If you plan on accumulating or trading a substantial amount of crypto, it’s time to think about getting a crypto wallet — the safest place to store your digital assets. It might be surprising that only a small percentage of Bitcoin owners are estimated to keep their coins in complete safety and privacy, but given the increasing number and sophistication of hacks, now’s the time to play it safe.
Learn: 5 Things You Must Do When Your Savings Reach $50,000
What Is a Crypto Wallet?
A crypto wallet keeps users’ public and private keys while providing an easy-to-use interface to manage crypto balances. However, before you choose a crypto wallet, it’s important to know whether it’s hot or cold.
Hot Wallets vs. Cold Wallets
The main difference between hot wallets and cold wallets is that hot wallets are virtual and connect to the internet, whereas cold wallets are often contained in USB sticks or thumb drives, which means that they can be stored in a locked drawer or safe. Due to the virtual nature of hot wallets, they are more accessible to hackers and, therefore, less safe than cold wallets.
Hot wallets are also more convenient when it comes to transferring crypto during trades or cashing out, whereas cold wallets are more practical for those who plan to buy and hold cryptocurrency.
Finally, hot wallets usually don’t cost anything to maintain, while cold wallets require you to purchase hardware.
Depending on your needs and your level of crypto-fluency, some wallets might be better suited for you.
Best Crypto Wallets
The eight best crypto wallets are:
- Best for Beginners: Coinbase Wallet
- Best for Bitcoin: Electrum
- Best for Mobile: Mycelium
- Best for Desktop: Exodus
- Best DeFi Wallet: Crypto.com
- Best for Bluetooth: Ledger Nano X
- Best for Android: Trezor One
- Easiest To Use: ZenGo
Best for Beginners — Coinbase Wallet
Coinbase Wallet is a self-custody wallet, giving you complete control of your crypto. It enables users to store all of their crypto and NFTs in one place and supports “hundreds of thousands of tokens and a whole world of dapps.”
In addition, if you’re already a Coinbase customer, you can link your Coinbase account to your wallet to easily access your crypto. However, you don’t need a Coinbase account to open a Coinbase wallet.
Online wallets offered by exchanges such as Coinbase are the simplest way to get started in crypto as they offer a balance of security and easy access and are easy to navigate.
Pros
- Easy access
- Easy navigation
- Can link to your Coinbase account
Cons
- Only available on mobile and tablet devices except for Chrome extension
Best for Bitcoin — Electrum
Electrum was created by Thomas Voegtlin in November 2011, and since then, various developers have contributed to its source code. It deems itself one of the most popular bitcoin wallets.
Another of its advantages is that Electrum has various user interfaces, as it can be used on mobile, desktop or with the command line interface. In addition, it has a two-factor authentication by Electrum and Trustedcoin and an integration with hardware wallets — KeepKey, Ledger and Trezor — for cold storage.
The wallet is a lightweight wallet, meaning it does not download the entire blockchain, making for faster transactions by using simple payment verification (SPV).
Pros
- Fast transactions through SPV
- Two-factor authentication
- Integrates with cold storage
Cons
- Only supports bitcoin
- No customer support via chat, email or phone
Best for Mobile — Mycelium
Mycelium is well-established — it was started by a team of hardware engineers in 2008 and deems itself “one of the oldest of the currently popular bitcoin wallets.”
It has long been a mobile-only software wallet and continues to be one of the best options for Android and iOS users.
Mycelium prides itself about its enhanced security, including the fact that the app is reproducible — so there’s no fatal dependence on the development team. In addition, there is no ID required and no other data collection procedures.
Another advantage is that it supports hardware wallets including Trezor, Ledger and KeepKey.
However, it’s a mobile-only app, available for iOS and Android, a probable deterrent for users who are not comfortable navigating some of the advanced features only on a mobile device.
Pros
- Well-established
- Enhanced security
- No ID required
- Supports hardware wallets
Cons
- Mobile-only
Best for Desktop — Exodus
Exodus, founded in 2015 by JP Richardson and Daniel Castagnoli, enables users to send, receive and exchange bitcoin as well as 200 other cryptocurrencies with ease. Additional advantages are that it has 24/7 customer support and lets you manage your digital assets while you’re on the move with Exodus for iOS and Android.
It is also compatible with Trezor wallets. Its design is sleek, making it easy to navigate and use, while being very secure.
According to some industry insiders, one big con is that it can be easily hacked and that it lacks some important security features, such as two-factor authentication.
Pros
- Easy to navigate
- 24/7 customer support
- Mobile app available
Cons
- No two-factor authentication
Best DeFi Wallet — Crypto.com
Crypto.com wallet is a non-custodial wallet that gives you access to a full suite of DeFi services in one place. This wallet enables users to explore the most popular DApps without having to leave the DeFi Wallet App, as well as letting users seamlessly connect to swap, farm and mine on DeFi protocols.
If you’re into NFTs, the wallet lets you easily view your NFTs and share them on social media. It is also very secure as your private keys are encrypted locally on your device with Secure Enclave and protected with biometric and two-factor authentication.
Another advantage is that it lets you seamlessly connect your DeFi Wallet App to a desktop browser and it provides 24/7 live customer support.
Pros
- Local encryption of your private keys
- Full suite of DeFi services
Cons
- Losing your private key and recovery phrase renders your funds inaccessible
Best Hardware & Cold Storage Crypto Wallets
As explained earlier, cold wallets are not connected to the internet at all times and as such face much less risk of hacking. Here are some of the best ones.
Best for Bluetooth — Ledger Nano X
Ledger is one of the most well-known brands of hardware wallets available, and its Ledger Nano X is secure. Users can buy, exchange and grow their crypto and NFTs with this Bluetooth-enabled hardware wallet.
It enables users to manage more than 5,500 coins and tokens, including bitcoin, ethereum and XRP. Ledger supports up to 100 simultaneously-installed apps.
Pros
- Bluetooth-enabled
- Supports up to 100 apps
Cons
- Relatively expensive
Best for Android — Trezor One
Trezor One is another option for a hardware — or cold — wallet. According to the company, online exchanges and wallet providers can disappear, go offline or be hacked, and hence are not reliable. That’s why a hardware wallet is the safest way to manage and trade your cryptocurrencies.
The company behind Trezor One, Satoshi Labs, was founded in 2013 and is an active participant in the Bitcoin community. It is highly respected among veteran Bitcoiners. Another advantage is that it has a strong customer support platform.
Pros
- Company is active in the Bitcoin community
- Strong customer support
Cons
- No support for iOS devices
Easiest to Use — ZenGo
ZenGo says its mission is to end financial exclusion and break the barriers of complexity by building the most accessible and safest wallet service that enables anyone to thrive in the digital economy.
One of the key differentiators is that ZenGo says its security is better than other wallets — it doesn’t use complex passwords or long phrases to store, browser extensions or special hardware. Instead, your account is secured by private facial biometrics and industry-leading encryption to keep you safe from account takeover attacks and phishing.
“In a world where passwords have made our digital lives less safe, ZenGo is passwordless, so hacks will be much harder and human errors near impossible,” according to its website.
It is also a bridge to Web3, as it allows users to discover NFTs, DeFi, crypto gaming and thousands of Dapps. ZenGo adds that it has integrated with the WalletConnect protocol to facilitate a simple and secure connection to the world of Web3 quickly and instantaneously.
The ZenGo wallet is easy and fast to set up, and it is available on the App Store and Google Play Store. It also has 24/7 customer service.
While ZenGo is available in 188 regions, some features are available only in certain locations.
Pros
- Easy to set up and use
- Secured by facial biometrics and encryption, not passwords
- Access to Web3
- 24/7 customer service
Cons
- Some features not available everywhere
Final Take
When considering a crypto wallet, the first question you should ask yourself is what matters the most to you, in terms of ease of use, frequency of trades and the functionality you are looking for.
Additional questions to ask yourself are which coins are supported, whether the wallet has a strong customer support and of course, the reputation of the company behind it.
Crypto Wallet FAQ
Here are the answers to some of the most frequently asked questions about crypto wallets.- How does a crypto wallet work?
- Crypto wallets can store as much cryptocurrency as you'd like. They use a database technology called blockchain to conduct your cryptocurrency transactions.
- In a nutshell, blockchain is a digital ledger that stores and records all sorts of data.When you move your favorite cryptocurrencies from one crypto wallet to another one, each wallet uses its own secret data to validate the transaction and sign it. This action proves that the parties involved actually own the wallet.
- What is the best crypto wallet for beginners?
- While all crypto wallets have their pros and cons, the Coinbase Wallet is a good choice for beginners. Its integration with your Coinbase account, ease of use and security make it an excellent choice for anyone just starting out in cryptocurrency.
- What is the safest digital wallet for cryptocurrency?
- Many digital wallets have excellent security. Important factors to consider are whether the wallet has two-factor authentication and encryption. Some hot wallets with strong security are Electrum, Mycelium and Crypto.com.
Daniela Rivera-Herrera and Cynthia Measom contributed to the reporting for this article.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
This article originally appeared on GOBankingRates.com: 8 Best Crypto Wallets in 2022
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
