Secure bitcoin blockchain wallet

We live in a mobile, connected-everywhere world. Crypto wallets that support your mobile operating system are a must.

Crypto wallet apps are convenient, but a for improved security a key stored elsewhere like on paper or a USB drive may be a good solution. Some people also opt for hardware cryptocurrency wallets. 

Review the best cryptocurrency wallets now with our comprehensive guide.

Best Crypto Wallets:

What is a Crypto Wallet?

If you’re investing in cryptocurrency, you’ll need a place to store your money and a way to send or receive cryptocurrencies.

A crypto wallet is the answer. Crypto wallets come in many forms, including web wallets, mobile, desktop, paper, brain and hardware wallets. Some desktop wallets, called full nodes, hold a complete copy of the blockchain for the cryptocurrency. On local storage, this type of wallet has a long sync process when opened and creates a massive amount of stored data.

A slimmer version is a lite wallet, also called a simple payment verification (SPV) wallet, which relies on a full node hosted elsewhere to validate transactions on the blockchain. Lite wallets are faster and use less disk space on your local storage.

What are Crypto Wallet Keys?

A crypto wallet key is a long series of letters and numbers that unlock your wallet. In some cases, a passphrase, called a seed, comprised of a long list of unrelated words, is used to unlock your crypto wallet. This type of wallet is called a hierarchical deterministic wallet, or an HD wallet.

In either case, anyone who knows or can access your private key can control the currency stored in your crypto wallet — even if they don’t have access to your computer. Only the key is needed for access. Your key is also used to generate your wallet address.

With HD wallets, multiple wallet addresses can be created. The wallet address is an ID associated with your wallet that directs payments to or from your individual wallet. The key and the wallet address are linked.

The wallet address can be shared without risking the security of your wallet — at least in regard to the key. Other risks may still exist — such as any risks stemming from someone knowing that you have a crypto wallet at all, or that a particular wallet address is yours, or that a particular payment came from or went to your crypto wallet.

Types of Crypto Wallets

• Hot wallets. These types of wallets use keys that were created or are stored on a device that has access to the internet. Because the keys were created or are stored on a device that can be accessed remotely, a hot wallet is regarded as the least secure type of wallet, but is also the most popular due to its utility and convenience.

• Cold wallets. Cold wallets use keys created on a device that has never had access to the internet. Examples of cold wallets are hardware wallets, such as a portable USB drive or smart card device, paper wallets (keys only written on paper) or brain wallets, which use a seed made of a series of words or a password that you can memorize.

• Hosted wallets. These live on another server that you don’t control. Hacking can happen on any server that has network access or that can be accessed physically, but hosted wallets create a more attractive target than a computer in your home that holds your crypto wallet due to the number of wallets on the server. You can think of a hosted wallet as being similar to a bank —  a 3rd party holding your money on your behalf — but without the FDIC insurance or other consumer protections provided by banks.

• Decentralized wallets. A decentralized wallet means that only you hold the keys to your crypto wallet and you have the freedom to send or receive cryptocurrency with your wallet anywhere in the world. A decentralized wallet doesn’t guarantee complete anonymity. It simply means you don’t rely on a 3rd party to send, receive or store your cryptocurrency, removing part of the security risk associated with hosted wallets.

Hardware vs. Software Crypto Wallets

Both hardware and software wallets store the information that grants assess to your crypto assets on the blockchain: your public and private keys.

But hardware wallets are physical items. This is often a USB drive. Ledger Nano S, Trezor and KeepKey are popular names in hardware wallets.

Hardware wallets are considered the most secure by many. It could be the best choice if you invest large amounts at a time and don’t plan to trade regularly.

Software wallets are not physical items. These wallets are programs or applications you download onto your computer or mobile device. Software wallets use encryption to protect your crypto assets. Software wallets are also known as hot wallets, while hardware wallets are called cold wallets.

Online platforms are another option, which don’t need to be downloaded and can be accessed through an internet browser.

What to Look for in a Crypto Wallet

Before you make your selection, take a look at a few factors to consider when finding the right crypto wallet for you.

Backing up your keys. The key to your crypto wallet is the only way you can access your wallet and the currency held in your wallet. If you don’t have your key, you can’t access your money. There’s no support desk to call and no email recovery tool. You’re just out of luck. For this reason, you’ll want to back up your wallet key or seed immediately and keep it someplace safe.

2-factor authentication.