What to choose - a hardware, stock or software wallet. How do they differ and what tasks are best suited for?
Keeping crypto assets is the most important part of the job for any investor. So the choice of storage should be approached very responsibly. As the most popular options, there are three subcategories: software, stock, and hardware. Today, we will conduct a comprehensive comparison of the functionality, and figure out which of them will be most suitable for the specific tasks of each kind of user.
It is important to understand that cryptocurrency is stored at addresses on the blockchain. And wallets are needed for the convenience of managing private keys and gaining access to addresses. According to the storage method, they are divided into cold (without an Internet connection) and hot (with an Internet connection).
The Invest-TOP.ru editorial board reviewed the list of the best hardware, desktop, online cryptocurrency wallets for storing coins: Bitcoin, Ethereum, ERC20 tokens, Ripple, Bitcoin Cash, Litecoin, Stellar Lumer, Dash, Iota, EOS, Cardano, Neo, Tron, Monero, Vechain, Ethereum Classic, Tether, Qtum, OmiseGo, Binance Coin, as well as multi-cryptocurrency wallets.
What is a cryptocurrency wallet and what types are there?
A cryptocurrency wallet is a special storage for digital money, made in the form of software, a personal account on the exchange, a cloud, a hardware device or a sheet of a QR-image of a key. As the demand for cryptocurrency increases, so does the number of offers. At the same time, it is becoming increasingly difficult for users to decide which wallet to choose to store money on a PC / laptop, phone or Internet site.
There are several types of crypto wallets, each of which has different ways of storing keys and providing access to them. The three main categories are software (which in turn are divided into online, desktop, and mobile), hardware, and paper.
The main types of cryptocurrency wallets:
- Desktop (local) wallets are downloaded and installed on a personal computer / laptop. You can log into your account only from the same device on which they are installed. This provides a certain level of security, but at the same time, it is dangerous in a situation where the computer is infected with a Trojan or virus.
- Web wallets (online) run in the cloud and can be accessed through a browser from any device. This is convenient, but the private keys are usually not stored by you, but by a third-party service provider, which exposes them to the risk of malicious attacks.
- Mobile cryptocurrency wallets are applications for mobile platforms. Convenient in that you can perform an urgent operation anywhere at any time. But they have minimal functionality and are also the least well protected.
- Hardware crypto wallets store user keys on an external device similar to a USB flash drive - this is their main difference from software ones. With the help of such devices, you can store cryptocurrency offline, connecting to the Internet only when you need to make a transaction. If you have lost your wallet, then the finder will not be able to use it, since access is protected with a pin code.
- Cryptocurrency paper wallets offer a high level of security and are also fairly easy to use. This definition can refer to two concepts: a simple physical copy of the printed public and private keys, as well as software that is used to create a pair of keys, which can then be printed.
Software wallets: an overview of the best
A software wallet is one of the most common methods for storing cryptocurrency, which implies multi-platform, quick access to your funds, and relative security. It should be understood that each software wallet is, in one way or another, tied to its physical medium, and its loss, in most cases, will lead to an irrecoverable loss of funds.
Blockchain wallet
Blockchain Wallet is by far the most popular digital wallet that allows users to store and manage their cryptocurrencies to the fullest. The Blockchain wallet is backed by a software development company Blockchain founded by Peter Smith and Nicholas Carey. A blockchain wallet allows you to make transfers in cryptocurrency and convert them into currency.
Pros:
- Support for a mobile application, with a well-designed UI / IX;
- Web interface support;
- Support for leading cryptocurrencies;
- Open source freely available.
Minuses:
- If the attackers managed to gain access to the user's mail, they can easily cash out all the funds stored in the wallet;
- Lack of a desktop version of the wallet;
- Keeping keys on the developer's side.
Output. Blockchain Wallet is the most popular place to store funds, however, the level of security is poor. Blockchain allows users to keep funds in relative safety, and is maximally focused on convenience. This option can be considered if the user is not going to store large amounts of money, and is a beginner in the crypto space, for whom simplicity of functionality is important.
Coinbase Wallet
Coinbase Wallet is an application that allows users to store their own cryptocurrency and interact with the blockchain through a decentralized application. This wallet combines the versatility offered by its predecessor, Toshi Wallet, with the support offered by Coinbase. In this wallet, the user can not only store ETH and ERC tokens based on the Ethereum network, but also interact with BTC, BCH and LTC.
Pros:
- Mobile app support, with excellent UI / IX;
- Web interface support;
- Support for leading cryptocurrencies;
Minuses:
- Keeping keys on the developer's side.
- Lack of a desktop version of the wallet;
- Lack of open source code in the public domain.
Output. The Coinbase wallet is a great alternative to storing your funds. Firstly, it generates a seed for security, and secondly, it allows you to protect the application from using the fingerprint reader. All in all, it is a very simple and easy to use application, but with a lot of tools. Additionally, this wallet is supported by Coinbase. On the other hand, it can cause some inconvenience. When opening some decentralized applications, the browser may freeze, which will not always allow making a deal in a matter of seconds, as required by the quality standards set by the users.
Trust wallet
Trust Wallet is a mobile app that allows you to send, receive and store cryptocurrency tokens on the Ethereum blockchain. Designed with simplicity in mind, an open source portfolio is designed to provide a platform that is easy to set up and use. Trust Wallet allows users to store their private keys on their devices and provides a backup feature for easy recovery.
Pros:
- Allows you to store any ERC token;
- Private keys are stored on the user's device;
- Ability to work with decentralized applications (dApp);
Minuses:
- Lack of support for many tokens;
- Doesn't provide two-factor authentication;
- Non user-centric interface design.
Output. Trust Wallet includes a built-in Web3 browser that makes it easy to explore decentralized internet applications. This application complies with quality and safety standards and is optimized to operate at a high level. Trust Wallet is perfect for those users who are not too picky about functionality and do not need to keep a large portfolio of various non-ERC tokens.
Guarda
Guarda is an Estonian project that is a hybrid of all types of wallets. It has the ability to functionally use all kinds of cryptocurrency solutions in one place, use from a browser or download a desktop application. Guarda supports over 45 coins and is compatible with all modern token standards.
Pros:
- Mobile App Support
- Web interface support
- Desktop version support
- Private keys are stored on the user's device;
- Open source
- Web3 support
- Support for a colossal number of tokens
Minuses:
- Lack of two-factor authentication
- Lack of Wallet Connect support
Output. Guarda Wallet is a project created by a team of highly qualified specialists. The level of confidentiality and implementation of innovations is at a high level. Summarizing all these factors, we can say that Guarda is a reliable wallet for storing cryptocurrency. However, among the negative points that can be noted are the lack of support for Wallet Connect, which does not allow working with most DeFi protocols and the lack of two-factor authentication.
Atomic wallet
Atomic Wallet is a unique cryptocurrency wallet that allows you to manage over 300 different crypto assets, in addition to the ability to add custom ERC20 tokens. Another characteristic that this wallet can boast of is that it has the ability to conduct atomic swaps, which are based on the implementation of exchanges without intermediaries using smart contract technology.
Pros:
- Mobile App Support
- Desktop version support
- Multicurrency
- Multi-signature
- Open source
- Private keys are stored on the user's device;
Minuses:
- Lack of web interface support
Output. Atomic Wallet is theoretically completely safe for storing funds. The wallet is open source, which significantly reduces the likelihood of errors or introducing hidden vulnerabilities into the program. What's more, sensitive data such as passwords is encrypted and only stored locally on the end user's device.
Exchange-traded cryptocurrency wallets: a review of the best
There is an opinion that storing funds on exchange accounts is an undertaking doomed to a deliberate failure. However, millions of investors and traders around the world choose exactly the exchanges, because only custodian wallets imply a subsequent refund in case of loss of physical media.
Currency
Currency.com is an online tokenized asset trading platform designed to make quick and easy cryptocurrency transactions. The Currency.com platform facilitates not only token trading, but also other types of financial assets. Recently, Currency has significantly improved its functionality, and now, the exchange can rightfully be called not just an excellent place to conduct transactions, but also the safest place to store your cryptocurrencies.
Pros:
- Official regulation: the exchange is entirely focused on interaction with the user, and stores his funds in accordance with the legislation of the Republic of Belarus. This reduces non-exchange risks.
- Simple deposit and withdrawal of funds: the cryptocurrency stored on currency.com can always be easily withdrawn, just like it is easy to replenish the wallet.
- Full Russian localization: all exchange functionality is completely in Russian
- For residents of Russia and the CIS countries, you can always use the withdrawal of funds to Sberbank accounts
- More than 1000 liquid assets, which allow you to store not only cryptocurrency, but also any kind of other financial instruments in complete safety and in accordance with world legislative acts.
- Currency.com can always provide the user with the necessary reports, which will confirm the legal origin of funds.
Minuses:
- Not found.
Output. Currency.com is one of the best options for storing cryptocurrency for investors located in the CIS countries. Low commission costs, quick withdrawal of cryptocurrencies to any payment systems make currency a clear leader in the storage market. The security of the end user is a priority goal of the Currency crypto exchange, for which advanced technologies were involved in its development. For example, all the necessary data is stored on the data processing servers Equinix, which is serviced by such giants as NASDAQ and Dow Jones, the Frankfurt and London stock exchanges.
Binance
Binance is currently one of the largest cryptocurrency exchanges in the world and is the most popular among traders. The platform has a huge amount of functionality, and allows you to keep funds safe, constantly improving its protocols.
Pros:
- A large list of supported tokens.
- When exchanging cryptocurrencies for cryptocurrencies, Binance's fees are the lowest in the industry.
- Binance takes security very seriously, and upon registration, users are asked to set up two-factor authentication (2FA), further confirming the exchange's commitment to secure storage.
- As Binance has become one of the most popular exchanges for buying, trading and selling cryptocurrencies, there are a lot of transactions happening on its platforms all the time. This is an important factor that allows you to quickly make transactions with assets, and, if necessary, move funds in such a way as to extract the maximum profit from storage.
Minuses:
- Not found.
Output. Binance offers a huge number of internal digital wallets for over 80 cryptocurrencies, some of which are the most popular, including BTC, ETH, USDT, EOS and BNB and many others; In addition, for those who still consider using an exchange wallet unreliable, a version of a "trusted" wallet called Binance Trust Wallet was invented, which allows you to store Ethereum and more than 40 tokens from the environment of decentralized applications; Trust Wallet, integrated directly with the blockchain, is a wallet that allows complete control of assets without leaving the Binance environment.
Coinbase PRO
Coinbase Pro, formerly known as GDAX, is a cryptocurrency exchange and trading platform. This exchange stands out among other things for its low fees and powerful security measures (it has never been hacked). In addition, the platform keeps 98% of users' funds offline using cold storage.
Pros:
- It is currently the easiest, safest and cheapest exchange method due to its low commission costs.
- High platform security due to storage of 98% of funds offline and frequent technical and financial audits.
- Very good user interface and intuitive navigation.
- Wide variety of fiduciary deposit and withdrawal options.
- Insured deposits.
Minuses:
- Private keys are stored on Coinbase servers, which does not insure users against hackers gaining access to their funds;
- Large volumes of requested personal data: KYC and AML are impeccably observed on the exchange, which will not allow you to fully interact with the site without entering your personal data into the database.
Output. Considering all its features, Coinbase Pro is undoubtedly one of the best exchanges on the market, if the user is not confused by the amount of requested personal data.
Huobi
Huobi is a reasonably secure, trustworthy platform that has managed to maintain a positive reputation free of fraudulent or material disruption issues. Although today, due to active restrictions on cryptocurrencies in China, its jurisdiction has been transferred to other countries, Huobi continues to increase the volume of transactions and provide users with a safe deposit of funds.
Pros:
- High liquidity;
- Has an interface compatible with mobile devices.
Minuses:
- Operating fees are quite high;
- Provides several ways to fund your account.
Output. The Huobi exchange has invested heavily in security and has passed many third-party tests. They offer two-factor authentication, SMS and email notifications, and PGP encryption. More than 98% of client assets are stored in a cold multi-signature wallet, which provides a high level of security for the funds stored on it. By the way, once the exchange was hacked, however, the attackers failed to steal user funds.
Hardware wallets: an overview of the best
Cryptocurrency hardware wallets are physical, electronic devices such as USB flash drives that can generate private keys and digital signatures of transactions offline. They can guarantee complete anonymity. They are much more expensive than the other options, but are easy to set up, back up, and use on the go. Their security is undeniable, and is the benchmark in the storage of cryptocurrencies.
Ledger blue
Ledger Blue is a premium hardware wallet released in November 2016 that aims to make storing cryptocurrency the safest and easiest possible.
Previously described as the most advanced hardware security for cryptocurrencies on the market, Ledger Blue features unmatched security, a large LED display, and rugged construction for regular use.
Pros:
- High level of security of cryptoassets;
- Compatible with a wide range of devices;
- Convenient interface;
- Excellent touch screen, easy to use and improves safety;
- Support for multiple currencies.
Minuses:
- Impressive value;
- Not as portable as other hardware wallets on the market.
Output. Ledger Blue is the most advanced security equipment on the market. It can run multiple applications and combines enterprise-grade cryptographic capabilities with a lightweight, portable device. Manufactured and developed in France to the highest standards. It is built around a touchscreen secure element with USB and Bluetooth connectivity.
Ledger nano s
This device allows you to both store virtual currency and make payments. Some of its main characteristics are ease of use, speed of transfers, payments and a high level of security.
Pros:
- With the security provided by 24 randomly generated words, your crypto assets can always be recovered.
- With a crisp OLED display, you can always check your assets in real time.
Minuses:
- Since the wallet does not have a battery, it must be connected to your computer.
- At the moment, the Ledger app only works with the Chrome browser.
Output. A hardware wallet, such as the Ledger Nano S, completely provides secure storage of data, however, here you should take into account the human factor and not lose access to the physical medium so as not to lose funds.
Trezor
Trezor is a physical device with no internet connection. They store the private keys required to carry out transactions with cryptocurrencies. It is very easy to use for both new users and people who already have experience in transactions and operations with payments in cryptocurrencies.
Pros:
- Fully mobile to use (via Android, with an OTG cable)
- Easy to use functionality
- Can be used as a powerful password manager
- Supports two-factor authentication
Minuses:
- High price.
Output. Trezor is one of the most trusted companies in the world when it comes to hardware wallets. Their most popular product is the Trezor Model One, which is an affordable hardware wallet with state-of-the-art security systems.
What is a private key, wallet address and seed
Cryptocurrency wallet address is public information that other people or services need to send money to you. It is also called a public key.
Private (private) key - on the contrary, a top secret code, to which only you should have access, it allows you to manage funds. One way to encrypt a private key is a seed phrase. It consists of 12 English words that are much easier to remember than a 64-digit set of letters and numbers. The seed phrase is also classified information. With its help, you can restore access to the wallet if it is lost.
The function of a private key is not only to authenticate, but also to sign transactions in order to record its belonging to a specific sender. When registering any crypto wallet, the first step is to create a private key. And already on its basis, public addresses are formed, of which there can be an unlimited number. Reverse decryption is impossible (you cannot find out the private key from the public key).
How to choose the best and most reliable wallet for storing cryptocurrencies
Situations in which a "hot" software-type cryptocurrency wallet is suitable:
- You do not store large amounts.
- It is important for you that the wallet is free.
- Confidentiality is not important.
- Interested in the most convenient storage option.
And here are the situations in which it is better to stay on the paper or hardware version:
- The top priority is safety. For example, if you plan to store a large amount of cryptocurrency for a long time.
- There is no need to make frequent transactions.
- You don't trust a third party and want to control the private key yourself.
- Confidentiality is important to you.
- You are ready to pay ($ 50-100) for the device.
Nothing prevents you from using two options at the same time, using a cold wallet for long-term investments, and a hot one for small momentary operations.
The best long-term cryptocurrency wallets are hardware safes like Trezor and Ledger, but in any case, a lot depends on the owner himself. According to statistics, almost 80% of digital wallet hacks are due to a careless attitude to security rules. Everyone knows general recommendations for working with virtual coins, but not everyone tries to follow them.
- The more complex the passwords and passphrases, the worse for hackers and the better for you. The main thing is not to lose them in any case and do not store them in electronic form, even on a USB flash drive.
- Use all the security options available on this resource and never download cryptocurrency programs from unverified sources.
- Please check the shipping address carefully when performing an outbound transaction.
- Do not send private keys to anyone.
Before choosing one or another storage method, read the articles that contain the top cryptocurrency wallets for the current period. Then carefully study the reviews of other users on the forums and on social networks.
In any case, when choosing a cryptocurrency wallet, you should pay attention to several factors. Does it support secure two-factor authentication? Is there a multi-signature feature? What is the provider's reputation? How easy is the interface to use? And so on - everything that matters to.
Questions and answers
1. What is a cryptocurrency wallet?
A cryptocurrency wallet is a private key and its corresponding public addresses.
2. What are the wallets for storage methods?
Hot and cold.
3. What are cryptocurrency wallets?
Software, hardware and paper.
4. Which wallet should you choose?
It all depends on your needs. If safety is a priority, then paper or hardware. If ease of use and additional functionality - then software.
5. How to ensure the security of key storage?
Set long and complex passwords, connect 2FA where possible. Make backups. Keep hardware and paper wallets in a safe place.
6. Does a crypto wallet only need to store cryptocurrency?
Many programs also offer additional functions, such as managing a cryptocurrency portfolio or instantly exchanging one currency for another.
7. Is the use of a crypto wallet anonymous?
Relatively. You do not indicate your name or passport information anywhere. However, all transactions on the blockchain are open for viewing and, in theory, someone can compare them by amounts and directions, thereby finding out your identity.
8. What kind of hardware wallets are there?
The most popular brands are Ledger Nano, Trezor, Keepkey. Their average cost is in the range of $ 50-100.
9. What are ERC-20 token support wallets for?
For storing digital assets that run on the Ethereum blockchain.
10. When transferring cryptocurrency from a wallet, you need to specify Memo, Destination Tag, Message, Payment ID. What does this mean?
It is a unique payment identifier for cryptocurrencies EOS (EOS), Ripple (XRP), Stellar Lumens (XLM), NEM (XEM), Monero (XMR). Usually it is required to indicate the exchanges. If not specified, then the payment may not be credited.
CONCLUSIONS AND CONCLUSION
- Cryptocurrency wallets are a shell for managing private keys and gaining access to public addresses where cryptocurrencies are stored. Cryptocurrency wallets are hot and cold. They are divided into the following types: software, hardware, paper.
- Which crypto wallet to choose? It depends on many conditions. The most important thing is security, the ability to save a private key or seed phrase. If you need to store a large amount, then it is better to buy a hardware wallet. For those who trade on the exchange, you can store the cryptocurrency on it so as not to pay a commission for the transfer and quickly make transactions. It is more convenient to store ERC-20 tokens on the crypto exchange, rather than downloading a separate wallet for each type.
Post a Comment