Contributor, Benzinga
May 16, 2022

Looking for the best crypto wallet? The Ledger Nano X is among the best hardware wallets on the market. If you're looking for a software wallet that lets you buy and sell crypto directly, check out ZenGo.

If you're keeping your crypto on an exchange wallet, you do not control the private key. Techincally, this means you do not own your cryptocurrency. Take control of your money by managing your own private key with a crypto wallet. This might sound complicated at first, but this article will explain everything you need to know to protect your investment.

While many assume that cryptocurrency wallets store crypto in them, this isn't technically the case. Cryptocurrencies are actually stored on the blockchain, a global decentralized database. Every cryptocurrency wallet has a unique address where it can be found on the blockchain, similar to the GPS coordinates of a mailbox. Crypto wallets store the private key needed to unlock this blockchain address; this is why it's so important to keep your private keys safe.

Want to store your cryptocurrency out of reach from hackers? Having your own crypto wallet is the answer.

Crypto wallets come in many forms, including web, mobile, desktop, paper and hardware wallets. No matter the type of wallet you chose, they all serve the same function. However, depending on what you plan to use your cryptocurrency for, some wallets may work better than others.

Best Software & Hot Crypto Wallets

A hardware wallet is to holding money in a bank as a software wallet is to holding money in your wallet. Software wallets make using your cryptocurrency easy, while providing better security than letting an exchange hold custody of your digital assets. The best part: software wallets are free to use! Check out some of the best software wallets you can start using today.

1. Coinbase Wallet

Coinbase wants anyone — anywhere — to be able to easily and securely access cryptocurrency. Coinbase sees cryptocurrency as the future of money and as a catalyst for creating an open financial system around the world.

Today more than 89 million verified users in over 100 countries trust Coinbase to buy, sell, store, use and earn cryptocurrency. Moreover, Coinbase has its own software wallet, adding another level of security. The Coinbase wallet allows for seamless transfers to and from different wallet addresses while emphasizing security through two-factor authentication for transactions.

What many Coinbase users aren’t aware of, however, is that they have the option to use Coinbase Pro (formerly GDAX) with minimal fees. This is a great option for intermediate or advanced users, and I’ve outlined the pros and cons below.

Another important aspect to Coinbase Pro is its great security. Coinbase Pro keeps 98% of the funds deposited on the platform in cold storage, so it’s impossible for hackers to steal more than 2% of users' funds through an online attack. 

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2. Exodus Bitcoin & Crypto Wallet

Exodus is a software wallet that also supports Trezor. You can save money with your crypto wallet, earning high interest rates on any coins you’ve stored. Try the desktop app or the mobile app depending on which works best for you. There are several other apps available for saving with over 145 cryptocurrencies.

Aside from storing your coins and earning interest, you can also exchange, send and receive coins at any time. 24/7 support, a large knowledge base, FAQs, videos and charting ensure that you always have the best information.

Using this platform only incurs miner and network fees. Otherwise, Exodus doesn’t charge anything to use its wallet.

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3. Guarda Crypto Wallet

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Guarda isn't a crypto-specific wallet; instead, the application lets you store Bitcoin, Dogecoin, Ether, Polkadot and thousands of other altcoins on the same platform. Guarda is among the best choices for investors looking to perform several tasks in one place. The wallet lets users stake crypto for interest, earn free crypto and store a variety of digital assets. Moreover, you can exchange crypto directly from the Guarda Crypto Wallet, so you don't need to pay transaction fees to transfer your investments from a separate exchange.

4. Gemini

Stay on top of market trends, build your crypto portfolio and execute your trading strategy with Gemini’s easy-to-use tools. The Gemini app is an industry leading  crypto exchange for both mobile and PC users.

You can track asset prices and real-time market prices anytime, anywhere. The app makes it simple to set price alerts so you can act fast on price movements for individual assets. If you want to consistently increase your crypto holdings while averaging your buy in price, you can schedule recurring buys on bitcoin and other cryptocurrencies.

And Gemini boasts superior cybersecurity and custody solutions. Create a free account and make your 1st buy in as little as 3 minutes.

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5. BlockFi

With a BlockFi Interest Account (BIA), your cryptocurrency can earn up to 9.25% APY. The BlockFi Interest Account lets you earn interest in crypto on your crypto held at BlockFi. Sign up for an account in less than 2 minutes, and start earning interest on the crypto of your choosing on the same day. Interest accrues daily and is paid monthly.

The BlockFi Interest Account does not require a minimum deposit balance to be eligible to earn interest. Withdrawals are often pushed-through same-day, but BlockFi reserves up to 7 days to process a client fund withdrawal. These guidelines will change and improve as the Interest Account product grows and client feedback is received.

There are no hidden fees, no minimum balances, and no reason to wait.

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6. ZenGo

ZenGo is a software wallet designed for simplicity on the go. The ZenGo wallet is available as an app on the App Store and Google Play Store. Typically, most wallets require you to write down a seed phrase, a set of 12-24 words than can be used to restore your private key in an emergency. ZenGo supports the use of your smartphones biometrical scanners to protect your private key for you.

ZenGo allows users to buy, sell and earn interest on a number of cryptocurrencies for a fee. Their app features a modern and simple user interface that makes it a great choice for beginners and intermediates.

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7. Crypto.com

Crypto.com's DeFi wallet is a non-custodial wallet that gives you access to a full suite of DeFi services in a single place. Also, you'll have full control of your cryptos and your keys and can easily manage more than 100 coins.

It's easy to important your existing wallet, and it allows you to send cryptos at your preferred confirmation speed and network fee. What's more, crypto.com's streamlined web app lets you farm and swap DeFi tokens directly from your DeFi wallet.

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Best Hardware & Cold Storage Crypto Wallets

Check out Benzinga’s top picks for hardware cryptocurrency wallets.

1. Ledger Nano X

The Ledger Nano X is at its best when paired with the Ledger Live smartphone app, which allows you to quickly see your balance with or without the device. The Nano X improves upon the Nano S by supporting Bluetooth. You no longer need a computer and a USB cable to confirm your transaction, making the Nano X great for payments on the go.

The Ledger company has made big strides since its inception in 2014. The Nano hardware is slick and modern, and supports over 1,800 tokens. With an OLED display and a powerful app, it's no surprise that Ledger’s products boast over 2,000,000 users.

The Ledger Nano X and a good hot wallet are truly all you need to do crypto like the pros. While the Nano X may seem a bit pricey at $149, it’s a small price to pay for the peace of mind warranted by Ledger’s reputation. The Ledger Nano S now retails for $59, and is a great option for those on a budget who don’t mind using a hot wallet for mobile payments.

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2. Trezor One

The Trezor One, by SatoshiLabs was designed and crafted in the Czech Republic by cryptocurrency advocates and a stellar cyber security team. In Czech, trezor literally translates to “vault.”

The Trezor team is credited with developing the first hardware wallet for cryptocurrencies using modern cryptography. It provides an LED display for an easy-to-use interface, as well as a PIN to access the wallet. Providing even more security, the devices prompts you to use 2-factor authentication when verifying your purchase.

The unique piece of hardware is compatible with Windows, Mac, and Linux and offers over 500 possible alt-coins to hold and trade. Much like every other hardware wallet, the device requires your computer to be connected to the internet and connected via USB.

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3. SafePal S1

Looking for a quick and portable option to track and manage your cryptocurrency on-the-go? Be sure to consider the comprehensive SafePal S1 wallet. The size of a credit card, you can easily take your SafePal wallet with you no matter where you travel. 

To transfer your coins and tokens, connect to the SafePal app using a local QR connection — no need to risk your coins by connecting to public Wi-Fi or using a Bluetooth device. 

Best of all, SafePal offers support for over 10,000 individual cryptocurrency tokens and coins, which means that you’ll enjoy a single wallet for all of your investments.  

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4. Ellipal Titan

The Ellipal Titan does not mess around calling iteself the Titan. This hardware wallet looks more like a Cybertruck phone than a cryptocurrency wallet - it even has a touch screen display to interact with your cryptocurrencies. Ellipal wallets are air-gapped, which means your precious private key is protected in a fully isolated environment that will never touch the internet.

The Ellipal wallet pairs with an app to serve the security of a cold wallet with the functionality of a hot wallet. The Ellipal is also capable of handling both Ethereum tokens and Binance Smart Chain tokens - a rare feature!

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Hardware vs. Software Crypto Wallets

Both hardware and software wallets store the private key that grants access to your crypto assets on the blockchain. Hardware wallets are physical devices that store your cryptocurrency offline. The Ledger Nano X, Trezor Model T and SafePal S1 are popular names in the hardware wallet industry.

Software wallets are applications you download onto your computer or mobile device. Software wallets work similarly to hardware wallets, but are typically connected to the internet. A wallet connected to the internet, also known as a hot wallet, is more susceptible to leaking your private key.

Hardware wallets are considered the most secure way to store cryptocurrency. It is the best choice if you invest significant amounts of money and don’t plan to trade it regularly. Software wallets are generally used for smaller amounts of money intended for active use.

Types of Cryptocurrency Wallets

  • Hot wallets: These types of wallets use keys that were created or are stored on a device that has access to the internet. Hot wallets offer a high utility but are often considered less secure than cold wallets. These wallets should not be used for large sums of money.
  • Cold wallets: From the Ledger Nano X to a piece of scrap paper, cold wallets are any method of storing your private key permanently offline. This ensures the highest level of security for large amounts of money not allocated for constant usage.
  • Exchange wallets: Most cryptocurrency exchanges are happy to store your crypto assets for you, although this is not recommended. Crypto exchanges typically hold your assets in a cold storage wallet. While this is convenient for tiny amounts of money and those that have yet to find a replacement wallet, it means surrendering custody of your assets to a centralized entity that could be malicious. Best practice entails moving assets off of your preferred exchange into your own hot or cold wallet as soon as possible.
  • Custodial wallets: Some institutions with absurdly large holdings prefer not to have the stress of securing their assets, so instead they pay someone to do it for them. Custodial wallets are managed by a trusted 3rd party and highly insured. This way, institutions can feel safe knowing they're insured incase of failure, and top notch security experts can make a profit off of their skills.

What to Look for in a Crypto Wallet

The biggest factor you should consider when choosing a crypto wallet is the security of the wallet. However, how you plan to use the wallet is another big factor when deciding which storage solution to use. If you're planning on buying and holding your investment for the long term, a hardware wallet is likely your best choice.

A solid strategy to manage risk is to limit the number of funds that can be accessed through less secure platforms, such as exchanges, while keeping the bulk of your funds in a more secure wallet somewhere offline. You might even choose to have several wallets to limit your risk. Hackers love centralized points of attack, so some investors even split up their cold storage private key among a group of secret trusted friends and family, so no 1 individual could be tortured for the money.

Security

2-factor authentication: 2-factor authentication, also called 2FA, is another way to verify your identity when logging into your crypto wallet. If someone had your password or managed to crack your password through any of a number of methods, they would still need to pass the second level of authentication, typically a code sent to your phone which needs to be entered into a sign-in field before access to the wallet is granted.

Multi-signature support: In some cases, a crypto wallet is owned by several people, like business partners, for example. Multi-signature support means that you can set the security for the wallet to require multiple keys before access is granted. This prevents any one person from spending the funds in an unauthorized way or from transferring the funds to another wallet.

Wallet Utility: Mobile, Exchange & DeFi Wallets

Exchanges as crypto wallets: A large number of cryptocurrency owners have used Coinbase or other exchanges as both an exchange and a crypto wallet. Coinbase is many people’s go-to, as it has a variety of tokens, allows payments, buying, selling and even trading through its Coinbase Pro platform. Plus, Coinbase stores the majority of its users' funds in cold storage, adding a level of security. While this is highly convenient, it is not recommended for large sums of money.

Mobile wallets: While convenient, mobile crypto wallets create a unique set of potential security vulnerabilities. First, phones are often lost or broken. If the wallet key is only stored on the phone, a broken or lost phone could possibly make your wallet permanently inaccessible. However, some mobile wallets like Coinbase and Argent offer ways to restore your wallet if an accident happens. 

Seed phrases can give you access to your cryptocurrency if your wallet is lost, stolen or broken. It's important to store your seed phrase somewhere safe, and if you're particularly secure, you'll store your seed phrase in more than 1 location. The best way to store your seed phrase is in your head and on a piece of paper locked away somewhere secure.

DeFi Wallets: Some cryptocurrency wallets, like Coinbase Wallet, now support trading cryptocurrency directly from your crypto wallet. This can be done without an intermediary thanks to the robust network of decentralized finance applications that allow users to trade digital assets in a decentralized way. If you're looking to use a cryptocurrency wallet but still want to trade your investments, then you should look for a wallet that has built in DeFi features.

Supported currencies: Many crypto hodlers own cryptocurrencies based on multiple blockchains, and need a wallet for each of them. Maintaining a separate wallet for each type of currency can become confusing. Most crypto wallets these days support a variety of coins and tokens, although the Ledger Nano remains on top with over 1,800 tokens across a multitude of blockchains. 

Hardware Wallet Versus Exchange Storage

If you don't use a crypto wallet to hold your cryptocurrency, then you'll have to trust your crypto brokerage to hold your private keys. Although holding your crypto on an exchange is not recommended, U.S-based exchanges like Coinbase and Gemini are relatively safe from security breaches. However, big exchanges have been breached in the past, including Binance and Bitfinex

Here are some of the pros and cons you should consider when deciding whether to use a hardware crypto wallet:

Pros of Using Hardware Wallets

  • Incredibly hard to be hacked when stored offline.
  • Total control over your crypto.
  • No know your customer (KYC) requirements.

Cons of Using Hardware Wallets

  • It takes time (a few minutes) and device access to get your cryptocurrency from your hardware wallet to an exchange, so you can’t trade it quite as easily.
  • More expensive.

Get the Best Crypto Wallet for You

There's no one best cryptocurrency wallet, and many investors use several wallets for different purposes. It's a good idea to have a hardware wallet regardless of how you use crypto, as this can act as your digital asset vault to store the majority of your funds on. A software wallet is important to have too, as it makes it much easier to interact wit applications like OpenSea and Uniswap.

For beginners who are looking for an easy and safe way to buy a large variety of coins, Gemini and Coinbase are the best options. If you’re looking for a more involved user experience and less expensive fees, you should consider Coinbase Pro. 

Frequently Asked Questions

Q
What's safer, a hardware wallet or software wallet?
A
Hardware wallets are the most secure way to store cryptocurrency. Since software wallets are computer programs, there's still a small chance that an online hacker is able to breach your wallet and seize your funds. If you want to be as secure as possible, opt for a hardware wallet.
Q
Is a crypto wallet actually necessary?
A
In all cases, using a cryptocurrency wallet will protect your investment better than not using a cryptocurrency wallet. However, some exchanges are secure enough where a crypto wallet may not be necessary. If you use Coinbase, then your funds are in good hands and you may not see a need to use a crypto wallet. Remember, however, that you'll need a crypto wallet to use DeFi platforms like Uniswap, Compound and Aave.

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