A cryptocurrency wallet is an app, device, medium, or program where you can store your crypto. Imagine how your wallet helps you organize and keep track of your cash—it’s about the same principle here! On purchasing your cryptocurrency, you can keep them in a cryptocurrency wallet and spend them from there as you please.
There are many types of crypto wallets designed in different forms. But your choice of a crypto wallet should depend on the level of security you desire and what you intend to do with your crypto assets. The next big question is; what are the uses of crypto wallets?
Uses of Cryptocurrency Wallets
Below are some of the basic uses of crypto wallets;
Store Your Crypto
Let’s say you want to buy some crypto coins or tokens, e.g.,., Bitcoin, Ethereum, Shiba, or ADA. Or a friend wants to send you some crypto. Your bank account doesn’t sound like the right place to send them. So, that’s where a cryptocurrency wallet comes in to receive and store your crypto assets.
Manage Your Cryptocurrency Balance Anytime
A cryptocurrency wallet can help you view and manage your crypto balance. It gives you an overview of what you have left and helps you keep track of your usage and transactions.
Encrypting and Signing Information
Crypto is all about encryption or hiding sensitive information. That’s why you can perform crypto transactions with no third parties and minimal fear of fraud. Because the information that authorizes those transactions is validated using complex mathematics and logic.
Most cryptocurrency wallets have built-in features that encrypt and sign information. As such, they help to facilitate trustless cryptocurrency transactions, smart contracts, identification, and legal processing of documents.
Types of Crypto Wallets
There are diverse kinds of crypto wallets, but these wallets can be classified into two major groups: Cold wallets and Hot wallets. Funny enough, they have nothing to do with temperature, as you’re going to find out;
Cold wallets are also known as hardware wallets or cold storage. Their most significant feature is that they work offline on hardware like USBs, smartphones, desktops, etc. Examples of cold storage wallets are hardware with built-in management software, as seen in Trezor and Ledger. Cold storage hardware is built to interface with the blockchain through the codes on them.
Hot crypto wallets or hot storage are online cryptocurrency wallets. You can access them through cryptocurrency exchanges like Binance, Coinbase, etc. They aren’t just limited to exchanges. Hot storage also comprises paper wallet generators such as walletgenerator.net and papaer.dash.org.
Top 5 Crypto Wallets and their Features
#1. Ledger Nano X
The Ledger Nano has hardware that supports all cryptocurrencies. Interestingly, this hardware, like modems, uses LED displays—but in this case, to validate payments. They also have PINs that ensure their security.
Features of the Ledger Nano X
- Provides security and control for all your crypto assets.
- Easy to access using a USB-compatible device.
- It supports Windows, Mac, and Linux.
- 2-factor authentication available.
- You can install up to 100 applications on your ledger.
#2. Coinbase Wallet
Aside from all its other utilities, Coinbase is a cryptocurrency wallet used to store crypto and buy, sell, and send crypto to peers. Its offline storage is known to be highly secure and supports a wide selection of digital assets.
Features of Coinbase Wallet
- Android and iOS apps.
- Buy, sell, and manage your crypto in the same place.
- Earn $5 worth of Bitcoin on signing up.
- Top-level security through vault storage of digital currency.
- Flexible currency trading schedule.
Trezor is a hardware wallet with which you can store bitcoin. It communicates with your computer via the USB port to generate random pins, making it difficult to compromise the device.
Features of the Trezor Wallet
- Maximum offline security of private keys and assets.
- Simple and intuitive touchscreen.
- Compatible with Windows (10 or higher), Mac (10.11 or higher), and Linux.
- Supports Android.
- Supports 1200+ coins.
- Backup your entire wallet using the Shamir Backup (SLIP39).
- 5-star customer support.
Exodus Crypto Wallet is considered by many as the best crypto wallet for crypto newbies. The beautiful part is that it’s completely free, has great customer support, and has a cold storage option. Additionally, the fact that it’s non-custodial means it’s easy as pie to access your coins.
Features of Exodus Wallet
- Advanced security for your crypto assets
- Send, receive, and exchange crypto on mobile, desktop, and hardware wallets
- Secure your cryptocurrencies on Trezor hardware
- On-the-go tracking of market movements
#5. Safemoon Wallet
Features of the Safemoon Wallet
- SWAP (Send Withdrawal And Purchase) feature, meaning you don’t have to connect your wallet to Uniswap or PancakesSwap to run these transactions.
- Advanced encryption using Anonymous Key Technology.
- Two-factor authentication
- Built-in calculator
- Token charts
Here are helpful tips on how to secure your crypto wallets from scammers;
- Consider using cold storage since it’s not internet-connected, making it less liable to hacks
- Use a secure internet connection. Ditch public WiFi networks as much as possible. Also, consider using VPNs for additional security.
- Use strong passwords. A strong password is a mixture of random uppercase and lowercase letters, numbers, and symbols.
- Change your passwords regularly. This makes your password security impregnable
- Use multiple wallets at a time. It’s a precautionary measure just in case one wallet gets compromised. In essence, you won’t lose all your crypto assets since they’re distributed across several wallets.
- Enable 2FA (Two-Factor authentication) for your wallet. It gives you absolute control of your wallet so that no impostor can succeed with a transaction unless you authorize it.
There are different types, classes, and brands of crypto wallets—so many that it will take a full book to discuss them. However, this article gives you a fast overview of crypto wallets, their types, and their features. As such, you can easily choose a wallet to store your crypto assets, whether you’re a beginner or well ahead in the crypto world.