En route to invest in cryptocurrency, the most nerve-racking decision is to select a wallet. Finding the best one has never been easy, with the wide availability of different types of crypto wallets. Before sneaking into the top 5 options, let us understand what a crypto wallet is.
What Is A Crypto Wallet?
The way you use regular wallets to fold your money and put the physical money in, the crypto wallet is the same but for digital currency.
It is a software program that lets you secure your private keys (the proof that you are the legal owner of the coin), send and receive crypto, and keep the transaction history.
The most crucial aspect of the crypto wallet is the private keys – that’s where new users trouble the most. Other keys driven from the private keys are public that serve as the wallet address and connect with the server.
Different Types of Crypto Wallets
Crypto wallets fall in the following category based on security levels and ensuring the private keys’ safety.
- Paper wallet: Founded in 2011 and remains in use till 2016. As the name suggests, paper wallets offer printed private keys and the wallet address on paper.
- Software wallet: Hard drive software that runs on your computer with 100% security of wallet address and private keys. You can also download the wallet on your computer.
- Hardware wallet: Hardware wallets are similar to USB drives. This type stores the private keys in the physical device. The device is locked with a security pin- ensuring no one gets access to your private keys.
- Mobile wallet: Mobile wallet is also known as a light wallet. Having this wallet, you can store your keys on your mobile phone and carry them wherever you want.
- Desktop wallet: In this type, first, you have to download the blockchain. The wallet is accessible on laptops and desktops.
- Online wallet: Online wallet is best for those stepping into crypto exchange for the first time. The wallet locates on the centralized exchange platform, keeping your private keys and wallet address safe from third parties.
Top 5 Crypto Wallets
Proceeding with the list of different types of crypto wallets, here are the top 5 options.
- Coinbase
With an overall less complicated fee structure and user-friendly interface, Coinbase is the best option for beginners. For experienced crypto traders, Coinbase Pro is ideal. The wallet is compatible with major banks, supports more than 500 crypto assets, and stores NFTs as well.
Pros
- User-friendly welcoming interface
- More than 500 digital assets
- High liquidity
Cons
- High inactivity fee on Coinbase Pro
- Mycelium
Mycelium wallet is a step forward from the other different types of crypto wallets. The utmost feature is the watch-only mode. The wallet is compatible with 20+ cryptocurrencies.
Mycelium type is a mobile wallet with both iOS and Android compatibility. The advanced transaction history shows in-depth details.
With several pin protections, your private keys are safe. About transaction fees, the wallet offers a custom fee structure.
Pros
- Advanced transaction history
- In-depth available educational material
- Several pin protections
- Offline transactions
Cons
- Confusing for beginners
- Ledger Nano X
In the list of best hardware wallets, Ledger Nano X secures the topmost position. The out-ranking feature of the wallet is cold storage. At the time of writing this guide, the wallet cost $119.
About connectivity, the wallet features Bluetooth wireless connectivity with the app. For security protection, Ledger Nano X has a high-end specialized security chip.
Pros
- Bluetooth connectivity
- Specialized chip for security protection
- 8 hours of battery life
- Supports different digital assets
Cons
- No touchscreen
- Electrum – Software Wallet
Electrum is considered one of the oldest crypto wallets. Electrum holds around 10% of the overall Bitcoin transactions. In case you forget the private key, you can restore it from the seed-phrase stage as the wallet features end-to-end data encryption.
Electrum is also compatible with hardware wallets. The wallet is free to download but applies a small fee on transactions.
- Trezor Model T – Hardware Wallet
Trezor Model T is a lightweight hardware wallet. For private key protection, the wallet offers a 12-24 words long seed code. Trezor Model T features almost all cryptocurrencies. To not leave the private keys on the internet, you can store them in cold storage. The cherry on the top about Trezor is the color touchscreen.
Pros
- Multisignature support
- Touchscreen
- Lightweight
- Easy setup
Cons
- Too small screen size
Final Verdict
The concept of crypto trading without having a wallet is impossible. Grab the best wallet among the different types of crypto wallets today to secure your private keys from third-party sources.
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