The industry of cryptocurrency is continuously growing. As of the moment, the most popular cryptocurrency is bitcoin. Yet, Ethereum is coming next. This means that such cryptocurrency has a great feature as well.
Nowadays, Ethereum has great value. If you decide to buy, hold, trade or store Ethereum, it is always essential to have secured storage or a secured wallet. That means determining the best Ethereum wallets is a great help.
But, how should you choose the right wallet for you? How does each Ethereum wallet differ from another? How about the best Ethereum wallets recommendation? Find out all the answers in this article.
About Ethereum Wallets
Generally, we have two types of Ethereum wallets. We call them cold wallets and hot wallets. We will dig into that one by one. However, before diving into their differences, let us have a deeper understanding of wallets and what they do for you.
What are Ethereum Wallets?
A wallet, or specifically an Ethereum wallet, is a place where you store your crypto. You can think of it as a traditional bank. You can also describe it as a piece of software like mobile apps or E-banking, where you store your money, do transactions, and manage your balance.
However, keep in mind that Ethereum wallets do not typically hold any value, unlike electronic banks or even physical wallets. Like bitcoin wallets, it does not carry any tangible form of money instead. Indeed, all information related to your Ethereum is still recorded in Blockchain, and your wallet is the one that accesses such information. Therefore, we can describe it as your remote controller to the Blockchain as well.
Contents of Ethereum Wallets
Ethereum wallets have public addresses, as well as private keys. Often, we can also call public addresses public keys. Without a public key or address, no one can transfer or send you any amount of Ethereum. On the other hand, private keys are the one that makes the transactions complete and successful.
There is another part of your wallet that protects you from emergencies. It is called seed phrases or simply seeds. Let us dig into them deeper.
A public key is made up of randomly generated strings. These strings consist of a combination of letters and numbers, which are also case-sensitive. We also call it your own wallet address. When someone wants to send funds to your wallet, you can freely give them to them.
If you have public keys, you also have private keys. These keys serve as your password to unlock all your Ethereum. Ethereum private keys must stay secured if you do not want your crypto to be stolen.
As much as possible, only you should have access with your private key. A third-party wallet may store it. Yet, public access should always be limited to reduce the probability of hacking.
Seeds or Seed Phrases
Aside from public and private keys, Ethereum wallets also have seed phrases. It also acts as a password but is made explicitly for recovery measures.
Ethereum Wallets Types: Cold and Hot Wallets
As mentioned, we have two types of Ethreum wallets. These are;
What makes them different from each other? Let us start with hot wallets. Hot wallets can be obtained through downloading, whether mobile or personal computers. With that, it also means that you must stay connected to the internet to make transactions.
We cannot deny the fact that hot Ether wallets are more convenient than cold wallets. However, these wallets also come with a higher risk of insecurity.
Cold wallets are the opposite of hot wallets or Ethereum web wallets. Indeed, many crypto experts advise using it for it is more secure than its counterpart. Given such a fact, cold wallets are offline storage, a more private one, where hackers will have a harder time accessing them.
More types of Ethereum Cold Wallets
While you already know about the parts of an Ethereum wallet (seeds in the crypto wallet, public and private keys) and the major types of wallets (hot and cold wallets), it is also good to know more types of Ethereum Cold Wallets. Knowing these subtypes helps you decide what best works for your situation. These are:
The paper wallet is considered the safest option in terms of cold wallets. As the name suggests, it is just a simple but complex piece of paper that you can store inside your own safe deposit box. It is complex because it contains code. The code contains all the needed information to access your crypto.
A hardware wallet means a physical portable device, like a USB hardware wallet. You can also generate keys even though you are offline.
Again, Hardware Ethereum wallets do not require you to have an internet connection. It means you are far from being a victim of cyber-attacks. In fact, some of them provide you with backup options. This eliminates the fear of losing data. Also, many provide you with security measures that you can take such as two-factor authentication and PIN passwords.
Many people describe mobile wallets as “light clients”. This type of wallet uses miners or nodes to send and receive information within the network. Yet, remember that you must have a cellular connection.
While a cellular connection is needed, it does not mean you have to connect your computer to the internet. Nevertheless, you must still be careful. Some people can hack your wallet information.
This works similar to mobile wallets, but with easier access. As the term suggests, it runs using your personal computer. Here, you have two options. It is either you download the full version of the client or just it is the light counterpart.
Choosing a Cold Wallet
The following are just some of the many cold wallets we find highly useful. Most of them support a multi-currency wallet. So, look at them, and decide which one you want to try.
Trezor (a hardware wallet)
If you have been to different cryptocurrencies for a long period, chances are you have already heard of TREZOR wallet. If you have not heard about it yet, TREZOR is one of the pioneers of hardware wallets for bitcoin.
Nowadays, it is not only used for Bitcoin currency. Instead, it is also considered one of the best Ethereum wallets and the most popular hardware wallet in the industry. It is also supporting other cryptocurrencies such as Litecoin crypto, Zcash coin, Dash coin, and many more.
Here is a little bit of a catch. For you to control your crypto with TREZOR, you must also use a web wallet. TREZOR’s recommendation is MyEtherWallet. You will also use MyEtherWallet when you want to opt-in for interacting with smart contracts. The same applies when creating and deploying it.
Although you need to use a web wallet and your TREZOR to fully function, various security features are still available. For instance, you can set up two-factor authentication using advanced cryptography. An OLED screen is also available. Use it to see and review all the necessary transaction details until you are ready to proceed.
Lastly, here is another thing to be aware of. Like what is expected from cold wallets, this is not good if you are a regular trader. Accessing your funds with TREZOR can be time-consuming.
Ledger Nano S (a hardware wallet)
Ledger Nano S is another popular Ethereum wallet that comes in the form of USB, with high-end security. Basically, you plug it into your computer, and you can access all the information you need. The good side of Ledger Nano S is its option to use two-factor authentication. Moreover, you can make your own pin code, which you can use to lock your device.
This version of Ledger Nano also provides you with a recovery sheet, which you use in recovering your account in case of emergency. Other than that, it also comes with a built-in OLED screen. You can use it in double-checking your transaction details, either before proceeding or simply for reviewing purposes only.
Ledger Nano X (a hardware wallet)
Ledger Nano X is one of the modern Ether wallets you can have. It is another best hardware wallet, which we can describe as an upgraded version of Ledger Nano S, the former and still functioning Ledger hardware wallet. It gives you the option of whether to integrate it with MyEtherwallet or not, depending on your preference. Yet, you can still use it as a stand-alone device.
Being a successor of Ledger Nano S, Ledger Nano X features almost the same. The only difference is its upgraded firmware, which means it is more compatible with more types of devices. Moreover, it comes with a battery and Bluetooth, making it handier.
OPOLO (hardware wallet)
Unlike Ledger Nano and TREZOR, OPOLO is not as popular as other cold wallets. However, it does not mean that it does not offer great features and security. Indeed, this is one of the recommended ether wallets for long-term investors and professional traders.
One of the greatest advantages of OPOLO is its user-friendliness. Plus, it is widely compatible with different types of devices such as Windows, macOS, Android, and Linux. It is also highly portable, as it is not too big and lightweight.
In the aspect of security, the OPOLO wallet got the most secure hardware chip. This secure chip is the same chip used for credit and debit cards. It already gained a CC 6+ certification. It has also been audited by the Digital Security, ATOS group of Paris, France. Afterwards, it has been given IOT Secure Label certification.
Aside from passwords which are common to many types of ether wallets, OPOLO allows you to make and use Passphrase. It is a little bit similar to a password. However, it is longer, more complex, and hard to crack.
This feature of OPOLO is more unique, as it cannot be saved on any device. That is what makes your wallet more secure from hackers. Yes, they may steal your password if they intend to use additional software with your device. But the passphrase is much harder to get, especially that there is no trace related to it being left in any device you use.
As for password security, you can make a series of letter and number combinations for as long as 120 characters. When someone attempts to guess your password, he or she will only have seven chances of guessing. Once he or she reaches the limit, that device will automatically be locked. Of course, you can restore everything with another device.
KeepKey (a hardware wallet)
Another one of the best Ethereum wallets offering high-end security and privacy is KeepKey. It is also somewhat similar to Ledger Nano S, especially in the sense that it is also made in a USB format. It also comes with security features. However, take note that it only started to emerge in 2015.
While it is true that KeepKey started to emerge only a few years ago, it does not mean that the service is automatically poor that further development can also take place in the fooccurar, given that from the past years, it already had an advanced performance from the past years.
Being a great HD wallet, you can store as many private keys as you like. You can also generate a private key whenever you need to. Like storing a private key, generating one is also unlimited.
Like what is featured in Ledger Nano, KeepKey also comes with an OLED display. Here, reviewing and approving is necessary. If you want to proceed with the transaction, you simply click the confirmation button. Also, the HD wallet allows you to set up a PIN code for recovery purposes. Alternatively, you can use a recovery sentence for additional security.
KeepKey is not hard to set up. Technically, you will need to have an internet connection first. You will use this to download the two Chrome applications necessary for the wallet to function.
The first application you need to have is the one that generates a wallet. The second is the one that will allow you to connect with KeepKey.
Other Wallets: Additional Best Ethereum Wallets
Investing Ethereum in long-term accessibility and superb security is a must! With that being said, we list down other best Ethereum Wallets you can consider when investing in Ethereum.
Atomic Wallet (a Desktop wallet and a mobile wallet)
Mist Wallet (the Official wallet)
Jaxx Liberty Wallet (a mobile wallet)
Guarda Wallet (a desktop wallet plus a mobile wallet)
MyEtherWallet (a web wallet)
Why Are Cold Wallets More Preferable Than Hot Wallets?
Earlier, you knew the difference between the two major types of Ether wallets, which we call hot and cold wallets. So, why are cold wallets more recommended than hot ones?
The primary reason is security. Inside the internet, different threats are there, ready to attack your crypto. Although companies or wallet providers also secure your data, they can still be a victim of cyber-hacking. Once their server has been hacked, customer personal data can also be stolen.
Secondly, cold wallets are safe from face-to-face stealing or physical theft. When your device is lost (your mobile or personal computer), you can still recover your wallet. Recovery is always entirely possible if you still hold your wallet E.G., you know where you stored it.
The third is portability. For most hardware wallets, you can plug them in different devices, as long as they use the same operating system (OS).
Cold Wallets vs Hot Wallets
To sum it up, here are the major differences between hot and cold wallets.
A cold wallet is where you can store your funds and other information offline. A Hot wallet, on the other hand, is where you can access your data using the internet.
Since a cold wallet is being managed without an internet connection, online hackers will have a hard time stealing your funds. A hot wallet, on the other hand, is more susceptible to hacking and phishing.
A hot wallet results in more convenience. However, you may compromise your security. On the other hand, cold wallets are not good for regular traders, but you will benefit from them if you want to hold your funds for a long period. Using a cold wallet means you take the whole responsibility two secure it from physical robbers. If you use a hot wallet, however, you allow a company or a third party to manage the data for you, and they can directly help you in recovering things that can be recovered.
The Ethereum network may be young enough compared to other cryptocurrencies. Yet, it has a great future for making a profit. Therefore, knowing about the best ethereum wallets truly helps.
In online wallets, the risk of hacking or theft is much higher. Indeed, the many times you go online, the more you become vulnerable to network attacks. So, it is always considerate to store eth offline.