Best Crypto Wallet (Hardware and Software)

One of the most important decisions a cryptocurrency investor can make is where to store their digital assets. Cryptocurrency wallets are designed to keep assets safe and secure. But crypto is also a hot commodity for thieves. 

If you’re already investing in cryptocurrency, or you’re thinking of doing so, it’s important to figure out the best cryptocurrency wallets for your coins. This article covers crypto wallet basics and offers some of the best choices for each style.

Cryptocurrency Wallet Basics

In day-to-day life, most people think of wallets as small cases that carry their valuables. You put cash, identification, and credit cards in your wallet. By keeping your wallet on hand, you can quickly make transactions and keep your things relatively safe.

A cryptocurrency wallet isn’t quite the same as a physical wallet. It's more like a safe. It stores the private keys that allow you to transact on the blockchain. The private key is your right to ownership of the cryptocurrency. When you sell the cryptocurrency, the private key is “destroyed” by the blockchain, and a new owner receives a new randomly generated private key.

Since cryptocurrency is secured through a “distributed ledger” that cannot be overwritten easily, it's theoretically nearly impossible to steal. However, there is one vulnerability. A crypto investor could have their private keys stolen. This can be done through computer hacking (a hacker steals private keys from your screen), or physically stealing a device with private keys.

Cryptocurrency wallets are designed to keep private keys away from hackers and thieves and in the hands of the rightful owners. Crypto is a huge target, there is no FDIC insurance on crypto assets, and it can be nearly impossible to track down thieves. As a result, anyone with a decent sized Bitcoin stash should be thinking about getting a secure wallet.

Best Hardware Cryptocurrency Wallets

Cold storage cryptocurrency wallets refer to stripped down computers that never touch the internet. They hold private keys and have a button (or two) that allow users to buy and sell crypto on the blockchain. Because cold storage wallets aren't vulnerable to internet-based attacks, they're considered the most secure crypto wallets.

When you first buy a cold storage wallet, you’ll need to download software to your computer. Then you’ll need to take the computer offline and allow the computer to generate a seed phrase for the wallet. Once that seed phrase is written down, you can use it to transfer private keys from one wallet to the next.

Cold storage wallets don’t connect to the internet but they can still be used to buy and sell crypto. These wallets work through bridge applications that run on a computer connected to the internet.

Even though the computer is online, cryptocurrency private keys remain locked in the wallet at all times until a transaction takes place. When it takes place, the cryptocurrency wallet interacts with the transaction, and stores or releases the private keys. That keeps the wallet one layer away from the web.

Trezor One

Trezor One is one of the oldest cold storage wallets and has long been considered one of the best cryptocurrency wallets overall. It uses a USB connection to allow users to transact securely. It also allows users to set up passphrases and other security measures to prevent in-person theft and extortion.

• Cost: $60 (for the lowest-cost version)
• Coins Supported: Supports over 1,000 coins

Ledger Nano S

The Ledger Nano S is a simple wallet that looks like a USB stick. It has a few buttons and a tiny screen that allows users to authorize transactions. The screen is minimal but Ledger Nano S pairs with Ledger Live which allows users to monitor their portfolio. Like other hardware wallets, it has unique passphrase technology that can allow users to hide different accounts on the wallet. 

• Cost: $59
• Coins Supported: Over 1,000 coins.

KeepKey

The KeepKey wallet is a slim wallet with huge potential. It allows users to trade crypto commission-free from the ShapeShift platform. It doesn't have an operating system so it's nearly impossible to hack.

• Cost: $49 (Currently on sale from $79 main price)
• Coins Supported: 40 major coins (does not support minor coins)

Best Software Cryptocurrency Wallets

Software crypto wallets run using software on a device including a desktop or a phone. These wallets connect to the internet so they can be more “hackable” than hardware wallets. 

However, the benefit of software storage is that you don't have to worry about losing a physical USB-like device. Most people also find that software-based wallets are easier to use than the hardware devices.

Exodus

Exodus is a “design-first” software wallet made to make crypto investing easy. Unlike many wallets, you don’t need to be a tech genius to get started with Exodus. The simple user interface and the built-in exchange make it easy to get started with just a few clicks.

The major drawback to Exodus is a lack of security features. While users retain full control of their private keys, the keys are not stored in a particularly secure way. Hackers who can see your screen may be able to steal your pass phrase and your assets.

• Cost: Free (although transactions on the Exodus exchange include charges)
• Coins Supported: More than 130 coins and assets

Mycelium

Mycelium is a software wallet specifically designed for Bitcoin and only Bitcoin. The wallet has been around since 2012 and it boasts integrations with third-party providers including hardware wallets like Trezor and Ledger Nano S. It's a non-custodial wallet, so wallet users retain ownership of their private keys.

• Cost: Payments are on a per-transaction basis
• Coins Supported: Bitcoin

Metamask

Metamask is an Ethereum blockchain wallet designed to keep private keys safe. This software wallet can be used on all major browsers (including Chrome and Firefox). The wallet links directly to Coinbase and ShapeShift so buying and selling tokens is relatively easy.

Plus, Metamask is one of the most well known wallets in the space.

• Cost: Dynamic service fee that ranges between 0.3% - 0.875% on all transactions
• Coins Supported: Ether, ERC-20 coins

Best Exchange Cryptocurrency Wallets

Wallets hosted by cryptocurrency exchanges are the most risky but potentially the most convenient. Users who have exchange hosted wallets are trusting the security of the exchange for the protection of their private keys.

The good news is that many exchanges keep the vast majority of their user's assets in cold storage and provide custody insurance. Plus, they may offer crypto savings accounts that will pay you interest for your holdings.

Exchanges may be a valuable target for hackers. But most investors with modest crypto amounts will be fine with an exchange-based wallet.

Coinbase Wallet

Coinbase is one of the best-known exchanges and offers both custodial and non-custodial asset storage. It's non-custodial wallet offers a clean design and seamless integration with the Coinbase exchange. And that makes it a tough for competitors to beat.

• Cost: Free (although transactions on the Coinbase exchange include trade fees)
• Coins Supported: Support for more than 500 tokens

Gemini Wallet

Gemini is an online wallet that takes private key stewardship seriously. It has reserve funds (much like a bank) and is licensed as a fiduciary (meaning it makes decisions in the best interest of investors). It splits private key storage between an insured hot wallet and cold storage (offline servers). In terms of security for an online wallet, it's hard to beat Gemini.

Note: Gemini Wallet is a safe custody wallet, but if you utilize any other products, like Earn, your crypto might not be safe.

• Cost: Free (although transactions on the Gemini exchange include fees).
• Coins Supported: Bitcoin (BTC), Ether (ETH), Litecoin (LTC), Bitcoin Cash (BCH), Zcash (ZEC), Filecoin (FIL), Dogecoin (DOGE) plus ERC-20 coins.

Final Thoughts

While blockchains are virtually unhackable, the device, software or exchange that holds your private keys may be less secure. If you're looking to better protect your assets, you may want to switch to one of the best cryptocurrency wallets listed above. And once you've chosen the right wallet, you can start comparing cryptocurrency exchanges and crypto bonus offers.