What is a crypto wallet?
Crypto wallets are digital wallets that store your crypto assets. You can relate it to your physical wallets. You keep all your fiat cash money, debit cards, credit cards, etc in your physical wallets and you keep the wallet always with you protected. If you lose your physical wallet or if it gets stolen, you lose all your cash money, and cards. Similarly, crypto wallets store your private keys to different cryptocurrencies, keeping your crypto assets safe and accessible only to you. It also allows you to send, receive, and spend cryptocurrencies like Bitcoin and Ethereum.
They come in many forms, from hardware wallets like Ledger (which looks like a USB stick) to mobile apps like Coinbase Wallet, which makes using crypto as easy as shopping with a credit card online.
Why crypto wallets are important?
Unlike a normal wallet, which can hold actual cash, crypto wallets technically don’t store your crypto. Your holdings live on the blockchain, but can only be accessed using a private key. These wallets store your private keys. Your keys prove your ownership of your digital money and allow you to make transactions. If you lose your private keys, you lose access to your money. That’s why crypto wallets are very important.
What are the different types of crypto wallets?
Depending upon security and usability, crypto wallets range from simple-to-use apps to more complex security solutions. The major types of crypto wallets in use are below -
- Paper wallets: Your Private Keys are written on a physical medium like paper and stored in a safe place. This of course makes using your crypto harder, because digital money it can only be used on the internet.
- Hardware wallets: Your Private Keys are stored in a thumb-drive (USB or similar) device that is kept in a safe place and only connected to a computer when you want to use your crypto. The idea is to try to balance security and convenience.
- Online wallets: Your Private Keys are stored in an app or other software – If you are going for this type of wallet then always look for one that is protected by two-step encryption. This makes sending, receiving, and using your crypto as easy as using an online bank account, payment system, or brokerage.
- Hot Wallets: Any cryptocurrency wallet that is connected to the internet is called Hot wallet. Generally, hot wallets are easier to set up, access and accept more tokens. But, hot wallets are also more susceptible to hackers, possible regulation, and other technical vulnerabilities.
- Cold Wallets: Any cryptocurrency wallet that is NOT connected to the internet is called a Cold wallet. Generally, cold storage is more secure, but they don’t accept as many cryptocurrencies as do many of the hot wallets. Cold storage devices (aka. Trezor, Ledger) also cost close to $80 USD, whereas hot wallets are free.
Each type has its tradeoffs. Paper and hardware wallets are harder for malicious users to access because they are stored offline, but they are limited in function and risk being lost or destroyed. Online wallets offered by a major exchange are the simplest way to get started in crypto and offer a balance of security and easy access. (Because your private info is online, your protection against hackers is only as good as your wallet provider’s security – so make sure you look for features like two-factor verification.)
Top 10 crypto wallet in 2021
Following below is a list of Top 10 Crypto Wallets in 2021, with their popular features and website links. The list contains both open source (free) and commercial (paid) software.
1. Coinbase Wallet
Coinbase is the biggest crypto exchange in the world that has recently gone public. It also provides an online hot crypto wallet that can be utilized for purchasing, selling, transferring, as well as storing digital currency. It securely stores a wide range of digital assets in offline storage. This platform supports more than 100 countries.
Major features of Coinbase wallet -
- Multi-Coin Support: Coinbase wallet support multiple digital currencies like BTC, BCH, ETH, ETC, LTC, and all your ERC-20 tokens.
- Digital collectibles: Coinbase also provides you NFT support so you securely store your cats, monsters, art, and other ERC721 collectibles in a single beautiful gallery.
- Secure storage: Coinbase protects your private keys with Secure Enclave and biometric authentication technology.
- App: Coinbase provides an app for both iOS and Android devices.
2. Exodus Wallet
Exodus is an online crypto wallet that has the most intuitive interface. With exodus, you can securely manage and exchange cryptocurrency on desktop, mobile and hardware wallets. One of Exodus’s most popular features is the ability to swap between a growing number of cryptocurrencies. Exodus currently allows for swaps between over 100+ different cryptocurrencies.
With its simplistic emotional design, this wallet is great for beginners just getting into the crypto space. It also has great support, which is an essential feature for beginners getting into what many would consider a confusing market.
While it is great for beginners, more advanced users may find it lacking in some features. First, Exodus is a closed source wallet. This goes against the ethos of the idea of Bitcoin and blockchain and can create some security concerns as its code is not open for everyone to see. Instead, users rely on the Exodus team to ensure there are no holes in the security of its wallet.
Exodus also integrates with your Trezor hardware wallet and also provides portfolio tracking your assets stored in its wallet.
3. Trust Wallet by Binance
Trust Wallet is the official multi-cryptocurrency mobile wallet app of the biggest global cryptocurrency exchange Binance. Binance acquired Trust Wallet in July 2018. The crypto wallet app startup team has made great strides, leveraging the exchange’s resources to expand its utility to multiple cryptocurrencies and decentralized apps (dApps).
Trust wallet supports 40 blockchains and 160k+ assets. It also allows token staking, swapping, and trading inside the wallet keeping it all secure and protected. It is available on the web, iOS, and Android.
4. BlockFi Wallet
BlockFi mainly is a cryptocurrency bank that also offers a mobile crypto wallet. It has raised over $50 million in its latest Series C funding round and on its path to grow to become a new-age bank. BlockFi is threatening to both disrupt and legitimize the Bitcoin wallet space with its approach to wallets that resembles how the banks we are all familiar with operate. Unlike many other wallets, BlockFi treats your savings with them as an interest-accruing account, much like a normal bank account.
BlockFi gives up to 5% APY on your Bitcoin and interest accruing daily, BlockFi has some compelling rates of return. Further, its platform also serves as both a trading and lending platform. Its trading platform boasts no fees and interest gained on any coins you purchase, making it an intriguing option. Its interest rates are above savings account rates.
BlockFi’s cryptocurrency-backed loans compete with those of traditional lending institutions, with the company hoping to one-day offer mortgages and car loans through its platform. At the time of writing, you can only get rates as low as 4.5%, and only to a maximum of 50% of the cryptocurrency you have on deposit with BlockFi.
So as a result BlockFi cryptocurrency wallet closely resembles a classical bank. You can earn competitive interest rates on a handful of different cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Gemini Dollar (GUSD), and gold-backed cryptocurrencies. The company intends to offer more as it continues to grow.
5. Blockchain.com Wallet
Blockchain.com is the safest and most popular wallet. It is used for investing and storing cryptocurrencies. It is one of the most secure Bitcoin wallets which keeps track of who owns the digital tokens.
Blockchain.com works with relatively few cryptocurrencies — only BTC, ETH, and a handful of others, including two stable coins pegged to the U.S. dollar. Its cryptocurrency exchange and wallet do not come linked by default, but you can access that option after you set up both your wallet and account. You may, however, maintain your own cold wallet separately from the exchange, ensuring further control.
With much of its source code and APIs made publicly available through GitHub, Blockchain.com has positioned itself as a bit of a darling for those who are interested in mucking about with automated trading scripts and bots. This has also helped on the security front, as multitudes of users and interested parties can help find and address any flaws that may crop up.
Blockchain.com also provides iOS and Android apps.
6. Electrum Wallet
Electrum is the oldest Bitcoin wallet available in the market. It is one of the best wallets for Cryptocurrency that offers excellent security features and keeps your Bitcoins secure. While this wallet is bare-bones in terms of its user interface and its commitment to only Bitcoin, it excels at this primary function. Electrum is also more suited for advanced users due to its complex options.
Electrum is open source, allows its users to set custom transaction fees, and has the option to choose between legacy Bitcoin and Segwit. It also offers users the ability to determine the level of security they wish to use. For example, you can create a standard wallet, one with 2-factor authentication, or a multi-signature wallet. You can also elongate your seed phrase with custom words.
Electrum is perfect for the more advanced Bitcoin holder who wants great security features and customizability all in a simple layout. Electrum also supports integration with hardware wallets like Trezor.
7. Mycelium Wallet
Mycelium is an open-source, mobile-only hot Bitcoin wallet. Mycelium currently only supports Bitcoin, ETH, ERC-20 tokens, and FIO token. In some ways, Mycelium is quite similar to the Electrum wallet with some of the differences being that it is mobile-only, has a more refreshed user interface than Electrum, and also has a built-in exchange.
Mycelium, like Electrum, is one of the earlier wallets in the space. Also like Electrum, you can set custom transaction fees so you can choose how long you’re willing to wait for a transaction to be completed.
Mycelium also has a few more interesting features such as hardware wallet support, which allows users to hold their Bitcoin in an offline storage device while still using Mycelium’s user interface to see their holdings.
8. Ledger Nano X Wallet
Ledger Nano X is an open-source cold wallet that is widely compatible with many currencies and apps. Ledger Nano X is a powerful little piece of hardware that connects to over 1,500 cryptocurrencies with its system out of the box and has the ability to sync with a hot wallet over either USB or Bluetooth.
With support for plenty of different cryptocurrencies, from Bitcoin and Ethereum to lesser-known Litecoins, it provides a powerful option for your crypto wallet. There is however a limitation to the Ledger Nano X that you are limited to only 100 different cryptocurrencies of the more than 1,000 available with their system.
9. Trezor Model T Wallet
Trezor is the most recommended secure and cold hardware wallet out there in the market. It is also called the “bulletproof” Bitcoin wallet, it boasts several security features including a password manager app built-in, two-factor authentication, and compatibility with ERC-20 tokens that ensure secure exchanges on the Ethereum platform.
The hardware comes with a USB adaptor and it works with Windows, Linux, Mac, and Android out of the box. Further, it has a suite of developer tools that means that there are several integrations still being developed for it. Out of the box you need to do some basic software installation to help ensure the absolute security of your device, but once that is complete it is compatible with hundreds of cryptocurrencies without further effort.
In terms of downsides, Trezor is a little on the pricier side when compared to the Ledger Nano wallet. Further, it is a physical piece of hardware, making it susceptible to physical theft or loss — a limitation that all hardware-based wallets have.
MetaMask is the most popular software cryptocurrency wallet used to interact with the Ethereum blockchain. It allows users to access their Ethereum wallet through a browser extension or mobile app, which can then be used to interact with decentralized applications.
MetaMask is available as a browser extension and as a mobile app, it is equipped with a key vault, secure login, token wallet, and token exchange—everything you need to manage your digital assets all in one place.
MetaMask also provides the simplest yet most secure way to connect to blockchain-based applications. You are always in control when interacting on the new decentralized web. MetaMask is open-source and been supported by a strong community from across the globe.