I have been fascinated by crypto for a long time now, and I enjoy sharing what I have learned about it on ToughNickel.
What Is a Cryptocurrency Wallet?
A crypto wallet is a software that makes it possible to hold, receive, and send cryptocurrency. Every wallet has a private key and a public key.
Your public key is what identifies your wallet on the blockchain. Your public key is like an email address; when someone wants to send you cryptocurrency, they send it to this address.
Your private key is a string of 64 characters that can be generated from a 12-word seed phrase. It’s like the password to your public key. It is used to give you access to the crypto associated with your public key.
"Not Your Keys; Not Your Coins."
This is an old saying in the crypto community, and it means that you have no control over your crypto unless you have the private key to your wallet. If you hold your coins on an exchange for example, then the exchange technically has control over your coins, and a shady exchange could run off with them.
Even if your exchange is trustworthy, somebody could hack their database to get users' private keys. So, if you have lots of crypto, it's definitely a good idea to get your own wallet that only you have the private key for.
What Kinds of Wallets Exist?
There are four main types of wallets that you should use. You shouldn't use web wallets or exchanges to hold your coins if you plan to hold a large amount. The more you hold and the longer you want to hold, the safer your wallet needs to be.
This is a special device that holds your crypto. This is one of the safest ways to store your cryptocurrencies. The two best hardware wallet brands are Ledger and Trezor. If you buy such a wallet, then please only buy from a legitimate seller. You should never buy used or second hand hardware wallets because some scammers keep the private keys for themselves and wait until the buyer of the device deposits their crypto to the device and then steal their assets.
Mobile wallets are apps that you can install on your smartphone. Be careful which apps you use because some can be custodial, meaning that they keep the private key and control your coins. Avoid such wallets.
Most cryptocurrencies have their own official wallets, and most list trustworthy wallets on their websites. If you have many different cryptocurrencies, you can use wallets that support multiple cryptocurrencies. Exodus and Atomic are both trustworthy apps that can store many different crypto assets.
These are the same as mobile wallets except for the fact that you install them on your computer instead of your smartphone. Desktop wallets are usually more advanced than mobile wallets, and they often come with more features that can increase privacy or allow for more flexibility when it comes to signing transactions.
A paper wallet is when you print your private and public keys or a QR code (so you can scan it quickly to add them to a software wallet) and store them on paper. This is a really safe way to store your keys because paper is literally un-hackable. If you go this route, you will need to import your keys to a software wallet if you want to make a transaction.
The Best Wallets for Crypto Holders
The two wallets I recommend—one is a hardware wallet and the other is a mobile/desktop wallet—are Ledger Nano and Atomic Wallet. Each is discussed in detail below.
Hardware Wallet Recommendation: Ledger Nano (S and X)
This is the most popular hardware wallet brand in the world. Right now, they sell two different sticks. The Nano S is the cheaper version, but the Nano X can store more cryptocurrencies.
You should know that Ledger was targeted by a cyberattack that led to a data breach in July of 2020, and this led to a lot of private customer information being leaked, including postal addresses, last names, first names, and telephone numbers. However, not a single coin was stolen because Ledger doesn't have any private keys, so hackers cannot steal your crypto. This demonstrates how safe it is to store your money in a hardware wallet.
As mentioned earlier, never buy used hardware wallets—only buy brand-new from trustworthy sellers to make sure that nobody else has your recovery seed.
Mobile/Desktop Wallet Recommendation: Atomic Wallet
Atomic Wallet is a decentralized wallet that supports countless currencies and also allows you to swap between different cryptocurrencies. Atomic also gives you option to stake certain cryptos, which means you can earn interest on them.
Do You Need a Crypto Wallet?
A wallet is essential for sending, receiving, and holding crypto. Which kind of wallet you use should depend on how you plan to use your coins. If you want to hold them for a long time, then you should use a hardware or paper wallet. If you want to actually use and spend your coins, then a mobile or desktop wallet will do just fine. You could also store most of your holdings on a Ledger and keep some crypto to use on your phone. In any case, be careful with your coins and keep your keys in a place where only you can find them. Happy holding!
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2021 Krypton Currency