A breakdown of the best crypto wallets
The digital wallet is a central component of the cryptocurrency ecosystem. Essentially, the “wallet” is a record-keeping folder containing both your public and private keys used to conduct transactions with blockchain technology. Most digital wallets will interact with different cryptocurrencies, too, so you don’t have to possess a different wallet for each kind of cryptocurrency you’re either mining or trading one day to the next.
If you have a lot of funds invested, consider a hardware-based crypto wallet an emergency backup. This is usually a physical device, like a jump drive, with the keys stored on it in an environment that never touches the internet.
Trezor is one such device that plugs directly into your computer. This crypto wallet works with multiple exchanges and a variety of currencies. It features a password manager, 2FA, and other security measures.
Additionally, the Trezor wallet has protocols and processes in place for forgotten passwords and even missing or stolen devices. These are not meant to be taken lightly, and aren’t going to be straightforward processes — for security reasons, but also to weed out the impatient as well.
The Ledger Nano is a solid and straightforward option, currently a bit cheaper than other hardware wallets. Like the Trezor and others, a big security feature is the small screen on the device. Even if hackers found their way into the bitcoin wallet, they would not get access to your private key without having access to the fob itself.
Ledger Nano supports a variety of coins and exchanges, and like the name suggests, it’s small and compact. Its sturdy metal outer shell makes it a bit more durable than some of the competition.
Or, Go Old School… Real Old School
More secure than that is good old-fashioned pencil and paper. This kind of wallet won’t be applicable for traditional buying and saving. You’ll need a digital wallet for that. But for large enough accounts, it’s worth considering. Transferring funds from your digital key to the one you’ve written out by hand is untraceable and quite unhackable — just don’t lose that piece of paper.
But what about the digital options on the market today? Here’s a breakdown of the most popular, and where their strengths and weaknesses lie.
Blockchain is the underlying tech behind all cryptocurrency exchanges, and they offer a free online wallet. Though there is no exchange or market via the blockchain wallet, this is both a positive and a negative. On the one hand, other wallets connected to popular exchanges and marketplaces are prime targets for hackers and other thieves.
The downside is, because it’s not on an exchange, there’s an additional step necessary to buy and sell currencies. Hardly ideal for a first timer, but perhaps the best one out there for someone a little more tech savvy.
Coinbase is maybe the most popular crypto wallet and exchange. It only takes a few clicks to connect a domestic bank account, from which you can easily transfer real-world dollars into digital currency. Spend them however you like, if it’s trading between Bitcoin, Litecoin, Etherum, and other popular digital currencies. Transfers are also allowed between popular cryptos. Additional coins are being added to the Coinbase at regular intervals.
Because it’s popular, Coinbase is a prime target for hackers. However, they take the security of the site and their user accounts very seriously. Protections experience regular updates, and that benefits users across their experience and interface interactions.
Electrum is best considered a software wallet exclusive for desktop use. Your keys are stored digitally, but not on the cloud. While a computer connected to the internet would be more at risk than one that is not, the sensitive information not being stored on a server somewhere limits its accessibility to a security exploit.
A downside is, because these are private keys locally encrypted, significant data loss on that specific PC’s drive could mean losing access to your wallet, your currency, and all its equity.
A boost to Electrum’s security is their seed based wallet recover system. It’s a random phrase of words the system uses to generate private keys. This makes it a lot less likely to be locked out of your account.
Similar to Electrum is Exodus, which has a lot of the same benefits with some additional bells and whistles aesthetically, plus higher marks for intuitive design and ease of use. It’s a downloadable wallet application, so you will need another program for interacting with exchanges and completing sales and trades.
Exodus has the same major drawback as Electrum, too, in that you better not lose or break the computer you’re using it on.
This one is strictly for mobile users, having wallets available for iOS and Android. It’s a little more complicated than the others, and has no desktop or web portal form of access. Ideal users would have some experience with exchanges and wallets already, but perhaps do not have a personal computer to base operations out of. A big selling point is the high level of security and Mycelium’s commitment to anonymity.
Robinhood began (still its primary use, in fact) as a free stock market platform, offering free trades and stock tickers, but it has slowly adapted itself toward digital currency exchanges. Like Coinbase, Robinhood is both a digital wallet and an exchange, and like Mycelium, it’s a mobile-first platform. There are Robinhood features through a web portal, usually after they’ve been rolled out on mobile.
Robinhood is completely free. They do not take commissions on buying or selling Bitcoin, same as buying and selling stocks through their platform.
It’s about as secure as Coinbase, and about as popular, so it will be targeted for attacks in the future.
Why not mine, though?
In addition to looking at fancy digital wallets for your future coin trades, consider the benefits of crypto mining. It requires a bit of a hardware investment and a pretty large energy bill, but that’s where Compute North comes in. We’re a colocation operation in multiple states with a professional technical staff and the energy equation solved. We can have your mining rig installed and running quickly, so you can start mining safely and smartly today. Contact Compute North to learn more!