Crypto Wallets: Where’s the Best Place to Store Crypto?

Let’s explore crypto wallets, the essential tool for storing and using Bitcoin, Ethereum, and other crypto. We’ll examine the types of wallets, their pros and cons, and learn how to choose a reliable one. It is a crucial read for beginner crypto investors.

There’s a golden rule in the crypto world: “Not your keys, not your coins.” It means you can only be truly confident about your assets when they’re in your wallet. But what kind of wallet do you need? Is there a difference between them? Or can you choose one you like best, just as in the real world? Let’s break it down.

What Do You Need to Know About Crypto Wallets?

First, make sure to make the right choice when selecting a wallet. It’s just an interface for your asset storage, not a physical safe with money. Your crypto isn’t actually in the wallet — it’s on the blockchain. A crypto wallet is a tool through which we access our assets.

Imagine you have a universal bank card that you can use at any ATM without restrictions. In the crypto world, a seed phrase plays this role. It’s a set of words you receive when creating a wallet. Please keep it safe, as it’s the key to your assets. We wrote about the seed phrase and its irreplaceable role in crypto in this article.

It’s important to understand that the seed phrase is universal. If you decide to switch wallets, enter this phrase into the new one, and you’ll have access to the same account. It’s as if you could use the same bank card at different banks.

Thus, a crypto wallet is not where your coins are stored, but rather a tool for managing them. You can change wallets, but your assets will always remain on the blockchain. So, when choosing a wallet, focus on ease of use, security, and functionality rather than worrying about “losing” your coins when switching wallets.

In the crypto world, there are two main types of wallets: hot and cold. Let’s explore how they differ and who they’re best suited for.

Hot Wallets: Always Connected

Hot wallets are like the everyday wallets that you carry with you. They’re installed as apps on your smartphone or computer or browser extensions. The main feature is that they’re always connected to the internet.

Pros:

• Quick access to coins.
• Convenient for frequent transactions.
• Usually free.

Cons:

• Higher risk of hacking compared to cold wallets.
• If your device gets infected with a virus, your funds could be at risk.

Usage example: Imagine you want to buy coffee with Bitcoin. A hot wallet would let you do this in seconds, right from your phone.

Cold Wallets: Your Crypto Safe

Cold wallets are often called hardware wallets because they’re physical devices, similar to USB drives. They’re specifically designed to store your crypto offline.

Pros:

• High level of security.
• Protection from online threats.
• Ideal for storing large amounts.

Cons:

• Less convenient for frequent transactions.
• Cost money (usually $50 to $200).

Usage example: If you’ve bought $10,000 worth of Bitcoin and plan to hold it for several years, a cold wallet is an excellent choice.

How to Choose?

The choice between a hot and cold wallet depends on your goals:

1. For active traders: A hot wallet will be more convenient. You’ll be able to react quickly to market changes.
2. For long-term investors: A cold wallet will provide peace of mind, as you’ll be confident your assets are secure.
3. For beginner investors: Start with a hot wallet with a small amount. When you’re more comfortable and have accumulated a significant sum, consider a cold wallet.

Remember: many experienced crypto enthusiasts use both types: hot for daily spending and small amounts, and cold for main savings.

The main rule is that regardless of the wallet type, always store your seed phrase in a secure place. It’s your key to recovering access to your funds, even if you lose your device.

Types of Hot Wallets

Hot wallets come in three main varieties: mobile (for phones), desktop (for computers), and browser extensions. Mobile and browser wallets are the most popular, so let’s focus on these.

It’s important to understand that you can simultaneously use the same wallet on different devices. Thanks to the seed phrase, this is possible. The wallet exists on the blockchain, and the apps are just ways to access it.

How to Choose a Mobile Wallet?

Many mobile wallets are on the market, and the choice might seem challenging. Here are a few popular options:

Trust Wallet:

• Easy to use, fairly convenient interface.
• Good choice for beginner investors.
• Owned by Binance exchange.

MetaMask:

• Popular among experienced DeFi users.
• Has extensive customization options.
• Intuitive and quite easy to use.

Rainbow Wallet:

• Pleasant, beautiful, and intuitive interface.
• Advanced functionality for working with DeFi.
• Suitable for those who value aesthetics and convenience.

SafePal:

• Offers both software and hardware wallets.
• Good for advanced users.

For beginners, we recommend starting with MetaMask or Trust Wallet. They are the most popular wallets, as they have an intuitive interface and provide all the necessary functions to start working with crypto.

Choosing a Browser Wallet

Browser wallets are installed as extensions and are convenient for computer use. The most popular ones are:

MetaMask:

• Provides extensive customization options.
• The most popular is one of the first browser wallets.

Rabby Wallet:

• Automatically finds all your tokens across all networks and calculates the total balance.
• Recently on the market, but has very powerful functionality.
• User-friendly interface with many features.

Rainbow Wallet and Trust Wallet:

• Also available as browser extensions.
• Good if you’re already using their mobile versions.

Remember, choosing a wallet is a personal decision. Feel free to experiment and try different options until you find the one that best suits your needs.

Choosing a Cold Wallet

Cold (hardware) wallets are indispensable for the maximum security of crypto assets. Let’s examine two leading brands in the market: Ledger and SafePal.

Ledger is the world’s most popular hardware wallet.

• Basic version: It costs about $90, looks like a flash drive with a small screen, and requires a computer connection to sign transactions.
• Advanced versions: add Bluetooth, a separate app, and a touchscreen; allow using the wallet as a standalone device.

SafePal offers impressive functionality at a lower cost.

The basic version costs $50 and has the following features:

• Looks like a small smartphone.
• Doesn’t require connection to a computer.
• Works with the SafePal mobile app.
• Signs transactions by scanning a QR code.
• The manufacturer offers improved versions larger battery capacity, physical buttons, and Bluetooth.

The manufacturer sells additional accessories in addition to wallets: wallet cases and Cypher, a special steel device for secure storage of the seed phrase.

Banana Capital’s Choice

For hot wallets, we recommend considering MetaMask and Rabby Wallet.

Both have powerful functionality, are popular, and are user-friendly.

For cold wallets, look at the basic version of SafePal — it doesn’t require connection to other devices, is often sold at discounts, and covers almost all user needs.

Choose Your Crypto Wallet and Remember About Security

In the end, the choice between a hot and cold wallet depends on your goals:

If you must react quickly and frequently to market changes — a hot wallet like MetaMask will suit you.

If you plan to invest long-term and manage a large sum of money, we recommend a cold wallet like SafePal.

If you’re starting to interact with crypto, set up a hot wallet with a small amount and then move to a cold one if it makes sense.

Remember the main rule when buying a hardware wallet: purchase the device only from the manufacturer’s official website. Avoid resellers, marketplaces, and even offers from friends. It’s better to overpay for delivery directly from the manufacturer than to risk the security of your crypto assets.

Ultimately, choosing a cold wallet is a personal decision that depends on your needs, budget, and preferences. Regardless of which device you choose, the main thing is to follow security measures and keep your seed phrase in a safe place.

The next article will examine the most popular crypto wallet, MetaMask. Follow us on social media to stay updated!