If you’re thinking about interacting with the crypto world, whether that’s playing NFT games or simply holding tokens, you’ll need to have a reputable crypto wallet. However, deciding on the right type of wallet can be overwhelming, which is why we’ve put together this short guide.
How Crypto Wallets Work
Before we dive deeper into crypto wallets, it’s important to have a basic grasp of what they are. Unlike traditional digital wallets, crypto wallets don’t store your cryptocurrencies. Instead, crypto wallets are tools that hold private and public keys, which let you to view your crypto. Essentially, they make it easier to manage all of your decentralized assets in one place.
What are Public and Private Keys?
When you open a wallet, you’ll receive a randomized private key, which allows you to approve transactions on the blockchain. You have to keep hold of your private key, as losing it will mean losing access to all of your currency. Unlike centralized systems, there’s no failsafe for cryptocurrency wallets.
Your public is the wallet address that everyone else can see, and what you need to give other people so they can send crypto to you. Essentially, your public key is similar to your bank’s account and sort code.
Different Types of Crypto Wallets
A non-custodial or self custodial wallet is one where you have full power over your private keys. In other words, the wallet provider has zero ability to see your private keys, which gives you better ownership.
Custodial wallets, on the other hand, are where a company stores your private and public keys. All you have access to is a platform for managing your assets. Although these are easy to use, they’re much more vulnerable to hacking.
Now that you understand the different types of wallets, we can look a little further. Within these categories, you can break the landscape down further:
- Paper. Stores your keys on paper, which can usually access through a QR code.
- Hardware. Zero internet connectivity but highly secure – often USB pens.
- Online. Cloud-based wallets that run in web browsers.
- Mobile. Accessed through an App – often watered-down versions.
- Desktop. Downloadable software – the wallet is only accessed through your computer.
The Right Crypto Wallet for You
Now that you have the facts, it’s time to choose a crypto wallet. This decision is completely down to you, as it will depend on your personal needs. When choosing a wallet, ask yourself these questions:
- Is high security important to me?
- How much and how many tokens will I hold?
- Are convenient features enough to trade in for security?
- How often do I need to access my coins?
- How much does each option cost?
Deciding on the best crypto wallet can be overwhelming, which is why you need to learn the different types before choosing. Once you’ve narrowed down your options to a certain type of wallet, you should compare the top three within the category.