Best cryptocurrency wallets

Now that you know how crypto wallets work, let’s take a closer look at the five different types of wallets available, each with its own advantages and disadvantages in terms of security, ease of use, convenience and a range of other factors.

• Desktop

  • Easy to use, good level of security, plenty of choice, free to download

  • Risk of computer viruses and malware, inconvenient if you want to manage your crypto on the go

  The most common type of wallet out there, desktop wallets are downloaded and installed on your computer. Easy to set up and maintain, most are available for Windows, Linux and Mac, although some may be limited to a particular operating system. Many cryptocurrencies offer a desktop wallet specifically designed for their coin.

  Desktop wallets provide a relatively high level of security since they’re only accessible from the machine on which they’re installed. The biggest disadvantage is that they also rely on you to keep your computer secure and free of malware, so antivirus and anti-malware software, a strong firewall and a common-sense approach to security are required to keep your coins safe.

  Most desktop wallets will provide you with a long string of words upon installation. These words are known as your recovery seed or sentence and map with your private key, so it’s important to store them somewhere safe in case your computer dies or you need to format the operating system and re-install your desktop wallet.

  Popular desktop wallets: Electrum, Exodus, Copay

• Mobile

  • Very easy to use, convenient, wide range of options available, free to download

  • Losing your phone could cause problems, risk of hacking

  Mobile wallets are fairly similar to desktop wallets, with the obvious difference being that they run as an app on your smartphone. Mobile wallets feature many of the same advantages and disadvantages as desktop wallets, with your private key stored on your device.

  Smartphone wallets are often easier to use compared to their desktop counterparts and include the ability to scan other wallet addresses for faster transactions. They also make it simpler to access your coins on the go and use cryptocurrency as part of everyday life.

  You will need to be extra careful about losing your smartphone, though, because there’s a risk that anyone who has access to your device might also have access to your funds. Choosing an app that allows you to back up your wallet with a 12- or 24-word passphrase is a good idea.

  Popular mobile wallets: Jaxx, Coinomi, Edge

• Web

  • Easy to use, convenient, quick access from any computer, usually free to use

  • Security risks

  Online wallets (most often provided by exchanges but sometimes offered by third parties) are connected to the Internet and are generally the easiest to set up and use. Most only require an email address and a password to create an account, and web wallets are usually designed to provide a simple and straightforward user experience.

  The biggest advantages to online wallets are that they can’t be lost and that they’re accessible from any computer with an Internet connection.

  However, being online is unfortunately also their biggest disadvantage. Because some platforms maintain the wallets of thousands of users, they can become hot targets for hackers.

  It’s also important to check whether the wallet you choose lets you retain complete control of your private keys or whether they’re owned by the wallet provider.

  Popular web wallets: blockchain.info, MyEtherWallet, Coinbase

• Hardware

  • Generally considered to be the most secure option, offline storage, easy to set up and use

  • Most expensive option, inconvenient if you want quick access to your funds

  Hardware wallets add another layer of security by keeping your private key on a USB stick or specially designed piece of hardware. They allow the user to plug the USB stick into any computer, log in, transact and unplug – so while transactions are carried out online, your private key is stored offline and protected against the risk of hacking. As a result, hardware wallets are widely considered to offer the most secure storage option.

  The biggest disadvantage of hardware wallets is that they’ll cost you. Prices vary depending on the model you choose, but they generally cost upwards of $150. You also need to keep the device safe, but if you do lose your hardware wallet, the device itself is PIN-protected and there are usually other protective measures in place to help you recover your funds.

  Popular hardware wallets: Ledger Nano X, Ledger Nano S, TREZOR, KeepKey

• Paper

  • Secure, your wallet isn’t exposed to malware or hackers, free to set up

  • Can be damaged, lost or stolen, confusing for beginners

  Paper wallets take the concept of entirely offline keys used for hardware wallets to the next logical step: simply print out your public and private keys and use that piece of paper as your wallet.

  As secure as they are, paper wallets are also complex and quite confusing for beginners. They’re typically only used by advanced users who want a high level of security.

  To transfer money to a paper wallet, you use a software wallet (any of the above mentioned) to send money to the public key printed on the sheet of paper. Most often, this is printed as a QR code for easy scanning.

  To transfer money from the paper wallet to someone else, you would first need to transfer money to a software wallet (by manually entering the private key into the software), and then transfer money from the software wallet to the recipient as usual.

  Popular paper wallets: Bitaddress.org, WalletGenerator.net

• Research before you choose. Don’t just choose the first bitcoin wallet you come across. Thoroughly research the security features and development team behind a range of wallets before making your final decision.
• Enable 2-factor authentication. This is a simple security feature available on an increasing number of wallets. It’s simple to use and provides an extra layer of protection for your wallet.
• Pick your password carefully. Don’t be lazy when choosing a password. Make sure all usernames, PINs and passwords related to your crypto wallet are as strong as possible.
• Consider a multisignature wallet. Multisig wallets require more than one private key to authorise a transaction, which means another user or users will need to sign each transaction before it can be sent. Though this means it’ll take a little longer to send funds, you may find that the extra peace of mind is well worth the minor hassle.
• Update your antivirus protection. Make sure your PC, laptop, smartphone or tablet has the latest antivirus and anti-malware software installed. Make sure to also set up a secure firewall on your computer and that you never install software from companies you don’t trust.

• Are cryptocurrency wallets anonymous?

  Not really. While most wallets aren’t linked to your identity, cryptocurrency transactions are stored permanently on the blockchain and could potentially be traced back to you.

  If anonymity is important to you, you may want to consider transacting with a privacy-focused coin such as Monero.

• Do cryptocurrency wallets charge fees?

  Many wallets don’t charge any fees but some do, so check the fine print closely. Keep in mind that if you choose a hardware wallet, you’ll need to pay money upfront to buy it.

  You should also be aware that sending a cryptocurrency transaction from your wallet usually attracts a small network fee, which varies depending on the currency being sent. This fee is not charged or received by the wallet provider and instead applies to all transactions that take place on a coin’s network.

• Can I store all my cryptocurrencies in the same wallet?

  This depends on the cryptocurrencies you own and the wallet you choose. Some wallets only allow you to store one particular cryptocurrency, while multi-currency wallets can support any number of digital currencies.

  Check the wallet provider’s list of supported coins and tokens for more information.

• Which cryptocurrency wallet is the best?

  There’s no simple answer to this question as the right wallet for you depends on your personal needs. To help narrow down the choices, ask yourself a few key questions:

  • Which crypto(s) do I want to store?
  • Do I want a wallet I can use for everyday purchases and payments or one I can use to buy and hold crypto for the long term?
  • How do I want to access my wallet?
  • How important is wallet security and what security features do I want?

  Your answers should help you decide on the type of wallet that’s best for you.

• What is the best bitcoin wallet?

  Check out our guide to the best bitcoin wallets for a rundown of more than 15 popular bitcoin-compatible wallets.

• What is the best Ethereum wallet?

  Take a look at our guide to some of the best Ethereum wallets for more information on how to choose an ETH wallet.

• What is the best XRP wallet?

  Check out the popular wallets listed in our XRP wallets guide to help you find an XRP wallet that suits your needs.

• Can I send bitcoin to an Ethereum wallet address or vice versa?

  No, you can’t send bitcoin to an Ethereum wallet or Ethereum to a bitcoin wallet. Different cryptocurrencies have different address types, so it’s important to double-check that you’re sending funds to the correct address before submitting a transaction. Funds sent to the wrong address generally cannot be recovered.

• What is a light client and what does it have to do with wallets?

  Some wallets require you to run a full node, which means you’ll need to download the entire blockchain to your computer. This is not only time-consuming but can also be a drain on your system’s memory and processing power.

  Light clients only synchronise essential information and fetch additional data from the network when required. This allows you to transact on a cryptocurrency’s blockchain without downloading an entire copy of that blockchain. Most mobile wallets are light clients, while desktop light clients can also be downloaded.