Satoshi Nakomoto invented Bitcoin, the very first decentralized blockchain-base cryptocurrency, in order to disconnect the financial world from a central authority and allow people to have control over their finances like never before. But being a digital currency, Bitcoin and other cryptocurrencies do not have physical notes or coins to represent them. To store cryptocurrencies, you need a secure and trustworthy digital wallet. Generally, there are two general types of wallets where crypto investors can store their bitcoins, and other cryptocurrencies, safely: cold wallets and hot wallets.
Hot wallets are called hot due to the fact that they are directly connected to the Internet. While they are usually free and easy to obtain, they are also easier to hack into. Some popular hot wallets include Coinbase and Kraken.
Another kind of hot wallet is a desktop wallet that is installed on a PC and can be used when connected to the Internet. Users have full control of their private keys and can encrypt their wallets to prevent hacking attempts. The downside to desktop wallets is if the PC gets destroyed or stolen, the wallet and cryptos disappear with it.
Cold wallets are paper wallets and hardware wallets. Paper wallets involve the print and storing of bitcoins offline, like regular currency. The difference is that with BTC, it’s the information that is stored in the wallets that gets printed, not the actual key.
The second type of cold wallet is the hardware wallet. It’s a physical offline device that’s pretty much like a glorified USB that can be plugged into a computer and used to make transactions. There are three main brands of hardware wallets: Trezor, Ledger Nano, and KeepKey.
What are some of the top wallets for crypto storage?
By far one of the most popular and easy-to-use wallets for cryptocurrency investors. It allows its clients to buy, sell, and store various cryptocurrencies. Users can connect their bank account directly to Coinbase and transfer funds in and out of their wallet.
Coinbase acts as both a digital exchange and wallet, which means it’s great for new users. It offers a clean, modern interface and is backed by a number of investors and reputable exchanges. It’s a secure and easy way to store cryptos, but it does have high transactional fees in comparison to some of its peers.
Trezor is a cold wallet, a hardware wallet, to be more specific. It offers high security and practically eliminates the opportunity of your cryptocurrencies getting stolen. Users receive a small device that they can plug Trezor directly into their PC or smartphone. The device has a small screen that helps manage security. Currently, Trezor supports offer 1000 digital currencies.
The problem with Trezor is that it’s not free and requires a complex initial setup. Models cost between $55-$500, but the cheapest version has limited features.
Ledger offers two hardware wallets to their clients: The Ledger Nano X and Ledger Nano S. It is an extremely secure offline storage for cryptocurrencies that comes with a physical component that closely resembles a USB flash drive. It connects directly to a PC and allows you to comfortably access your digital holdings. Ledger supports over 1200 cryptocurrencies as well as coin staking, which offers users rewards based on their balance.
Ledger allows you to check your online balance as well as send and receive currencies. Ledger Nano S, which is the simple version of the wallet, costs $59, while the Bluetooth-enabled Ledger Nano X costs $119. The only downside of Ledger is the fact that it does not have an incorporated exchange to trade cryptocurrencies.
SoFi is actually a financial company that offers banking services like investing, lending, etc. SoFi allows users to buy, sell and hold cryptocurrencies Sofi is very easy to get started with as it has a low $1 minimum fee to open an account and transparent fees when you open an account.
SoFi also has an incorporated exchange for trading cryptocurrencies. The downside of SoFi is that it supports a limited number of cryptocurrencies which may not work for more seasoned crypto investors.
Being the very first cryptocurrency to be released in the world, Bitcoin is the most trusted and the most popular cryptocurrency in the world. Bitcoin wallet was created for users a seamless and comfortable user experience.
It is the safest wallet specifically for Bitcoin users and offers full control over your funds. It can be accessed from anywhere and is extremely is to use.
How should I choose a crypto wallet?
When selecting a wallet to store cryptocurrencies, every investor should primarily consider their needs and goals, as well as how comfortable they are with using technology. Advanced users are much more likely to lean towards hardware wallets since they offer the best security. If you’re holding a large number of cryptocurrencies, a hardware wallet will definitely work better. Think of it the same as holding a large amount of gold or USD – you will choose a secure vault for your gold and a trustworthy Swiss bank for your USD, right?
Beginners, however, should start with simple online wallets such as Coinbase or SoFi, as an online wallet is much easier to set up and has low transaction fees. However, whatever you choose for your holdings, make sure the option you choose offers high security.