If you are here to read about the best Cryptocurrency wallet, then you are at the right place. The price of cryptocurrencies such as Bitcoin and Ethereum has skyrocketed in 2017. If you have not yet got on the train, now is the right time. Traders, like you, these days are involved with their deals because you are able to visualize profits. A quick tip. If you are investing in multi currencies, then you need a wallet that supports all those coins.
If you are planning to get really involved and trading like a professional then it is good to gain information about cryptocurrency wallets. You must know how the wallets work and which one out of the big list can be beneficial for you. Go through the guide below, you will find some details about cryptocurrency wallets so that you can ensure a best trading experience in the crypto market.
- 1 The best cryptocurrency wallet of 2017
- 2 Details of the best cryptocurrency wallet:
- 3 What is a Cryptocurrency wallet?
- 4 How do these wallets work?
- 5 Types of Cryptocurrency Wallets:
- 6 Conclusion
The best cryptocurrency wallet of 2017
I list some of the best cryptocurrency wallets of 2017 in this article as follows:
- Ethereum Wallet:
- Ledger Nano S:
Best Hardware Cryptocurrency Wallet in my opinion is the Ledger Nano S.
Best Software Cryptocurrency Wallet in my opinion is Exodus.
Details of the best cryptocurrency wallet:
The Copay wallet is developed by BitPay and is ranked high due to its added convenience of usage with intuitive interface. The wallet works online as well can be accessed from desktop or mobile handset. You will be happy to hear that Copay is a popular multi signature type wallet that can be used by multiple individuals to sharing funds together. This wallet is rated best for beginners due to its user friendly work platform whereas the experienced traders love its feature rich management.
- Its free.
- The client and server are open source software.
- Beginners can start here with ease.
- Offers multiple wallet storage options.
- Works on multiple devices and platforms.
- Allow multi-signature type transactions.
- Great security and privacy management.
- It has limited user support options.
- Observed to be unresponsive at times.
- Is only a bitcoin wallet.
Check out the demo video for the Exodus wallet:
The Exodus wallet was developed recently and currently works only on desktop platform. It works on Unix, Mac and Windows desktops. You can trade and store Bitcoins, Dash, Dogecoins, Litecoins and Ether using this wallet. It is extremely easy to use and offers fast transactions with its intuitive interface. This wallet also offers quite simple guide for wallet backup. One of the most amazing thing to know about Exodus wallet is its exchange like design. It allows users to trade altcoins using Bitcoins or vice versa even without exiting their wallet.
- Available for free.
- Popular open source platform.
- It extends support to multiple currencies.
- Offers in wallet trading options.
- Quite easy to use.
- Intuitive interface.
- Beginners find it quite easier to use.
- It cannot be accessed using mobile applications.
- Doesn’t even have a web interface.
If you are searching for bitcoin based deals and need a classic digital wallet then the Mycelium wallet is probably the best choice for you. This mobile friendly wallet works perfectly on Android and iPhone platform while assisting you with easy bitcoin transfers. There is no third party that can have control over your funds. It also offers cold storage options along with encrypted PDF backups.
- Free of cost.
- It is an open source software platform.
- Feature rich.
- Offers good privacy features.
- It is not targetted for beginners.
- Hot wallet.
- There is no desktop or web interface.
- Private keys are stored by a third party.
- It is a bitcoin wallet only.
The Jaxx wallet is a simple to use multi-currency wallet that supports Bitcoin (BTC), Ether (ETH), ETH Classic, Litecoin (LTC), Dash (DSH), REP and DAO. The Jaxx wallet is available on different platforms including Windows, Apple and Linux desktop, Android and iOS mobile and tablet, and as Chrome and Firefox extensions. The wallet also has built in support for Shapeshift that will let you convert your cryptos from one currency to another. It was a close call between Exodus wallet v/s Jaxx, but Exodus narrowly took the win for me.
- Fast and simple to use.
- Supports multiple currencies.
- Open source software tool.
- Available on many platforms.
- Complaints of losing currency.
- iOS version had some bugs.
- Charge a huge fee for transactions.
- Not open source.
It is a simple to use mobile bitcoin wallet that will assist your to make easy transactions using bitcoins. You can download this wallet from Google play or App store. The Bread wallet works like a standalone system where you do not need any server to initiate transfers. You have complete control over your funds and can maintain deals with high security. This was my first wallet when I entered the cryptocurrency world.
- Fast and simple to use.
- Great security and privacy terms.
- Open source software tool.
- Available for free.
- Best for beginners.
- Hot wallet.
- Limited features.
- Only mobile based; no desktop or web based interface.
- Another bitcoin only wallet.
The Ethereum Wallet is also known as Mist. This is the official wallet provided by the Ethereum project. The wallet also stores Ethereum based tokens or other cryptocurrencies. It acts as a key to using decentralised applications on the Ethereum blockchain.
- Official Ethereum wallet.
- Can transact ERC-20 tokens, and hence can be used for ICO crowd sales.
- Write smart contracts
- Very slow as it has to sync the entire Ethereum blockchain.
- Only an Ethereum wallet.
- Very resource intensive.
Ledger Nano-S wallet:
This is my favourite hardware wallet for cryptocurrencies. The Ledger Nano-S is a cryptocurrency multi-asset wallet that is actually similar to a USB drive or removable media. The Ledger Nano S connects via a USB cable and uses Chrome based apps to access your addresses and coins. Currently it supports the Big 3 coins – Bitcoin, Ether and Ripple, amongst others.
- Offline storage of coins.
- Convenient to carry around.
- Supports 3 cryptocurrencies.
- Cheapest hardware wallet.
- Limited availability. I waited for 1 month for the device to ship.
- Expensive as opposed to software wallets
Trezor wallet is similar in idea to the Ledger Nano-S. The Trezor wallet was a pioneer in developing a screen for a hardware wallet. It is a multi-cryptocurrency wallet. It supports Bitcoin, Litecoin, Ether, Zcash, Dogecoin, Dash and many other altcoins. The device creates your private keys in its secure chip and stores your keys offline.
- Great security and privacy terms.
- Easy web user interface.
- Expensive option.
- Slightly bulkier than the Nano-S
KeepKey is a relatively new hardware wallet. It is based on the Trezor code but has better finishing in the material used. It feels like a premium wallet. At the time of writing, it was not available for sale on Amazon. Keepkey have just provided notice that the team is no longer supporting the wallet.
- Excellent finishing.
- Simple to use client UI.
- Limited availability.
- Heavy and hence not so portable.
- Complaints of device not working after few months.
The Electrum wallet was available since 2011 and is one of the most popular Bitcoin wallets. The wallet does not download the entire Bitcoin blockchain. It only indexes the blockchain, and hence is relatively quick. It is available on the Linux, Windows, Mac and Android platforms. Using the wallet you can sign transactions from a computer that is always offline.
- Open Source with an MIT license.
- Its fast.
- Supports 2 factor authentication.
- Supports hardware wallets.
- Uses Simple Payment Verification (SPV) to verify transfers.
- The User Interface seems very dated.
- Only a Bitcoin wallet.
- No support for iOS or web interface.
The Coinomi wallet is slowly gaining lots of attention. The wallet is a multi-currency wallet and at the time of writing has support for over 70 cryptocurrencies and tokens. The wallet is also a Hierarchical Deterministic Wallet (BIP44). It has built-in support for converting cryptos using ShapeShift.
- Open Source.
- Support for largest number of cryptocurrencies.
- Very light and not resource intensive
- Simple and easy to use.
- Lacks supports for 2 factor authentication.
- Only available on Android.
- There have been few complaints about losing currencies.
What is a Cryptocurrency wallet?
A cryptocurrency wallet is a specially designed software program or hardware which helps to store and transfer cryptocurrency. A cryptocurrency wallet needs to interact with the blockchain of the currency that it supports. A wallet stores the private key needed to protect the coins stored in it. Wallets provide details about the amount of currency balance available in the account (address). Most wallets have the feature to let you know the history of transactions too. A cryptocurrency wallet is a must for those who are investing or trading in cryptocurrencies.
How do these wallets work?
Cryptocurrency as the name suggest uses cryptography. In the field of cryptography, information or data can be securely transmitted between two parties with the help of a Public-Key Infrastructure (PKI). PKI is made up of a Public and Private key pair. Each user that wants to be involved in this setup will have his own unique Public-Private key pair. The Public key is something that everyone will know, but the Private key is only for your eyes. If I need to send you a message, I will encrypt it with your Public key and only the Private key can be used to decrypt it. Hence, it is important for the Private key to be kept safely. Your Public key is the address to which your receive your cryptocurrency. The corresponding Private key allows you to transfer funds out of the address. Without the Private key, you cannot spend your valued cryptocurrency. However, if it makes you happy, you can still receive funds at the Public address.
If all the above makes sense, then you will understand that cryptocurrency wallets store your private key. The wallets interact with the blockchain of the currencies that they support. Whenever any person sends bitcoins or any other cryptocurrency to you then they simply sign off their ownership of those coins from his wallet and it is now registered to your wallet. If you want to use these coins further or wish to unlock your funds then the public address assigned to currency must match with the private key stored inside your wallet. When the private key and public address form a perfect match then the balance at sender’s wallet will naturally decrease and it will increase equally in your wallet. In this digital trading world, there is no real exchange for currency coins. All the transactions are monitored by blockchain based transaction records and modifications of balance information in your wallet. Additionally, you can read more about blockchains in my post on Ethereum.
How do you obtain a cryptocurrency address?
Typically, your wallet will generate a public cryptocurrency address for you, along with the corresponding private key. Most wallets also protect the private key with a separate PIN that you must enter to view the private key. It is recommended that you write the private key on a piece of paper and file it away. You can always refer to the private key on the paper to regenerate your funds stored at your cryptocurrency address.
Different cryptocurrencies have a different address naming scheme. Always be careful that you send the right currency to the right address. There have been instances where people have sent Ether to a Bitcoin address. As a hint, Bitcoin addresses start with ‘1’ or ‘3’ whereas Ether addresses start with a ‘0x’.
Types of Cryptocurrency Wallets:
I have used these terminology in the review of the best cryptocurrency wallet above. However, now is the time to explain it, if you are still interested.
Hot versus Cold Wallet:
Wallets are categorised by the how they are connected to the internet. A hot wallet is a wallet that is actively connected to the internet. Examples would be Exchange based wallets or in our case Jaxx or Bread. A cold wallet is a wallet that is not actively connected to the internet. Examples would be any hardware or paper based wallets.
Hot wallets are typically considered riskier as they can be prone to cyber-attacks. These wallets are however much easier to use. Cold wallets are more difficult to use but are generally less prone to cyber-attacks but could be lost due to negligence or physical theft.
These wallets are typically hosted by the Exchanges themselves. They are stored on their servers. Although they provide easy access to you, the biggest trouble is that private keys are stored online and they are often managed by third parties. You do not have access to the private key. Hence, for online wallets your wallet becomes prone to hacking or theft issues. Like a typical web application (banking), if your account is compromised you will lose access to your coins. Many exchanges are beginning to use 2 factor authentication. This means that you need to not enter your username and password but also another factor, such as a random number that is sent to you via an SMS.
Desktop wallets are also typically hot wallets, however the software is downloaded on your own machine. This means that you have direct control over your private key. Which is great, but with great power comes great responsibility. You must secure the machine and protect it from any virus or hacks that could compromise the desktop wallet. This is to prevent you from losing your cryptocurrency. Desktop wallets can be used only on the computer on which they are downloaded and installed.
In this case, wallet simply works on smartphone with the help of dedicated application. As they are accessible from handheld devices so you can use them anywhere as per your needs. Mobile wallets are well known for their simple and smaller design as compared to desktop type wallets; they demand lesser memory space on your handheld device. Once again, if you lose your mobile, you stand a chance of losing your cryptos.
The hardware wallets are quite different from that of software wallets. In this case the private keys are stored in a dedicated hardware device such as USB or private mini-computers. Note that, the transactions through these wallets are made online but due to the offline hardware based storage they appear safe to use. These wallets can be connected to most of the popular web interfaces. Users can easily make decisions about which one they need to trade. It can be laborious to transfer funds as you need to connect to a machine with supported apps. These wallets always protect your currency by staying away from online access that is why several professionals prefer to use hardware wallets for their cryptocurrency trading. The private keys never leave the device. The only way for the keys to be compromised is if the device is lost, stolen, or damaged.
You will find paper based wallets quite easier to use and they offer much higher level of security to your funds inside. Generally, as the name depicts, the paper wallet represents printout or any physical copy of private and public keys that are used for making transactions in digital trading world. One can also find it like a specially designed software tool that helps to generate pair of keys with higher safety and then they can be printed out. A paper wallet is intended to be hacker-proof from digital attacks as it is never connected, its a piece of paper. Trading using paper wallets is very cumbersome. You need to either manually type the address or scan the QR code printed on the paper. Manually typing runs the risk of you getting the address wrong and the funds going elsewhere.
I have tried to explain various types of wallets that you may find useful in order store and protect your cryptocurrency. Feel free to evaluate which of these work for you based on your trading style. A good recommendation will be to make use of a mix of cold and hot wallets. This will provide you the flexibility you need to trade and also secure your cryptocurrency gains.
So tell me in the comments section, which is your best cryptocurrency wallet of 2017.