During the very early stages of cryptocurrency popularity in 2016, there were only 8 million different cryptocurrency wallets created. Since cryptocurrencies have become more popular, this number has jumped to 40 million in mid-2019, which is a fivefold increase over a three year period. As cryptocurrencies continue to work their way into the public’s consciousness, the number of cryptocurrency wallets that have been created will naturally exponentially, potentially at an even higher rate than is currently being seen.
As the number of cryptocurrency users requiring wallet services has increased, so have the number of wallet providers across the world. Naturally, with so many options available, it can be hard to understand which wallet is the best one to suit your needs as a user. Below, you can find ways to choose the best crypto wallet that suits your individual needs.
You can download and use desktop wallets on your computer, no matter which operating system you use. In terms of security, they are relatively safe as the wallet can only be accessed on your computer, although as your computer is likely to be connected to the internet, there is always a chance that your private keys may be stolen.
It is true that when using a desktop wallet, your seed keys may be kept in a non-encrypted format, which can leave you at risk. This occurred in 2017 when users of Jaxx wallet experienced losses of $400,000 due to this issue.
Online wallets are run on a cloud-based system, which makes them incredibly convenient to use as you will be able to access this type of wallet from almost any location, so long as you have an internet connection.
Despite this, storing your private keys online in a centralized manner makes your holdings a lot more vulnerable to attack from malicious actors. Online wallets are normally used by a number of cryptocurrency exchanges and thus cryptocurrency exchanges are regularly being hacked, with as little as eight seriously notable hacks occurring in 2019.
Mobile wallets are incredibly similar to desktop wallets, although as the name would suggest, they are built to work on your mobile phone. With mobile devices being a huge part of the modern world, it isn’t surprising that mobile wallets are some of the most convenient on the market at this time. They are also known for having high-quality user-interfaces.
Another benefit of mobile wallets is that your keys are directly onto your device, although with some mobile platforms having questionable security, mobile wallets can be prone to glaring security issues. Some mobile wallets even store keys on a cloud system, leaving them even more open to attacks.
A 2017 report by Californian security company High-Tech Bridge demonstrated this lack of security with crypto mobile apps, stating that among 30 different cryptocurrency apps with over 100,000 downloads, “93 percent contain at least three medium-risk vulnerabilities and 90 percent contain at least two high-risk issues”.
Hardware wallets are the premium option for individuals that are looking to hold their cryptocurrencies in the long-term, with their enhanced security features. As opposed to software wallets, a hardware wallet will store your private keys on a physical device. A large number of these wallets are designed to keep your cryptos safe, even on a computer that has been infected.
A downside of hardware wallets comes in the form of their prices.
Paper wallets are a type of physical wallet that allows you to store your keys in print format, usually in the form of a QR code. Despite your initial thoughts, paper wallets are an incredibly secure method of storing your cryptocurrencies as to spend your cryptos, you will need to transfer the funds to a software wallet.
One of the main, obvious drawbacks of paper wallets is the fact that they can be destroyed, stolen or lost very easily if they are not stored appropriately, which will lead to the overall loss of your holdings.
The majority of cryptocurrency wallets don’t require you to spend any money to use them, although it should be noted that certain wallets such as hardware wallets will require you to make a small investment to purchase them. If you intend to keep a hold of your cryptocurrency for a long period of time, then it is recommended that you invest in a hardware wallet.
An example of lower-end pricing for hardware wallets can be found with the Ledger Nano S at $59 and the Trezor One costing as much as $78.
Making sure that nobody can steal your cryptocurrency holdings is one of the most important factors to consider when selecting your cryptocurrency wallet. When you are analyzing different options for your cryptocurrency wallet, you should research their security features and their reputation. To ensure the highest possible level of security for your holdings, you should consider a hardware wallet.
Some additional tips to help keep your holdings secure can be found here.
Ease of Access
If ease of access is most important to you, mobile and online wallets are the most suited to your needs. You can get access to them from any location, no matter what device you happen to be using at the time.
Is the Wallet Multicurrency?
If you are going to be storing a number of different cryptocurrencies, then making sure that your choice of wallet can support this is critical. Typically, when you are looking for a wallet like this, you should check user-reviews to ensure that they have a good reputation. If you are looking to store only one coin, check the coin’s website to see if there is a dedicated wallet already.
Hardware wallets generally tend to support more cryptocurrencies than other types of wallets.