With the crypto market suffering some pretty heavy volatility lately we thought it would again be a good time to explore the best wallet for keeping your crypto, be it Bitcoin, Ethereum or ApeCoin, safe.
Choosing the right crypto wallet can have a massive impact on keeping your funds secure and hiding your private keys. With the influx of crypto investments come a wide range of wallet options, and choosing the “right one” can be tricky. Before jumping in, there are various factors to consider, such as security features and transaction fees.
Users may also face the question: ‘is a crypto wallet entirely necessary?’ The truth is many crypto trading platforms or exchanges, allow users to store their assets within a ‘built-in wallet,’ basically leaving them in the custody of an exchange. Coinbase, Kraken and Gemini are all examples of exchanges that also serve as banks for your crypto assets.
At the end of the day, there’s no right or wrong answer – to choose a wallet or entrust the process to a third party – but if you decide on choosing a wallet for crypto, don’t just simply pick the first one that pops up on a subreddit or search engine.
What’s a crypto wallet anyway, do I really need it?
A crypto wallet is a type of online software that securely stores the credentials for your crypto assets. So, it safeguards the encrypted keys that provide access to your digital currencies, be it Ethereum (ETH), or Bitcoin Satoshi’s Vision (BSV). Crypto wallet technology continues to evolve as further innovations and new products enter the market, improving accessibility and user protection.
Also, while it might seem like your digital currencies live in the crypto wallet, they don’t. Rather, we find them on the blockchain, and you’ll need a valid private/public key combo to access them.
And yes, your wallet holds these meticulously encrypted codes away from prying eyes.
Losing those private codes or having them stolen is like misplacing your bank account PIN access. So the quality and reliability of your crypto wallet matter a great deal for security reasons.
So, it’s not a straightforward process?
Unfortunately, there’s no perfect version of a crypto wallet, and choosing the best fit depends on what you prioritize as a crypto owner. It’s like picking a bank, and there’s no ‘king of all banks.’ -although don’t tell that to Goldman Sachs.
You need to consider the unique features of each wallet and choose the one that resonates the most with your specific investment concerns and preferences. For example, you might consider keeping a lookout for a wallet that supports multiple cryptocurrencies for added convenience since most wallets only support one cryptocurrency.
Cold wallets and hot wallets
While many types of crypto wallets are available in the market, they fall under two general categories – hot and cold.
Cold crypto wallets live offline on a device, working best for owners who wish to stow their long-term investments securely away from the internet. The downside? They’re pretty inaccessible compared to hot wallets, and it could be troublesome if you want to make a quick exchange.
Hot online wallets are for you if you are an active investor who manages transactions regularly and seeks unmatched accessibility to your stash. These are online wallets usually connected to an exchange, and they’re incredibly user-friendly. Hot crypto wallets may also live on a dedicated program on your desktop or via a smartphone app.
There’s a learning process involved in maintaining a crypto wallet, and it’s best to be well-versed on the subject before starting one. As a novice investor, you may safely entrust your assets with the built-in wallets on a crypto trading or exchange site. Many of the top exchange platforms offer added security and insurance coverage in the event of a cybersecurity breach.
But ultimately, it’s best to move your valuable crypto assets to your personal wallet because it gives you more control over your account. Despite the assurance and security offered by mainstream exchanges, they remain highly exposed to hacking activities.
Malicious actors have turned to a series of sophisticated means of penetrating the defense of crypto wallets with insidious methods such as phishing, 2FA exploitations, and malware attacks.
You can improve the security of your crypto assets with granular control over your wallets or by entrusting a reliable exchange. You’ll have full accountability for your keys if you decide to go the non-custodial route, so make sure you have proper backup strategies in place and be extremely careful when handling your crypto wallets. So prepare to update your network security, apply reliable password managers, and everything in between to keep your accounts guarded.
Jay Speakman is a technology writer based in San Francisco, California. He writes on the topics of blockchain, cryptocurrency, DeFi and other disruptive technologies. Clients include Avalanche, Be[in]Crypto, Trust Machines and several blogs devoted to blockchain gaming. He will not rest until fiat currency is defeated.