately over 270,000 pieces of detailed information such as postal addresses, names, and telephone numbers. However, no coins were stolen as hackers did not gain any access to private keys.
Trezor: (One and Model T): Trezor is another very popular hardware wallet brand. The Trezor One is a cheaper alternative, while the Model T is a more expensive option that comes with a range of extended functionalities. It has additional support for cryptocurrencies like XMR, ADA, and XTZ.
Despite the fact that hardware devices are very secure, the weakest link here is always the people that use them. Wherever possible, you should avoid buying used hardware wallets.
The Best Desktop Wallets
Exodus: This is a very user-friendly, easy to understand and reliable wallet. Right now, it is the most popular desktop wallet and is available for Windows, Mac and Linux.
Atomic: This is another reliable, user-friendly desktop wallet that supports over five hundred cryptocurrencies and allows staking various cryptos. It is also available for Windows, Mac, and Linux.
There are various reliable desktop wallets to choose from, but these two have been proven to be the easiest to use and the most user-friendly.
If you decide to go with a mobile wallet rather than a paper, desktop or hardware wallet, Atomic or Exodus are both available on Android and iOS. Avoid installing multiple crypto wallet applications on your phone since it will be impossible to keep track of your keys and passwords.
Whatever wallet you choose, always be cautious and double-check everything. Make sure that your devices are malware-free and be careful when clicking on emails that appear to be from cryptocurrency exchanges.