Aside from knowing the best cryptocurrency to invest in, make sure that you are doing your part and search for what is the best cryptocurrency wallet to put those investments in.
In this article, we will tackle about the different types of wallet. Is exchange a wallet, too? Where to put your money when you are just beginning? How about for long-term investing? Take a look of our top wallet choices for you.
What Is Crypto Wallet?
To set the discussion right about what is the best cryptocurrency wallet, let us start by explaining what a crypto wallet is. Crypto wallets are tools to store your digital assets. Some people consider exchanges as wallets, although you have limited controls in your assets when they are stored here. If you want to gain full access on your coins, choose a non-custodial wallet of either cold or hot types. Let us differentiate these further on the next part of the discussion.
Custodial vs Non-custodial
Custodial wallets are platforms where you put your coins for exchange right away. Some people do not consider these as wallets simply because the platform managers are the ones who keep the access keys to your fund, not you. That being said, they ask permission from you to either receive or send payments prior to authorizing each transaction.
For example, in order to make trades, you are required to cash-in crypto asset to exchange platforms like Binance. Binance acts a the third-party between you and another user and is bound to ask permission from you in facilitating each transaction. However, Binance reserves all the capabilities to manipulate your funds.
On the other hand, non-custodial wallets are where you can store your crypto assets while still having the only full access to your private keys. With this set-up, it is safe to say that your investments are more secured.
Before, non-custodial wallets serve as only storage and is not capable performing exchanges. However, upon the introduction of innovative platforms like Trust Wallet, you can now do transactions while still having the access keys to your funds, all in one account. Explore this feature on platforms as you continue to search what is the best cryptocurrency wallet.
Cold vs Hot Wallets
Hot wallets are those platforms where you store your fund online. People often prefer these to store the chunk of their fund that they move constantly. You possess the private keys; however, these keys are stores online. Always having the risk of hackers and system glitches, it is not wise to keep an extra-large among of investments here.
Cold wallets are the exact opposite. These wallets let you keep your private keys in a physical storage that can be disconnected online. This feature makes them a more secured option in managing your fund. People use this type to store funds that are meant for long-term investing. Let its value grow by appreciating over time.
The biggest drawback of cold wallets is that they can be lost, stolen, or broken like any tangible object. If this happens, you can easily lose all your hard-earned investments. Some cold wallets will let your recover your funds by having your seed words. If these are available, write them down right away and store them in a secured place.
Top Choices: Beginner Wallets
Hot wallets are more recommended for beginner crypto investors. For one, they are mostly free. And two, some of these platforms will allow you to store your investment and do transactions on the same app.
Our top picks to what are the best cryptocurrency wallets for beginners are Exodus and Trust Wallet. They are both free and will let you explore the ins and outs of the crypto arena.
The Exodus Wallet is a non-custodial wallet that is free and can be installed with both computer and mobile. Here the private keys for your assets are generated then encrypted locally, nothing will have to pass through the cloud. You are the only one who is given access to it and has the full control over it.
This wallet supports more than a hundred of cryptocurrencies. They are also capable of doing in-wallet trading while growing your money with interest. The biggest drawback is that its source code is free, so third-party developers cannot review it and evaluate the promised security of its architecture.
Just 6 months older than Exodus, the Trust Wallet has 5million users and remains to be among the top choices for hot non-custodial wallets. They also allow you to have the sole access to the private keys for your funds. However, the current Trust Wallet applications are only available in mobile operating systems – iOS and android.
Unlike Exodus, Trust wallet has open source-code which has been continuously reviewed by developer community to evaluate the quality of the system architecture.
Top Choices: Long-term Investor Wallets
If you have been in the business for a long time or you want to make a huge investment, cold wallets are the way to go. This will cost you extra but if you do want to secure that money, this tool is necessary and the answer to what is the best cryptocurrency wallet for you.
Lodger Nano X
Ledger Nano X is probably the most popular cold wallet. It is easy-to-use because of its intuitive design. The tool supports over a thousand cryptocurrencies.
Some people do not opt to this wallet because of its high price. Although the source code is not open to the public, it has a reputation of being highly secured.
If you are looking for an alternative to Nano X, take Trezor One. It has the great mix of security and money costing only half of Nano X’s price. It is open source, so community of developers continuously evaluate its quality.
The biggest trade-off when choosing Trezor One is that it has no mobile support. If you are looking to keep XMR, XRP, and EOS currencies, sad to say, these are not supported by Trezor. Learn more about cryptocurrency wallets here!
Different crypto wallet types serve different purposes. Exchanges can store funds but are not really the type of wallet where you have full control on your funds. For beginners, choose a non-custodial hot wallet that gives you the sole access to your account while still allowing you to explore and so transactions. For long-term investments, trust a cold wallet for the added security.
Whatever your current goal is on the cryptocurrency arena, take time to answer what is the best cryptocurrency wallet for you. Consider the choices we offered and make a wise decision about it.