What is a crypto wallet?
Crypto wallets work by using private and public keys to manage and secure digital assets. The public key is like an address used to receive cryptocurrency, similar to an account number, and can be shared with others. The private key is a secret code that grants access to the funds in the wallet, allowing the owner to sign and authorise transactions. It should never be shared, as losing control of the private key means losing access to the funds.
Wallets serve various purposes, such as:
– Storage: Securely holding cryptocurrency.
– Sending: Transferring funds to another wallet address.
– Receiving: Accepting cryptocurrency from others.
These functions allow users to engage with blockchain networks, where all transactions are recorded and secured cryptographically.
Types of Crypto Wallets
hot wallets
(ONLINE & SOFTWARE)
Hot wallets are connected to the internet, making them convenient for quick access and transactions.
They come in three main forms:
– Mobile Wallets: Apps installed on smartphones, allowing users to manage crypto on the go. Examples include Phantom and MetaMask.
– Desktop Wallets: Software installed on a computer, offering a balance of security and convenience for regular use. Examples include Exodus and Electrum.
– Web Wallets: Accessible through a browser without any installation. They’re highly convenient but more vulnerable to hacking. Examples include exchanges like Binance or Coinbase.
COLD WALLETS
(OFFLINE & HARDWARE)
Cold wallets are offline, making them much more secure against online threats.
They include:
– Hardware Wallets: Physical devices like USB drives (e.g., Ledger) that store private keys offline. These are considered very secure, ideal for long-term storage of large amounts. Other examples of Hardware Wallets are list below.
– Paper Wallets: A printed piece of paper containing your private and public keys. While highly secure from online threats, they’re vulnerable to physical damage or loss.
Wallet features: what to look for?
SECURITY FEATURES
e.g. two-factor authentication, encryption
ease of use
e.g. user-friendly interface
supported coins & tokens
compatibility with platforms
e.g. Android, iOS, etc
BACKUP & RECOVERY OPTIONS
Top 5 Recommended
Cold Wallets
LEDGER
Known for its robust security features and wide range of supported cryptocurrencies, Ledger wallets are trusted by many users for secure storage.
TANGEM
This wallet offers a unique card format and features NFC technology, making it very portable and easy to use for everyday transactions while maintaining high security.
ELLIPAL
With its air-gapped design, Ellipal is completely isolated from the internet, providing excellent security against online threats while also featuring a user-friendly interface.
SAFEPAL
This wallet combines security and convenience, offering mobile app integration, a built-in camera for QR code scanning, and support for a wide variety of cryptocurrencies.
ONEKEY
OneKey emphasises user experience with a simple interface and supports multiple currencies, making it accessible for both beginners and experienced users while ensuring strong security features.
