Which types of wallets exist, and which are better to use?

If you are going to deal with cryptocurrency, first you have to choose a wallet. A wallet is an application or a device that stores encrypted access passwords to a blockchain, where your digital assets are held. For beginners, it can be difficult to choose a cryptocurrency wallet, as today there are a lot of variants available. In this article, we will tell you where you can store cryptocurrency and show you the best cryptocurrency wallet, among which you will choose the most suitable one. 

What is a cryptocurrency wallet? 

A cryptocurrency wallet is software or a device that allows users to operate on a blockchain. Using this tool, owners of cryptocurrency can securely control their assets - buy, sell, and exchange. 

Which types of cryptocurrency wallets exist? 

Cryptocurrency wallets have a wide classification, they can be software or cloud, hardware or paper, desktop or mobile. But they are united in two main groups: 

• Cold (hardware or paper) cryptocurrency wallets function in offline mode and don't have a stable internet connection. This wallet for cryptocurrency provides users with the highest security rate for asset holding, as it has private keys that are required for asset access, are held in an isolated environment, are secured by a password or PIN code, and are inaccessible for remote hacking attacks and viruses. Most cold wallets are physical devices, for example, USB flash drives or hardware wallets with specialized security mechanisms - encryption and multifactor authentication.

We recommend using cold wallets for storing large sums of cryptocurrency or long-term investments when the security has a leading position. They need access to the Internet only in the event of a transaction. Users should make a backup of their private keys and keep them in a safe place in order to reset them in the event of a loss or theft. 

• Hot cryptocurrency wallets (software or cloud) are online wallets, so they are constantly connected to the cloud system. They are used for cryptocurrency asset management and storage in real time and provide opportunities that are unavailable in cold wallets. You can quickly change, send, or receive digital assets. Simultaneously, hot wallets are prone to cyberattacks and viruses, so it is important to follow security measures, such as two-factor authentication, and difficult passwords use. 

The best cryptocurrency wallets in 2023 

The best cryptocurrency wallets are variable, as they depend on different criteria - market needs, the appearance of new coins, and requirements for the security rate. We found the best cryptocurrency wallets today that are the most secure and convenient. 

TOP-5 cold cryptocurrency wallets

1. Ledger Nano X - is a hardware cryptocurrency wallet with the highest security rate for storage and management of different cryptocurrencies, including Bitcoin (BTC), Etherium (ETH), Ripple (XRP), Litecoin (LTC), and many others. 

Ledger Nano X has Bluetooth, a large screen, and a mobile app for Android and iOS, which makes it more convenient to use compared with the previous version, Ledger Nano S. It can be connected to a mobile device or computer through Bluetooth for making a transaction or a backup for access reset in the event of theft or loss. Ledger Nano X requires a PIN code for every transaction. Besides that, you can set up two-factor authentication for additional protection. Ledger regularly releases security updates in order to protect your wallet from new threats. 

2. Ledger Nano S Plus is a compact and reliable cryptocurrency wallet that allows you to have full control over your digital assets. 

A device allows you to store more than 5 thousand cryptocurrencies, such as Bitcoin, Ethereum, XRP and many others. Simple interface, a pretty large screen for viewing and confirming the transactions, compatibility with Windows, Mac, Linux and iOS/Android mobile apps and transaction confirmation on the display. 

3. Trezor Model T is a hardware cryptocurrency wallet, developed by Satoshi Labs.

This device offers a high security rate from online threats and viruses, supports multiple cryptocurrency and tokens, has a color touch screen, and is compatible with mobile devices through USB-C, which makes this wallet convenient for using on the go. A cryptocurrency wallet enables the creation of backups, and provides you with the opportunity to set up two-factor authentication and a PIN code for every transaction. SatoshiLabs regularly releases security updates in order to protect your wallet from new threats. 

4. SafePal S1 is a compact cryptocurrency wallet from SafePal for secure storage and management of cryptocurrencies and tokens that is convenient to carry with you and use on the go.  

SafePal S1 provides you with a high security rate, supports lots of cryptocurrencies, has a large color touch screen, the function of a backup, the mobile app SafePal for iOS and Android devices, and is integrated with several DeFi applications. 

5. CoolWallet is a product from CoolBitX.  

This hardware wallet with a slim, stylish body supports multiple cryptocurrencies and stores your cryptocurrency in an isolated physical environment that provides high security against online threats. CoolWallet has a Bluetooth module that allows connection to the mobile app on Android and iOS devices for asset management, supports the technology of multi-signature and has a backup. 

The best hot cryptocurrency wallets

Now we are moving on to the hot, or software, and browser cryptocurrency wallets that function within a browser or a device (desktop or mobile). Such wallets are at actual risk of being hacked or infected with viruses, so you should be careful while making a transaction, even if you operate with the best cryptocurrency wallet. So, among the most popular software cryptocurrency wallets are these:

1. Exodus is a desktop wallet with a convenient and understandable interface and support for several cryptocurrencies.

Here the cryptocurrency price graph and exchange are built in, also there is a reset wallet function using a seed phrase, and also there is an integration with ShapeShift for trading and storage of cryptocurrencies and ERC-20 tokens. 

2. Atomic Wallet is a multifunctional, multi-currency crypto wallet that is available for lots of operating systems, such as Windows, macOS, Linux, Android, and iOS.

Such a cryptocurrency wallet supports more than 500 different cryptocurrencies and tokens, has built-in exchange, and also allows for passive profit from staking. Atomic wallet offers a multilevel security system - two-factor authentication, multi-signing, and a seed code with 12 words for wallet access reset. 

3. Electrum is an old, proven multilingual wallet that doesn't require a lot of resources from a device and quickly synchronizes with the Bitcoin network.

Electrum supports wallet encryption and two-factor authentication, and is also compatible with other hardware wallets (including Ledger Nano S and Trezor) for additional security. A service allows the use of several addresses, has a trading function, and is integrated with utilities for monitoring the balance and transaction history. 

4. MetaMask is a browser extension that is developed to work with decentralized applications (DApps) and blockchains, including Ethereum and Ethereum Testnets (Ropsten, Rinkeby, Kovan), Binance Smart Chain (BSC) and Polygon (Matic).

This online cryptocurrency wallet is integrated with such hardware wallets as Ledger and Trezor. They are often used for taking part in ICO, DeFi projects, NFT markets and other decentralized applications. MetaMask keeps private keys and seed phrases locally on your device, which enhances the security of your wallet. 

5. Trust Wallet is a multi-cryptocurrency mobile wallet for the storage and management of digital assets on Android and iOS devices. 

A wallet is integrated with decentralized stock exchanges (PancakeSwap, Uniswap) and mobile browsers, supports staking for some cryptocurrencies, and allows for the creation of a backup. 

How can you choose the best cryptocurrency wallet? 

The choice of a cryptocurrency wallet depends on your needs and goals for using it. For fast transactions and convenient access to various crypto assets, the most suitable ones are Atomic, and Trust Wallet, and also other multifunctional hot wallets. If you don't plan to trade and often exchange digital assets, you should choose cold wallets for cryptocurrency investment and storage, such as Ledger, CoolWallet, Trezor, etc. 

Several steps will help you to choose a wallet for cryptocurrency: 

• First, determine the purpose of its use - the long-term storage of cryptocurrency or using it for trading and other daily transactions. 

• Your geographical location also plays a role. If your region is Ukraine, you can choose almost every wallet. In Russia, some cryptocurrency services doesn`t function on their own accord, and some of them - after the imposition of sanctions.

• Security must be your priority. Be sure that the chosen wallet can provide you with tools to protect your account, such as two-factor authentication (2FA) and secure encryption methods. 

• Supported cryptocurrencies: pay attention to the availability of those coins that you plan to use. 

• Choose convenient services. It is important that your wallet is simple and intuitively understandable for you. 

• Reputation and reviews in the network help you be sure of the reliability of your cryptocurrency wallet. 

• Cost: There are free and paid wallets available for cryptocurrency users that charge fees for certain transactions.

A reliable and secure cryptocurrency wallet has a good reputation, several security levels, acceptable fees, comfortable conditions for cryptocurrency trading, and access to investment opportunities. 

How can you use cryptocurrency wallets securely

Finally, we will give you several tips for safe cryptocurrency wallet use: 

• Do not share your passwords and keys with third parties.

• Use only the  original versions of wallets, downloaded from official websites. 

• Do not provide any personal information to third parties, and do not answer messages from unknown users. 

• Check the addresses before sending them cryptocurrency. 

• Check out new scams in order to protect yourself from them. 

• Monitor your balance and actions in order to notice fraud in time. 

• Use two-factor authentication and multi-signing. 

• Regularly make backups and keep them in a safe place.

• Use a virtual private network, do not connect to the public networks.

P. S. Now you know enough to choose an online or offline cryptocurrency on your own. It is impossible to say which wallet is the best today, as each of them has certain functions that suit one cryptocurrency user but are not good enough for another. Follow the recommendations from our experts, and your transactions will always be secure. And if you want to save and multiply the cryptocurrency, use a cryptocurrency loan from Bitcapital.gold.