Views and reviews on cryptocurrencies have dominated the public space for some time especially amongst global financial authorities, business investors, computer experts and governments. This is largely connected to the revolutionary prospects of cryptocurrencies and their underlying technologies. These technologies are set to transform operations in conventional banking, industrial and government systems while also creating investment opportunities capable of generating huge returns.
Cryptocurrency – loosely regarded as a distributed peer to peer ledger system – is a digital asset that is designed to function as a medium of exchange. It uses cryptography to secure financial transactions, control the creation of additional units and verify the transfer of assets.
Crypto wallet basically represents to cryptocurrencies what banks are to fiat currencies. A crypto wallet is an electronic platform usually in hardware, mobile, desktop and web forms used principally for the reception, storage and sending of cryptocurrencies. Cryptocurrencies are priced tokens because of their investment prospects, therefore their safe storage is usually a matter of great concern especially with the existence of hackers, scammers and other malicious agents whose common intention is to deprive of people their digital tokens.
The crypto market boasts of the existence of several crypto wallets from different vendors and with diverse features. While this is a welcome development as it underscores the importance of crypto wallets, it, however, leaves crypto investors with the task of making choices amongst the available wallets. This is especially with the reality of the existence of some wallets with less of desired features and some others for the sole purpose of duping investors.
This article presents a guide for crypto investors in their choices of wallets. It explains some of the attributes to look out for when opening a crypto wallet. In addition, it outlines the top 5 crypto wallets and also elucidates on their features. The checklist for opening a crypto wallet includes:
The safety of your crypto wallets is important; hence the need to choose a wallet with good and robust security features. This is to ensure your cryptocurrencies are protected from inadvertent actions by self or deliberate actions by a third-party that may lead to losses. Security features to look out for when opening a crypto wallet may include two-factor Authentication (2FA) requiring a username, passwords and sometimes another information privy to you. It also includes PIN codes and recovery seed. Also when using web wallets it is preferable to choose HTTPS over HTTP.
2. Operating system compatibility
Verify if your wallet supports mainstream operating systems like Windows, Linux or OSX if you intend to use a computer system or android or iOS if you will use a mobile device. This will save you from the challenges associated with device and operating system incompatibility.
3. Ease of Use
Select a crypto wallet you can easily operate in consideration to how savvy you are with information technology. A choice to a crypto wallet you can easily operate should however not entail compromise on security and other basic features.
4. Transaction Charges
Know the transaction charges of your prospective wallet and make a choice for wallets with minimal transaction fees while providing desired features and services.
5. Previous user experience
Do your own research and find out what the user experience has been on the available wallets. Read customers reviews, take note of the merits and challenges of the prospective wallets and ascertain the reputable ones and make your choice from amongst them. A variety of online forums can help you with this.
Considering these tips and more is necessary when making an informed choice when opening a crypto wallet. We will now look at five popular wallets and their features. These include:
1. Ledger Nano S
This is a hardware wallet that can store and do basic transactions of popular cryptocurrencies like Bitcoin and Ethereum and over 25 other coins. It is not a plug and play device and does not necessarily require a computer to operate, unlike other hardware wallets. However, its LCD screen and small buttons on the device can be used for a swift operation. The LCD is specifically used to crosscheck transaction details before final confirmation. Ledger Nano S is easy to use and its security architecture robust and rugged without known cases of compromise by malicious agents.
KeepKey is a hardware cryptocurrency wallet with a Hierarchical Deterministic (HD) feature, capable of generating an unlimited number of private keys. It is easy to set up and generates a recovery sentence on initialization. This sentence serves as a backup to recover your private key in the event of loss of the keepkey. However, losing both the device and the recovery sentence will make your funds inaccessible anymore. Just like most hardware wallets, keepkey is compatible with Chrome, Electrum and Mycelium. Also, keepkey has an OLED screen to cross-check transaction details before confirmation.
Exodus is a multi-currency desktop wallet notable for its user-friendly and colorful environment that is appealing to both beginners and experts. It benefits from ShapeShift integration which enables exchanges from one cryptocurrency to another. A key Exodus security feature is that user private keys are always stored on the device and never disclosed to the server. Another feature is the presence of backup seed keys necessary for wallet recovery. It can run on a mainstream operating system like Windows and Linux and can pictorially display your entire portfolio of coins using a pie chart for easy understanding and analysis.
Trezor is a portable hardware wallet which connects to your computing device via a USB. Its security features include user-password, 2-factor authentication and a screen to review your transaction before confirmation. Although its current cost of about $99 is considered high by some crypto analysts relative to other wallets, however, the robust security feature of Trezor justifies its price.
Coinomi is a mobile multi-currency wallet compatible with mobile operating systems like Android OS and iOS. It is quite popular especially because of the huge number of users of mobile devices and the convenience its mobile platform gives, as users can readily access their portfolios. It is free and easy to use and its security features impressive. It creates a new address for every transaction thereby ensuring its transactions are kept secure and private.