Last Updated on September 28, 2021 by Justin Su
To get involved in cryptocurrency you must need to have cryptocurrency wallets. If you are planning to buy Bitcoin then you need to have a Bitcoin wallet and if you want to buy Litecoin then you need to have a Litecoin wallet.
Each network has its own wallet like to store tokens that are created on Ethereum can be stored in Ethereum wallet. If you send any coin to any other network then you will lose your coin.
It means if you want to send Ethereum then you need to send coins to Ethereums wallet only if you sent it to any other address then you will lose your money and it is not reversible.
Choosing the best cryptocurrency wallet is much important where there are many insecure, fake, and unsafe cryptocurrency wallets.
In this article, we are going to check out the list of best cryptocurrency wallets and learn how to choose cryptocurrency wallets.
How Does Cryptocurrency Wallet work?
Cryptocurrency wallets are a way to send, receive, and store cryptocurrency online & offline. You can send cryptocurrencies to anyone using your wallet and can receive the same.
Wallets are the way to store your coins but actually, all coins are store on the blockchain, like if you are using a Coinbase wallet then your coins are not stored on Coinbase but are store in blockchain and Coinbase is just a medium between you and blockchain that perform all tasks for you.
There are different types of wallets that work differently. Every wallet has mainly two types of Keys, Public & Private Key.
Public Keys are your wallet address, where you receive or send cryptocurrency. Private Keys are like your password, you need a Private Key to access your wallet.
Note: Never Share Your Private Keys
Some wallets allow you to have access to your Private Key and some don’t, it depends on the type of wallet.
Wallets are used to view balance and transfer funds If you have Private Keys then you have control over your funds and no one can steal them from you unless you lose your private key.
Custodian wallets hold your private key and non-custodian wallets are those wallets that allow you to have a private key.
Cryptocurrency Wallet/Transaction Fees
If you are a beginner then you must know about transaction fees. Each blockchain charges different transaction fees based on transactions.
As of now to send simple Ethereum or Ethereum based tokens one has to pay around $4.00 as a transaction fee and to transact Bitcoin you have to pay around $2.00 as a transaction fee.
Transaction fees change every second it is not stable and some wallets also allow you to set transaction fees.
In April 2021, the transaction fee for Bitcoin was around $60 per transaction. It means if you want to spend $100 Bitcoin from one wallet to another then you have to pay a transaction fee of $60 and the receiver will get only $40.
Always do check how many fees you are paying before making the transaction. The less fee you set the more time it will take to transact and the high fee you set the less time it will take to transact.
Type of Cryptocurrency Wallets
There are different types of wallets that offer different functions and working methods. Some are the custodian and some are not.
Some wallets offer multi-chain supports it means you can store Bitcoin, Ethereum, Litecoin, or any other supported coin in one place.
Following are the types of cryptocurrency blockchain wallets.
Full-Node wallets are wallets that are developed by developers who are behind the project or coin. It is a wallet where you get to control your private keys and host a full copy of the blockchain.
You can find Full-Node wallet on coins official website or on Github of the coin. Mostly this type of wallet is used by Miners and developers.
There are many exchange platforms where you can buy and sell cryptocurrencies but they can be used to store coins as well.
But I do not suggest using Exchanges to store your coins because exchanges platforms can get hack and it can either take time to get your coin back or you may lose all.
It just happened with a crypto exchange called Cryptopia where users are waiting to get their coins back for the last 2 years.
Online wallets are web-based wallets where you don’t need to download any app or extension. All the data are saved on the server. Here you don’t get control over your private keys. But of web wallets are backed by funds so using them is safe at some level.
Desktop wallets are app-based wallets, you have to install the app on your desktop device. These types of wallets are mostly used types of wallets. There is some wallet that allows you to take control of your private key and some don’t.
You can use cryptocurrency wallets in your mobile wallets as well. You just need to install a wallet on your device. But while installing make sure you are installing the correct app. There are many phishing applications as well.
Hardware wallets are the safest cryptocurrency wallets that store coins offline and give full control of your wallet.
This type of wallet is mostly used by big holders.
Hardware wallets are costlier wallets, other wallets are free to use but hardware wallets are not. You have to purchase a hardware wallet.
Note: Always purchase hardware wallet from the official seller. Test wallet once and then uses.
If you don’t want to spend money on hardware wallets or don’t like hardware wallets then go with paper wallets they are also one of the safer wallets.
Paper wallets are used by big holders who want to store coins for a long time.
Extension wallets are used for quick transactions. You have to install the extension on your browser. But make sure you have not installed unknown or unsafe extensions to your browser before.
How To Choose Cryptocurrency Wallets?
Cryptocurrency wallets can be used for different uses by different people. Some use to store coins for the long term and some use for daily trade.
Before choosing any wallet check whether the wallet is safe or not and if it is said to be safe then it is used by the community or not.
Always go with the wallet is mostly used by the community.