Hackernoon logoTypes of Crypto Wallets and How to Choose Best Crypto wallet by@Rob-Lemos

Types of Crypto Wallets and How to Choose Best Crypto wallet

Rob Lemos Hacker Noon profile picture

@Rob-LemosRob Lemos

Writer and analyst

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Types of Crypto Wallets and How to Choose Best Crypto Wallet?

Cryptocurrency is slowly establishing itself as a global phenomenon, especially now that owning one has become fashionable. The emergence of cryptocurrency as a valid asset class has spurred the explosion of various sectors of crypto, addressing fundamental issues with digital assets. One such sector is the cryptocurrency wallet market, which has been at the forefront of the crypto narrative.

You will agree that choosing a crypto wallet is one of the main requirements for anyone who wants to participate in the crypto market. And judging by the number of options available today and the incessant cases of crypto theft, it is imperative that you do your research thoroughly before making a decision, as to the best crypto wallets. In this review, we'll explore the fundamentals of cryptocurrency wallets, highlight a few factors to consider when choosing a wallet, and introduce you to our list of the ย best cryptocurrency wallets.

What is a Crypto currency Wallet?

A typical cryptocurrency wallet is a private key storage tool, which works more or less like passwords to access digital assets. Furthermore, this technology enables cryptocurrency holders to track their digital assets and facilitate transactions. Simply put, crypto wallets are applications or tools that allow cryptocurrency holders to track, spend, and store their coins. There are two types of cryptocurrency wallets. These two classes are software and hardware wallets, and both have unique modes of operation that cater for participants with different needs.

Desktop Cryptocurrency Wallets

Desktop wallets transcend some of the security weaknesses associated with other types of software wallets available today. With that said, you will need to download the blockchain for the currency of your choice before you can use a desktop wallet. It goes without saying that this requirement is a major drawback for users, as downloading all content from an established blockchain, such as Bitcoin and Ethereum, could be time consuming and resource intensive.

Software Wallets

A software wallet is an idea that embodies applications that enable cryptographic storage infrastructures. Wallets that fall into this category are online or web-based wallets, mobile wallets, and desktop wallets.

Online Cryptocurrency Portfolio

Online cryptocurrency wallets are cloud-based applications that provide wallet services to cryptocurrency professionals. Users should simply enlist on the site, produce a private key, appoint a cryptocurrency to that key, and begin transacting. The simplicity of this process and the fact that it allows instant access to your assets makes online wallets attractive to a wider population. However, there is a downside.ย 

Being always connected to the Internet makes these wallets vulnerable to attack. Regardless of this downside, online wallets are still one of the best options for cryptocurrency traders. This allows them to execute transactions on crypto exchanges faster because the wallet is always online. If you think this type of wallet is the best for your needs, there are some security measures that you should consider to mitigate the risk of losing your funds to cryptocurrency thieves, when looking for the best crypto wallets online.ย 

Mobile Cryptocurrency Wallets

Mobile wallets work almost the same as crypto wallets online. The only difference is that the former are smartphone apps that help users access their funds on the go. Since the wallet is just a click away on your mobile phone, you can track and transact from anywhere without having to run into common web wallet problems. Additionally, these wallets come with features that allow direct payment for services and products in retail stores that accept cryptocurrencies. Although this is a fact, mobile wallets have similar security risks associated with online wallets. Similarly, losing your phone could spell the end of your crypto holdings, especially if your mobile wallet provider has not implemented measures to help you deactivate your wallet account.

How We Collected List of the Best cryptocurrency Wallets?

We understand that valuing cryptocurrency wallets is not an easy task. Therefore, we have put together a list of the best cryptocurrency wallets that have performed remarkably well after undergoing a detailed analysis in relation to the recommendations mentioned earlier in this guide. We look at the number of coins each wallet supports, as well as the quality of services provided for those coins.

We explore the security measures in place to ensure the wallet is impregnable. Here we have found that crypto wallets offer multi-factor authentication systems that add to the integrity of the wallet. In our opinion, crypto wallets that do not have this second layer of protection do not take the security of their users seriously. Next, we verified whether the portfolio providers offering custody services had the infrastructure and business model to facilitate the secured portfolios. With this analysis, we were able to determine if these wallets would replace the coins lost by users, perhaps they were hacked.

Ultimately, we found the best crypto wallets that performed particularly well after going through our in-depth reviews. We hope you read our review of each one before making up your mind.

  • My Ether Wallet
  • Blockchain Wallet
  • Cryptonator Online Wallet
  • Coinbase Wallet
  • Btc.com Wallet
  • Luno Wallet

My Ether Wallet

My Ether Wallet (MEW) is a free, open-source wallet that provides users with the tools to store their cryptocurrencies and send transactions. It is different from normal web wallets where you store your crypto currency on third party servers. In MEW, users can create their wallets and transmit transactions through the full MEW node. The generation of wallets also allows users to receive funds. One of the main advantages of this is that users are responsible for their own private keys. Users also generate a password, which means that there is security in both the form of a password and a private key.

As the name suggests, MEW focuses on Ethereum and tokens on the Ethereum blockchain, such as ERC-20 tokens and ERC721 tokens. This means that there is limited support for cryptocurrencies, but MEW is a popular choice when it comes to Ethereum. MEW isn't the most beginner-friendly, but there are plenty of tutorials online on how to use MEW.

MEW also has the ability to connect with devices and other wallets. Some examples of these include hardware devices like Trezor and browser wallets like Meta Mask. MEW users were recently hacked after being redirected to phishing sites and entering confidential details. There was a significant loss of funds, but overall, the MEW handled the situation efficiently and quickly. They quickly informed users through all their communication channels. MEW also takes every possible measure to prevent phishing scams by including pop-ups every time a user enters the website to remind them to check the URL.

Blockchain Wallet

Blockchain.com is the most famous and utilized wallet. Founded in 2011, the portfolio now has more than 27 million users. The company is backed by large investors such as Google Ventures and Virgin. The company is based in Luxembourg. Safety is considered one of your top priorities. The blockchain stores your private key, which means you lose control over your funds.

The wallet design is easy to use and intuitive. The wallet is multi-sig and users have the option to enable two-factor authentication, which is a security benefit. The wallet also implemented hierarchical deterministic technology in 2016 that further improves security by not causing any address to be used twice.

The wallet supports Bitcoin, Bitcoin Cash, and Ethereum. This is limited compared to some competing wallets. Blockchain plans to add trading functionality to its wallets in the future and is actively recruiting a trading team to facilitate this. While many web wallets are completely free, there is a nominal fee for moving cryptocurrencies in or out of your wallet when using the Blockchain. Rates can be adjusted in "Customize rates".

Cryptonator Online Wallet

Cryptonator is a web wallet that allows you to store and exchange a wide variety of cryptocurrencies. Crypto-nator stores your private keys, which means it will relinquish control of them. Cryptonator has over one million active accounts and supports over 20 cryptocurrencies. The wallet can also contain a number of fiat currencies, which is an unusual feature among web wallets.ย 

It is viable with Android, IoS and web browsers. The wallet comes up short on certain highlights that contenders have, for example, multi-sig innovation and various levelled deterministic usage. Trading between cryptocurrencies is an important feature of Cryptonator. This makes it easy for users to switch between cryptocurrencies and saves them the hassle of going to an exchange and making multiple transactions in and out of their wallet.

Users have the option to enable two-factor authentication on their accounts to add an additional layer of security. Security is touted as one of the top key features of Cryptonator with bank grade security. An encrypted SSL connection is also used over HTTPS.

The wallet is mostly free, but there will be a nominal fee for sending transactions.

Coinbase Wallet

Coinbase is now all over the cryptocurrency world. They are best known for their exchange services, but they also offer a web wallet. By using Coinbase's wallet service, you allow them to act as custodians of your cryptocurrency. This means that Coinbase will store your private key by removing a level of control from you. Coinbase also offers a safe deposit box service where you control your private keys.

The wallet service offers to hold a wide range of digital assets, including ERC-20 tokens and ERC721 tokens. ERC-20 tokens are typically used in ICOs, while ERC721 is typically used for digital collectibles in decentralized applications (DApps) such as CryptoKitties.ย 

One of the benefits of using the Coinbase web wallet is that you don't have to deal with complicated crypto addresses. You can also send funds to friends using the Coinbase wallet without having to worry about addresses. Transactions can also be made off the blockchain between Coinbase wallets. This has some good and bad points, with reduced security being a potential issue, but increased performance is an advantage.

The wallet is known to be easy to use with Coinbase, offering some of the most user-friendly services in the cryptocurrency industry. The wallet is multi-sig and clients can use 2-factor validation. These add security benefits to users

Btc.com Wallet

BTC.com is a web wallet that belongs to the Bitcoin mining superpower, Bitmain Technologies. It is also available for Android and iOS. With most web wallets, your private keys are stored on the service provider's server. This gives the service provider complete control and access to your funds and also puts you in a vulnerable position in the event of an attack.ย 

One of the main advantages of BTC.com is that BTC.com does not have access to your private keys. The user obtains his own private keys in seed form. It was initially established by Block trail in 2015 and was obtained by Bit main in 2016. This means that it only works for a short time compared to its competitors, but it is an advantage to have a business. like Bit main behind him.

The wallet is mainly used for Bitcoin and Bitcoin Cash. This means that it does not support a variety of cryptocurrencies like some competitors, but its goal is to provide value to Bitcoin users. The wallet has a number of key features that some other wallets lack. It is hierarchical deterministic, multi-signature and open-source. Being open-source allows the community to evaluate the level of security applied by the wallet. Users can also enable two-factor authentication to add an additional layer of security.

Luno Wallet

The Luno wallet has been around since 2013, making it a long history in the cryptocurrency industry. The wallet currently supports Bitcoin and Ethereum, which is a limited range compared to other wallets.ย 

Luno has some features that provide benefits to users, but it is also missing some key features. Users can send cryptocurrency via email addresses or phone numbers, freeing users from dealing with complicated cryptocurrency addresses. Users can also enable two-factor authentication to add an additional layer of security.ย 

Luno can be accessed through your internet browser and is likewise accessible on iOS and Android. It actively tries to prevent phishing by reminding users to make sure the URL is correct when they arrive at the site.

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