What is Ethereum wallet?
Before you can purchase, transfer, spend or trade your Ether (ETH) and other ERC20 tokens, you need a reliable location to store it. The correct way to do this is by using an Ethereum wallet. It’s a secure piece of software that allows you to store your ETHs, make transactions and check your balance.
Types of Ethereum (ETH) wallets
Over time, blockchain specialists and enthusiasts have created several types of wallets, all for different convenience and security purposes. Today the most popular versions widely used among crypto owners are hardware, desktop & mobile wallets. To figure out which of the existing ether wallets best suits your needs, let’s take a closer look at those.
Hardware wallet looks like a USB device. As it stores your private keys in an encrypted form, it is considered to be the safest option.
Desktop wallet is an app that can be downloaded and installed on a computer or laptop. This option is not secure as it seems because if someone gets hold of your computer (even remotely), they could gain access to your wallet.
Mobile wallet is downloaded on a smartphone. It is a great option that can be used at all times when you’re on-the-go. Your crypto funds can be accessed from any location, as long as you have a cellular connection.
Online wallet is a website that is a wallet that can be accessed from any device connected to the Internet.
Paper wallet represents a piece of paper with your private key on it. If ever is lost, it is impossible to recover.
How to choose Ethereum (ETH) wallet
It is common to choose Ether wallets based on their security level. When doing so, it is important to consider the following things:
Private keys storage and who has access. Private keys should only be available to you. It’s not safe to entrust them to any platforms or other parties.
Development team. You should always do your research to learn about the tech team behind the wallet to avoid scams.
Data recovery. Many wallets can help you recover data in the worst-case scenario – if your money is lost. This is an important feature that increases the level of security of your funds.
Custodial vs non-custodial wallets
Your ethers are secure as long as only you can access your private keys. It’s an important thing to keep in mind as such knowledge gives a person full access to funds stored in your wallet. With this being said, you should carefully review whether the wallet you chose is custodial or non-custodial.
A non-custodial wallet is a decentralized type of wallet where you own your private keys. During the setup, along with your private keys, you are required to write a mnemonic phrase to restore your funds in the future. Having private keys means that you are in complete control over the funds but here is the catch – if the mnemonic phrase is lost, you cannot restore access to your funds.
A custodial wallet is more like a service or an exchange. The private keys are kept away from you and stored on servers. To access your funds, you simply use the password you created at the beginning. If lost, access to your account can be easily recovered as your private keys are known to the custodial wallet.
So, the main difference lies in the ownership of core security – knowledge of the private key. This is a question of who you trust more. Can you rely on your good memory or would you rather entrust this to the service provider?
Assuming you want to be in full control over the security of your funds, let’s take a closer look at top custodial ether wallets for desktops, mobile and hardware. What are their strong and weak spots?
Best Desktop Ethereum (ETH) wallets
Atomic is a decentralized multi-currency wallet available for Windows, macOS, and Linux. Supporting over 300 cryptocurrencies, it’s a great choice if you’re going to interact with top cryptocurrencies for Bitcoin, Ethereum, Ripple, Litecoin, EOS, Tron. Security-wise your private keys are encrypted on your device and never leave it. This means you’re the only one who can access your funds.
· User-friendly interface perfect for newbies.
· Supports a wide range of crypto assets, with a list that is constantly growing
· Open source which means its security and transparency was scrutinized by independent programmers.
· Fully decentralized doesn’t require verification for basic services.
· Mnemonic phrase allows users to recreate a wallet in case of PC failure or theft.
· Instant exchange or tokens and coins.
· Does not have multi-signature
Ethereum Mist is the first official wallet made by the team behind the Ethereum blockchain. It is a sort of a browser that was created to serve as a platform for exploring decentralized applications and blockchain networks.
· Open source code which means its security and transparency was scrutinized by independent programmers.
· Users have full custody of their private keys which gives them complete control over their funds.
· Easy to purchase ETH using BTC or fiat money.
· Requires full Ethereum blockchain download during the initial setup, so it takes a lot of memory space.
· Only supports ETH and ERC20 tokens.
· Only available on desktop.
· Takes a long time to log in.
Jaxx is a multicurrency wallet built by an Ethereum co-founder. The idea behind was to simplify blockchain and channel as many customers as possible. So, the developers came up with an easy-to-use platform that is compatible with most desktops and mobile devices.
· Easy to access and user-friendly which makes it easy-to-use for newbies.
· Supports the largest amount of cryptocurrency.
· Lack of two-step verification that is used to enhance security during the login.
Best Mobile Ethereum Wallets
Light multi-asset wallet built on top of common open source libraries. Thanks to a user-friendly application you can easily receive and send over 300+ cryptocurrencies. In terms of security, the app is strongly encrypted, your private key storage is personal, so your funds are controlled by you and no one else.
· Decentralized multi-currency wallet.
· Instant exchange of 300+ tokens and coins.
· Does not have multi-signature
· The wallet’s code is not open-source
Was created by Infinity Blockchain Labs, a leading blockchain R&D firm. First, it was launched for a limited range of crypto coins but today it supports the majority of digital currencies in the market including ERC-20, NEP-5, NEO, and EOS tokens.
· Easy to use.
· Supports most cryptocurrencies.
· Has price optimization, which allows users to set their transaction fees based on urgency.
· Fingerprint authentication is used for extra security purposes.
· As cryptocurrencies are stored on a device directly connected to the Internet, it is more vulnerable to malicious attacks.
· Created in 2017, it is relatively new on the market which makes it less trustworthy.
· Too many performance bugs after the upgrade.
Cobo offers two flagship products: Cobo Wallet, a multicurrency wallet that rewards users for securely growing their cryptocurrency holdings thanks to Proof of Stake (PoS) mining. It implies that a person can mine or validate transactions based on the amount of owned coins. The more coins a person has, the higher is the mining power and more rewards he/she gets. The second one is Cobo Vault, an all-around secure, military-grade cryptocurrency hardware wallet.
· Houses a lot of different cryptocurrencies in one app.
· Additional layers to enhance security: anti-phishing function, a built-in self-destruct mechanism that protects private keys, etc.
· Multi-Signature capability.
· Built-in wallet with a waterproof system for Cobo Vault.
· Cobo Vault is not open source, so independent programmers can not conduct a thorough analysis to explore security vulnerabilities.
· Not a cross-platform solution, only available for mobile devices.
Best Hardware Ethereum (ETH) wallets
Ledger company is a pioneer in the industry of hardware wallets. Ledger X Nano, as well as previous models, support ETH as well as all tokens of the Ethereum chain. The new device has a battery and Bluetooth significantly increasing mobility for those who want to access the wallet at all times.
· Private keys are stored in a secure physical device.
· Ledger Live app allows you to view wallet information even when the device is not connected to a smartphone.
· Encrypted Bluetooth connection.
· Supports a wide range of cryptocurrencies.
· Simplifies navigation, easy transaction validation.
· Compatible with all Ledger hardware wallets Nano X wallet can be restored on any other device using a24-word recovery phrase.
· Not regulated
· The interface is quite complicated
· Relatively high cost, it’s priced $119
· Battery problems (not replaceable)
· Doesn’t have a lightweight
It is known by many as it was the very first hardware wallet introduced on the crypto market. It is very small and connects to computers using a USB cable. It’s crypto storage facilities are offline and so well kept that it is can is safe to use even on malware-infected computers.
· 100% cold storage
· Requires physical confirmation on the device to sign transactions
· Compact size
· Safely to use on malware-infected PC
· Not regulated
· Not entirely immune to cyber attacks
· Limited coin support
· Relatively costly, recent models cost starting $149
It is a hardware wallet that allows you to store multiple cryptocurrencies and access them on the go. It was a fork (divergence) of Trezor wallet, more premium looking and with a larger screen.
· Premium design
· Offline storage
· Multilevel security features
· Multi-currency support
· Requires third-party software add-on
· Does not save setup progress
· You’re doomed if you lose your password (PIN) and recovery phrase. In this case, access is lost forever.
· No local currency amounts, so you need to do your math when sending crypto payments.
Ethereum Paper Wallets
These wallets can be easily generated on special online services. They are then printed on a regular piece of paper with your private and public keys embedded in a QR code. It’s the easiest form of cryptocurrency storage the world has ever known. Setting it up takes just a few minutes and does not require much effort or technical knowledge. Such wallets are immune is not to hackers’ attacks as it lies in a safe place in a drawer.
· Saves you from the stress of ever facing hackers.
· You are solely responsible for the safety of your funds.
· Ideal if you don’t access your wallet often.
· As paper wallets have private and public keys embedded, if they are ever lost or stolen, you can forget about having crypto assets before.
· Easy to steal compared to other types of crypto wallets.
· The keys should be printed on very good paper as with time it tends to tear and wear off. Good printer quality is also recommended to avoid the risk of ink ever-spreading and thus your QR code being impossible to read.
Today the market offers plenty of Ethereum wallets, as it is the second-largest and most popular cryptocurrency in the world. As the technology matures, there will be more options available to the public. When choosing a wallet, it’s very important to scrutinize every single aspect and property to make sure your cryptocurrency is safe at all times whether you’re treating it as an investment or using it as a medium of payment. As history shows no currency is immune to malicious attacks, so you should do your best to secure your assets. The first step is to treat your private keys right and use all necessary precautions to keep it completely safe. For maximum protection try not to entrust it’s a possession to any other party, even the service providers. Stay safe and keep your cryptocurrencies protected!