So, whether you are looking to explore hot or cold wallets, or even cloud storage, here are the best crypto wallets for 2023.
Best for beginners: Coinbase Wallet Best cold crypto storage: Trezor Model T Best wallet for desktop: Exodus Wallet Best crypto wallet for bitcoin: Electrum Wallet
Whether you are a crypto novice or an experienced investor, the market for cryptocurrency wallets can be highly confusing. In this article, we will discuss the importance of securely storing your assets and analyze the best crypto wallets on the market in 2023, breaking down this complex area.
The 11 Best Cryptocurrency Wallets in 2023
Please be aware that WikiJob are not financial advisors; all information in this article is purely for educational purposes. Coinbase is widely considered the best cryptocurrency wallet for beginners. The Coinbase wallet has an easy-to-use interface and excellent customer support. The mobile app can also be accessed using a biometric log-in which, many users favor. The Coinbase wallet is non-custodial, meaning user information is secure even in the event of an attack. It is important that you draw the distinction between the Coinbase exchange and wallet, which are both leaders in the market. Both applications can be used independently. Get £5 in Bitcoin after your first trade on Coinbase. Terms Apply. After you make a crypto purchase, BTC will be added to your portfolio. Limited time offer. Offer available to new users only. Offer not available to new users who were referred to Coinbase through the Referral Program or who have previously opened an account using different contact information. Coinbase may update the conditions for eligibility at any time. The Exodus Wallet was founded in 2015. Its core aim was to simplify the process of transferring digital assets. This effortless experience and dynamic user interface make it a firm favourite of those new to cryptocurrency. However, experienced traders are often deterred by Exodus being a closed source. This appears to go against the transparent ethos of cryptocurrency and raises some questions surrounding security. Exodus is the best cryptocurrency wallet for those who prefer to use desktop, but they do also offer mobile versions for increased flexibility. Exodus is also compatible with the Trezor One and Trezor Model T hardware wallets.
Electrum is one of the market’s most established bitcoin wallets. Founded in 2011, Electrum has never deviated from its speciality and is one of the few remaining wallets that only deals with bitcoin. Electrum is widely considered one of the most reliable crypto wallets on the market. First, its servers are decentralized, so your wallet will never suffer downtime. Second, Electrum uses a lightweight client, which only downloads part of the blockchain. Therefore, users will experience much faster transactions. It is the ideal option for those who regularly send and receive bitcoin payments.
Mycelium has been around since 2008, making it one of the best-known and most respected crypto wallets around. Mycelium is an entirely open sourse app. So, anyone can access the original code to help assess any security flaws. Hence, Mycelium is considered one of the safest crypto wallets. Although the user interface is relatively easy to use, Mycelium is best for those who are a little more experienced when it comes to handling cryptocurrency. Customer support is email only, there is no desktop functionality and the app documentation is slightly lacking compared to some competitors.
The Ledger Nano S is the best entry-level cold storage crypto wallet. Its modest price attracts those looking to switch to offline storage but don’t want to break the bank. This inconspicuous device looks identical to a USB. The Nano S is a sleek black design with a silver casing and can fit easily in your hand or pocket. Ledger is one of the biggest names in hardware wallets because it offers the most robust security features. Ledger exceeds all industry-set standards and uses tamper-resistant chips to secure your private keys.
The Ledger Nano X is a great option for those looking to level up from the Nano S. It includes all of the security features mentioned above in the Nano S, but in a more sophisticated version. The battery is more powerful and the screen is much more user-friendly. Additionally, the Nano X supports over 5,000 coins, substantially more than the earlier model. The Ledger app is extremely user-friendly, allowing users to buy, sell and stake cryptocurrency.
The Trezor T was released in 2014 and is one of the most premium cryptocurrency wallets on the market. The device is slightly larger than the Ledger models mentioned earlier, making it much easier to use. The Trezor T uses a 24-word security phrase as part of its safety features. Users should be aware that losing the physical wallet and this recovery code means your assets would be completely unrecoverable. The Trezor T is the company’s most exclusive offering. If you like the look of the Trezor T but would prefer to start with a more basic model, consider the Trezor One.
MetaMask was founded in 2016, and now has over 30 million users. Its accounts are extremely straightforward to set up. Registration can be completed in a few minutes and requires no personally identifiable data. It is one of the most widely used Ethereum wallets, with its open-source code building trust with its customer base. However, MetaMask is best suited to those with experience for two reasons: The first is that the customer support is limited, which can cause significant issues for those new to cryptocurrency. The second is that the app does not support bitcoin, which is the cryptocurrency most beginners choose.
ZenGo was founded in 2018 and is the first keyless wallet on the market. Instead, it uses a unique three-factor authorization method (including face recognition) to keep your assets safe. It even provides an in-app test, proving to users that a photograph cannot be used to hack into their account. ZenGo supports multiple cryptocurrencies including bitcoin, Ethereum and Dogecoin. Users can trade whilst in the app, as well as store their crypto. Interestingly, ZenGo also allows users to earn interest on their coins by loaning them out.
Trust Wallet was created in 2017 by a team of anonymous software developers. The aim was to make cryptocurrency accessible to all, hence its simple UI and app-only experience. After one year of operation, the company was purchased by Binance and now serves over 10 million users monthly. It is simple to set up an account. However, Trust Wallet is only available on mobile or some newer Mac desktops, which may deter some users.
Coinomi is one of the oldest and best crypto wallets on the market and is generally considered a very secure option. With the exception of one security issue in 2019, its systems are held in very high regard amongst the cryptocurrency community. This non-custodial wallet is supported on both desktop and mobile and has a dynamic, user-friendly interface. The wallet is free, and it is completely free to receive coins. When sending cryptocurrency, users are required to pay a network fee, which is standard practice.
As with regular cash, it isn’t strictly necessary to own a wallet to spend your money, but it certainly makes things easier. However, unlike a traditional wallet, a crypto wallet doesn’t hold your assets. Instead, it contains the passkeys and access codes for your accounts. Most cryptocurrency wallets are apps which run off your computer or mobile. However, physical cryptocurrency wallets can be purchased for those who prefer something tangible.
How Does a Cryptocurrency Wallet Work?
As mentioned, a crypto wallet doesn’t actually store your currency. Instead, it holds your public and private key information, allowing you to carry out all crypto transactions. A public key works similarly to a bank account number. It can be shared with third parties without compromising the security of your portfolio. Conversely, you should always keep your private key secret, as this provides direct access to the cryptocurrency. Cryptocurrency itself is stored in a blockchain, which forms the basis of all decentralized cryptocurrencies.
Why You Need a Cryptocurrency Wallet
When you purchase cryptocurrency, your assets are held on the exchange or brokerage. Generally, this is a very safe way to store your crypto. In fact, almost all large cryptocurrency exchange websites hold most of their customer’s assets in cold wallets, minimizing risk. So, technically, your assets are being held in a crypto wallet. But a custodial wallet rather than a personal one. Having your own personal, non-custodial wallet is the most secure way to store your cryptocurrency.
Best Online Crypto Wallet – Hot Vs Cold Storage for Cryptocurrency
We’ve covered what a crypto wallet is and why you need one. Next, it is vital to discuss the different styles of wallets. Cryptocurrency wallets can broadly be divided into two categories: hot and cold. The main difference is whether it is connected to the internet. Hot wallets tend to be used by those with small amounts of cryptocurrency who are making regular transactions. Cold storage is best for those with large portfolios looking to hold onto their crypto for long periods. The most experienced investors will have a range of crypto wallets for their various assets.
Hot Storage for Crypto
Hot crypto wallets are those that are connected to the internet. Examples of hot wallets include:
Mobile wallets Desktop wallets
Crypto wallets connected to the internet are much quicker and easier to use, hence why they are so popular with beginner investors. However, by their very nature, they are vulnerable to attack. So, if you opt for a hot wallet for your crypto storage, be sure to investigate the security of the particular platform. Increased encryption may come at a slightly higher price point but can be critical to protecting your portfolio.
Cold Storage for Crypto
On the other hand, cold wallets are entirely offline. Examples of cold wallets include:
Hardware wallets Paper wallets
Cold crypto wallets are much less convenient than hot wallets, but are undeniably more secure. The threat from malicious online attacks is removed, providing the perfect solution for those holding large quantities of cryptocurrency. However, there are other concerns with cold crypto storage. For example, the hardware or paper wallet could simply be lost or destroyed. Should this happen, you would lose the entirety of your portfolio. It is also worth mentioning that cold storage is considerably more expensive than hot crypto storage.
What Is Cloud Storage for Cryptocurrency?
Decentralized cloud storage is now providing a disruption to the traditional cryptocurrency wallet offerings. Your encrypted data is stored across multiple locations, run by specialized cloud providers. This provides an extra level of security, appealing specifically to slightly more risk-averse investors. By using a non-custodial wallet, you take full responsibility for handling your keys, but it is undoubtedly more secure than holding your cryptocurrency in the exchange. For those with security concerns, opt for a wallet that offers two or three-factor authorization. For an extra level of protection, choose a cold wallet option. Most wallets will charge a network fee, which is actually a payment to the miners rather than the wallet. The network fee will depend on the type of crypto you are exchanging. Additionally, if you choose an all-in-one wallet that offers an exchange, a service fee may be involved for buying or selling crypto. This fee is generally between 0.5% – 1.5%. Cryptocurrency wallets are not a scam. They are an extra level of security which protects your assets from hackers. Those with very small portfolios may choose to hold their crypto on the exchange, but this is not advisable. However, you should be mindful when choosing the best crypto wallet, as many fraudulent applications exist. One excellent option is the Coinbase Wallet, which regularly ranks as the best wallet for beginners. Exodus is another great option; offering only bitcoin services has allowed them to earn the title of industry experts. ZenGo is another user-friendly option, removing the need for authentication keys. With more investors moving into the crypto market, the need for secure wallets will continue to grow. It is clear that our wallets will become more than just a storage facility, with their capabilities rapidly evolving each year. Cloud storage currently attracts the most attention, with heavy investment demanding thought from those with substantial assets. However, the need for physical, cold storage will undoubtedly remain in place for the foreseeable future. Please remember that, like many other investments, cryptocurrency is risky. The market can be hugely volatile, fluctuating in response to global economic and political events. Therefore, you may wish to speak with a financial advisor before investing in a specific cryptocurrency. WikiJob does not provide tax, investment or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.
