Crypto Wallets

Just like regular money, you need somewhere to store your crypto. Crypto Wallets can be confusing. You might have heard the terms “hardware wallet” or “offline storage”. These types of wallets offer the best security and protection for your crypto, but there are other wallets available too. We’ve explained the pros and cons of each type of wallet, so you can make the best choice when storing your crypto.

The Problem with Crypto Exchanges

When you buy cryptocurrency on a crypto exchange, you can simply leave your crypto in the provided crypto wallet. It means you can quickly trade, buy and sell crypto when you want. The downside to this is that you do not have control over your private keys.

What are Private Keys?

Not your keys, not your coin. A crypto wallet has a private key – usually 12 or 24 random words generated when you first set up a crypto wallet. These private keys are unique and if someone was to find them, they could gain access to your wallet, from anywhere in the world, and simply transfer all of your crypto to their own wallet. That’s why it’s so important to keep your private keys safe and to never leave them lying around or visible online. A public key is the long wallet address that you give to people you want to receive crypto from.

When you buy crypto on a cryptocurrency exchange, you don’t need to worry about private keys. The crypto exchange doesn’t reveal to you what they are and they keep hold of them. You simply buy and the crypto appears in your crypto wallet on the exchange. While this may sound convenient, it’s not a good thing. If you don’t have the private keys to your cryptocurrency wallet, then you don’t really have full control over your crypto. You have to trust that the exchange won’t run off with your crypto, or get hacked.

To avoid having your private keys, and therefore your crypto assets stolen, we recommend getting your own separate wallet and transferring your crypto from the exchange to this wallet. However, there are different types of wallets to choose from. Depending on your level of technical ability, and whether you are buying large amounts of crypto, some options may be better than others.

Hardware Wallets

Hardware wallets are the most secure way to store your cryptocurrency and that’s why we think they are the best crypto wallet you can get. They are sometimes called “cold wallets” or “cold storage”. Hardware wallets are certainly not for people who lose important things. While hardware wallets are certainly secure, if you lose your private keys, you lose your crypto.

Hardware wallets like the Ledger Nano keep your cryptocurrency in “cold storage”. That means that your private keys are stored on the device and remain there the whole time. Your private keys are therefore kept offline and impossible to be taken by hackers.

When you first set up your Ledger Nano, 24 words will be generated for you. You must write these down on paper and keep them safe – we suggest you literally put them in a safe! Do not take a photo of them, or store them in your Google Drive or iCloud. That defeats the whole purpose of buying a hardware wallet. You will also set a PIN for the device.

The Ledger hardware wallets support 1,800+ cryptocurrencies, and if you get the Ledger Nano X, you can store 100 cryptocurrencies on your Ledger at the same time.

How to use a Hardware Wallet

To use this hardware wallet, you will use the PIN to unlock it. If you incorrectly enter it three times the device is locked. If you lose the device, it does not matter much, because anybody who finds it would need to know the PIN. Secondly, they would need access to your Ledger Live account to start a transaction. You cannot make a transaction with the hardware wallet alone.

To send crypto to and from the Ledger Nano, you need to set up a Ledger Live account. You can download the app to make it easy. Your Ledger Nano, depending on which model you buy, is connected either to your phone and the app via Bluetooth or to your computer via USB. You will use your Ledger Live account to make a transfer and it will prompt you to check the device to confirm that the wallet address you are sending the crypto to is correct.

Note, if you wish to use the Ledger hardware wallet with your iPhone you will need to purchase the Ledger Nano X model. Android users are able to use both Ledger models.

That’s about as technical as we want to get with the Ledger. Follow the onscreen instructions and you will have it set up in no time.

By using a hardware wallet like the Ledger Nano, you and only will ever have access to your private keys and therefore your crypto. As long as you keep your private keys safe, no one will ever steal your crypto. Remember, it’s your private keys you cannot lose, not the hardware wallet itself.

Buy Ledger Nano here

Software Crypto Wallets

A software wallet is a type of crypto wallet that you can’t physically hold. They are also known as “hot wallets”. They can be in the form of an app for your smartphone or an app for your computer. These types of crypto wallets are not the safest. Personal software wallets will generate private keys for you, which you can write down and keep safe. However, because these private keys are generated on internet-connected devices, they are left vulnerable to hackers.

Keeping large amounts of cryptocurrency in a hot wallet while also bragging on social media about how much crypto you have is not a good combination. All it takes is for a hacker to get into your account. To do this isn’t difficult if they have access to your email or do a SIM swap and take over your phone.

A software wallet is convenient because you carry it around as an app on your phone. If you want to send crypto to an exchange to sell it, you can do that easily using your software wallet. Some software wallets have trading platforms built right in which makes them even more convenient.

There are many app wallets you can download from the App Store or Google Play. These types of wallets should only be used for small amounts of cryptocurrency for your safety. Keep large amounts in a hardware wallet.

Keep in mind, that using a crypto exchange’s mobile app is not the same as keeping your crypto in a personal software wallet. For example, you can download and use Coinbase’s app to buy and sell crypto. Your funds and crypto can remain in there, but you will not be given the private keys. Should Coinbase get hacked, your precious crypto could be stolen.

Therefore, if you want to use a software wallet, make sure it is one that generates private keys for you when you first make an account. An example of a software wallet that does this is BRD.

Desktop Crypto Wallets

Desktop wallets are a type of software wallet, but they are installed on your computer or laptop instead of your phone.

While desktop wallets offer you complete control of your wallet and your private keys, they are vulnerable. Should your computer be compromised in any way, such as through a virus or malware attack, you run the risk of your keys being found and stolen. Your private keys are only safe if your laptop is safe.

Another downside to desktop wallets is that unless they also have a mobile app, they are not portable.

A great software wallet for beginners is the Exodus wallet. It supports 100+ cryptocurrencies and it has a mobile version and a desktop version that sync seamlessly. Your private keys are encrypted and the app is password protected. While definitely not the safest type of crypto wallet out there, you can pair the Exodus wallet with a Trezor hardware wallet for increased security.

Trezor hardware wallets are not compatible with iPhones, however. That’s why if you’re going to get a hardware wallet, we recommend getting the Ledger Nano X. It supports Android and iOS, connects to your phone via Bluetooth, and it’s cheaper than the Trezor.

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