If you have not been living under a rock, you must be aware of the growing buzz around cryptocurrencies like Bitcoin. However, trading in cryptocurrencies is not as simple as exchanging a dollar with your best friend. There are some essential elements that you need before you are able to jump in the ever-rising cryptocurrency game. One of these elements is a Cryptocurrency Wallet.
Before we get to that, let me briefly explain you how cryptocurrency works. Each user has a unique set of public and private key which is used to make a transaction. In simpler terms, a transaction is just an entry in the block chain which is associated to the user’s public key. And in order to move around your cryptocurrency or get it exchanged, you need your unique private key to unlock it.
A cryptocurrency wallet is a secure digital wallet that you can use to store, send, and receive digital currencies like Bitcoin. There are several digital currencies that have gained some serious traction lately. And this article will help you choose a single wallet to handle multiple cryptocurrencies as per your needs.
Here is our pick for the top 5 cryptocurrencies for which we’ll be suggesting you different types of wallet:
1. Desktop Wallets
Desktop wallets are software that is downloaded and installed on a desktop or a laptop. Once installed, you can access your wallet only using that particular system. Your private key is stored in your system, but as your system might still get connected to the internet, it is inherently insecure. Nevertheless, Desktop Wallets are perfect for people who are just starting out in the cryptocurrency world and want to store a small amount of cryptocurrency.
Recommended Wallet: Exodus is the world’s first multi-cryptocurrency desktop wallet and its user-friendly and intuitive UI makes it perfect for novices who are starting out in the cryptocurrency world.
Second recommended wallet – Jaxx. Key benefit: you can install it on your computer and mobile phone and sync them. As far as I know, this is the only wallet you can access at the same time from various devices. Comes in very handy as you might not have your computer with you all the time – but you do have your mobile.
2. Online Wallets
These wallets are web-based wallets, and they store the user’s private keys online on a third-party server that can be accessed from any device. Online wallets allow ease of access and are extremely easy to sign up for. But as the private keys are stored online, they are highly susceptible to attacks from prying hackers. So if you are planning to invest a lot of money in buying cryptocurrencies, you should stay away from online wallets.
Recommended Wallet: Coinpayments is an extremely popular online wallet that allows over 85 cryptocurrencies to be stored in the wallet. It allows free registration and several online stores accept direct payments from the Coinpayments’ wallet. So instead of using it only for trading purposes, you can directly use it to buy things online. Coinpayments charges a small amount on every transaction that you make (0.5%) It is also secured with BitGo to provide additional security.
3. Mobile Wallets
As the name suggests, these wallets run on a smartphone or tablet by installing an app, and they store your private keys on your mobile. Mobile Wallets provide ease of accessibility and features like QR Code Scanning. But as mobile phones can easily get stolen, mobile wallets are even less secure than online and web wallets.
Recommended Wallet Jaxx is hands-down one of the best multicurrency mobile wallet that is present out there in the market. Its intuitive UX, accessibility from any platform (i.e. from mobile or desktop) and high security makes it a great fit for people who are just starting out and want to deal with small cryptocurrency amount. It’s key benefit: you can install it on your computer and mobile phone and sync them. As far as I know, this is the only wallet you can access at the same time from various devices. Comes in very handy as you might not have your computer with you all the time – but you do have your mobile.
4. Hardware Wallets
These wallets store the private keys on a piece of hardware and are highly secure as they are not connected to the internet. These devices need to be plugged into the desktop or laptop while making any transactions. They are convenient to use and you can add an additional layer of security by setting up a passcode to access the device to prevent any misuse in case it’s stolen.
Recommended Wallet: Ledger Nano-S is one of my favorite cryptocurrency wallet because of its sleek design, easy onboarding process, intuitive UI and reasonable price (comes for around $65). It also supports multiple cryptocurrencies and is a must-have if you want to deal with large amount of cryptocurrencies. Another key player is Trezor – although at a higher price, but they are the first hardware wallet out there and have presumably the most experience.
5. Paper Wallets
Before Hardware Wallets came into the picture, Paper Wallets were the standardized wallet that people seeking security from hackers used to go for. These wallets are simply a sheet of paper on which your Private Key, Public key and QR-Code is printed. You can go to websites like blockchain.info and bitaddress.org to generate and print these keys. In order to make a transaction, you will have to use some online wallet services.
You should create multiple physical copies of the paper in case it gets torn or damaged and store them in secure places like a locker.
How to secure your wallet?
Whatever wallet you choose, you will have a SEED – a backup key or set of words that let’s you restore you wallet should you lose access to it. (If you lose your mobile, laptop, usb stick / hardware wallet).
Store this seed in a secure place away from where you spend most of the time.
Best is to have a copy stored in another household you trust – so even if your household should burn out, you won’t lose access to your cryptocurrencies. Give a copy of these keys to a trusted friend or family.
Make sure that whatever happens, you will be able to access your wallet, otherwise you are at risk of losing access to your investment completely.
So there you have it folks! The most popular cryptocurrencies along with their best wallets. Start your journey into the exciting world of cryptocurrency today!