If you want to store your cryptocurrencies in a safe place, it is best to buy a wallet that meets these characteristics. In addition, a wallet is not only used to store your cryptocurrencies in a safe place, but it also simplifies your cryptocurrency transactions, and now I will tell you why exactly.
How cryptocurrency wallets work
I’m going to explain how wallets work so that you consider this point when choosing the best one, as it relates to the security of your future wallet. Cryptocurrency wallets work as a kind of digital portfolio and consist of two main factors :
Public Address – This will translate as the IBAN address of a bank account. You usually give it to people for income, right? Here they work in a similar way, you can share it and it will be important to send or receive cryptocurrency safely, what it does is it identifies your wallet and facilitates transactions.
Private key : this is different, the most important thing is that it is private, only you have to know it and keep it like gold bullion, and no, I’m not exaggerating. It is a password that allows access to your funds, like a key to a safe. If they steal it from you, you will be left without it. Your private key will also be needed to authorize the transactions you make from your wallet.
Something you should always keep in mind is that cryptocurrencies are decentralized assets, meaning that they are not dependent on a legal entity, and contrary to what many people usually think, this is positive because you are not dependent on any authority or legal entity such as banks.
However, you must understand one thing very clearly: Since you are not dependent on anyone, what I tell you in point 2 is extremely important, if you lose your private key, there is no organization that will help you get your funds back . And, as the saying goes, “better safe than sorry.” To that end, not only do I advise you to back up, but you should make sure that the place where you store both your funds and your wallet is secure as much as possible .
Types of cryptocurrency wallets
Considering the previous point, you will better understand cryptocurrency wallets : the two types that exist
- Hot wallets or hot wallets : they are connected to the internet, so when you create your keys and passwords, you will do so over the internet. When you store all that data (keys and passwords) you usually do so on the servers of the organization that hosts your wallet.
- Cold wallets or cold wallets : they are NOT connected to the internet, so your keys will not be created over the internet or through the blockchain. This fact does not mean that they cannot connect to the Internet, in fact you will have to do so, but not all the time.
Within these two large groups, we can make a small classification of cold wallets or cold wallets.
Types of cold wallets
Among cold wallets, there are hardware wallets and paper wallets. Below I will show you (if you don’t already know them) the differences.
- Hardware wallet : usually they are shaped like a credit card or usb drive. Some usb’s have an OLED screen for password entry. Cards, on the other hand, are not connected to the internet or a computer, they are accessed with a private key through an exchange. They also do not have delicate electronic elements in their composition.
- Paper wallets : as you may have noticed, they are a sheet of printed paper on which the private key is stored.
Security and wallets, which are the safest?
At this point, what do you consider the safest of all? We’re going to give up one by one. First and foremost, hot or cold wallets?
From a security standpoint, we can directly eliminate the hot ones. Being connected to the Internet makes them much more vulnerable to hacking and theft. Keep in mind that many hot wallets have your keys stored on the servers of the organization you purchased them from.
What happens if those servers go down? Okay, I’ll use cold wallets for security . What about inside these? I’ll ask you another question, which is more vulnerable? paper or flash drive? If you stop to think about it, both are vulnerable if they get wet, step on each other or are exposed to high temperatures, should that happen, you will lose access to your cryptocurrencies forever.
So, which wallet is the safest? That leaves hardware wallets in the form of cards , as many of them are metal and shockproof, if they get wet too, nothing will happen. So, what type of wallet is best for me? To do this, you have to first ask yourself what type of investor you are.
If you’re a trader with a lot of daily or recurring transactions, a balance between online wallets and offline or hardware wallets would be ideal. I mean, there’s one of each. Why am I saying this? You will have a hot wallet to facilitate transactions and get them done quickly, because online will be a more flexible process.
Meanwhile, the vast majority of funds that you’re not going to use in repetitive transactions are stored in a hardware wallet so you don’t put them at unnecessary risk. bitcoin material estandar esrIf you’re a long-term trader or investor or don’t need repetitive transactions, I recommend a hardware wallet. If what you are going to do is store, the most important thing is the safety of your funds. That’s what you have to worry about. Also, if you need to make a transaction, you can do it just fine.
The best cold wallets for cryptocurrencies
Bitcoin material. For bitcoins, the safest wallet by far is the bitcoin material. It is a heavy-duty hardware wallet; shocks, fires and floods. It is unbreakable and ideal for holding funds for long periods of time. It is in the form of a stainless steel credit card, it is aesthetically pleasing and very convenient. In addition, their prices are very cheap. On the other hand, it is very easy for novice investors and people who are not so closely connected to the world of cryptocurrency.
Ballet is a hardware cold wallet for bitcoins. The upside of this wallet is its simplicity for beginners and mid-level cryptocurrency investors. It is not electronic and accessible. However, the QR code with the public address is easily peeled off and the company does not offer you a copy, you will have to print and paste it yourself. It’s the same with keys, you have access via QR, and they’re not as secure as they seem.
Electrum : it only stores bitcoins, and while many people don’t classify it that way, we include it in the cold wallet section because while it requires an internet connection to make transfers, most of the time it is disabled. It’s perfect for fast and secure transactions. What Elektrum is good at is that the keys are not transferred to a server and it is open source, meaning its revisions are higher. On the other hand, this wallet is not suitable for beginners or intermediate levels.
Among these 3, Bitcoin Material is the safest option because it is not electronic and is not installed on your computer. If you want something secure to store only bitcoins, this is a very good option.
The best cold wallets for Ethereum only
Material Ethereum : Material Ethereum is the same as Material Bitcoin but specializes in the cryptocurrency Ethereum. It is also an ultra-reliable and ultra-secure hardware wallet. Perfect for storing your ETH for a long period of time.
If you need a completely secure alternative without electronic components and only for storing ETH, this would be a good choice.
Best multi-cryptocurrency cold wallets
- Ledger : if you have a diverse portfolio of cryptocurrencies , a multicryptocurrency wallet would be ideal. Ledger supports over 1800 digital currencies and tokens. It is quite secure and can be managed from a cell phone.
- Trezor is very similar to Ledger in that it is a direct competitor. It supports about 1,000 cryptocurrencies, has a touch screen, and allows users to instantly access third-party exchanges like Changelly and CoinSwitch from the Trezor interface. You’ll have access to backups and a PIN to access your keys.
The best hot wallets for Ethereum
- MyEtherWallet : it is a free hot wallet or wallet for Ethereum, it is virtual and to get it we have to register on its website. It is a simple model that can be used for transactions. However, it is not safe to store large amounts.
- Metamask : of the hot software wallets for ETH it is the most commonly used. Like the previous one, it is mainly used for transactions. It is used from a browser extension or from a mobile app. It can also be made compatible with hardware wallets, as one of the drawbacks of Metamask can be security.
The best hot bitcoin wallets
Mycelium is open-source and designed for Bitcoin as a mobile app for iOS and Android, bad news for those using a computer. It’s fast and compatible with Ledger and Tresor.
Bitcoin Core : This wallet was born almost simultaneously with the advent of Bitcoin, it is one of the first. It is a free open-source software wallet, but it takes up quite a bit of storage space. Being open source, it has a pretty high level of security in what is called a hot wallet.
The best multi-currency hot wallets are
Coinbase : you’ll also have a hot wallet and cryptocurrency exchanger there. It has a mobile app and is known not only for its secure exchanges , but also for the fact that it includes a wide range of cryptocurrencies.
- Exodus : It is a software wallet that also allows you to store a variety of cryptocurrencies. It is easy to use, secure because it includes hardware encryption and two-factor authentication, and offers plenty of help and support. Of the disadvantages: it can only be used with a computer (unlike Mycelium), it is connected to the Internet and is not 100% open source.
- Trustwallet : it is a hot wallet more focused on transactions between mobile devices and cryptocurrency transactions. It has good support and is an easy-to-use wallet. While the wallet does offer private key encryption, there is always the risk of your mobile device being hacked or infected with malware. It may also have compatibility issues with some mobile devices.