How to Choose Right Ethereum Wallet for You?

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How to Choose Right Ethereum Wallet for You?

 Ethereum wallets. Cold storage, hot storage. It’s all a bit confusing, isn’t it? Don’t worry, though — I’m here to help! I’ve made this guide to help you choose the best Ethereum wallet for you.

There are lots of different types of such wallets. Each one offers different advantages and disadvantages to the user. Some are easier to use but less secure. Meanwhile, others are great for storing money that you don’t want to use for a long time, but aren’t very good for daily use.

In this guide, we’ll look at the different types of ETH wallets available: paper wallets, online wallets, software wallets, hardware wallets, and mobile wallets. We’ll look at a few examples of each and talk about their security, how to set them up, and how easy they are to use.

After you’ve finished reading the guide, you’ll have learned the advantages and disadvantages of each type of wallet.

 

 Why is Security so Important in the Crypto World?

Security is important in the crypto world because we are dealing with value. In the physical world, we are careful about how we treat our highest valued items. This is the same in the digital world, too.

Online, we must be just as careful to protect the things we value. When you leave your bicycle in a busy street, you lock it up. If you enter your PIN number at an ATM, you hide it from other people. When we leave our cryptocurrency somewhere, we must also make sure that it is properly secured.

Security in cryptocurrency is your responsibility – this is very important! There is no bank to contact if you get hacked, or your security fails. Bitcoins or Ether cannot be returned to the sender by pressing a button like they can with a normal bank transfer. In cryptocurrency, once the coins leave your wallet, they are gone forever. That’s why the best Ethereum wallet must be very secure

Types of Wallets: Choosing the Best Ether Wallet

Hopefully, you now understand the importance of security when it comes to choosing the best cryptocurrency wallet. With that out of the way, let us look at some types of Ether wallets.

Let’s get one thing clear. All the wallet types we will mention support both Ether tokens and ERC-20 tokens. That’s right, your Ether wallet can be used as an ERC-20 wallet. Cool, huh?

Paper Wallets

For now, paper wallets are one of the best Ethereum wallets for long-term storage. When properly created, they are totally offline and impossible for hackers to access. The high level of security Ethereum offline wallets offers to make them great for storing large amounts of cryptocurrency for a long time.

You’re probably wondering, how to set up one of these wonderful Ethereum or ERC-20 wallets, right? Well, first, you need a clean computer. It’s best to completely wipe all the data off it before creating a new wallet. When it is totally clean, do not connect the computer to the internet until after you have finished making your paper wallet

Online Wallets

From the most secure type of wallet, to the least. Next, we will look at Ethereum online wallets.

Ethereum online wallets are those found on centralized services such as cryptocurrency exchanges. They are the least-safe type of wallet. Ethereum online wallets are useful for traders of digital currencies and little else. In general, you should keep your funds for as little time as possible in an online wallet.

There are lots of types of online Ethereum wallets out there. Some of the actually-good examples are Binance, Coinbase, Kraken and Bitrax. 

Pros & Cons

Pros
  • Great for traders. If the online wallet is based on an exchange, all the coins you can buy at the exchange will have their own wallets within one account.

  • It can sell a position very quickly. This is a good thing if you are wanting to time the market. However, it could also lead to bad decisions and cost you money in badly-timed trades.

Cons
  • You don’t own your private keys with an online wallet. If you don’t own your private keys, you don’t own your Ether. If the exchange or wallet service suddenly disappears, your money is gone, too.

  • Exchanges are a good target for hackers. They store large amounts of cryptocurrency at them and if a cybercriminal breaks in, it would be a big payday for them. If an exchange loses all their money because of a cyber-attack, it’s likely that you’ll lose all your money, too.

Software Wallets

Software wallets give users a balance between security and ease of use. They are safer than exchange wallets, and it is easier to make repeat transactions with them than with paper wallets. For this reason, it makes sense to store ETH that you want to use for daily spending in a software wallet.

The main advantage a software Ethereum wallet has over an online wallet is that you keep your own private key. This reduces a lot of the risk of being hacked. However, they are not nearly as secure as paper or hardware wallets.

Pros & Cons

Pros
  • Usually user-friendly designs. Software wallets have been made to give users the easiest way to use the Ethereum blockchain. Sending, receiving, and importing private keys should all be very simple when using any well-known software wallet.

  • Easy to access Ether and other digital currencies. If you make a lot of purchases from online sellers using your Ether, payments can be sent quickly and simply from a software wallet.

Cons
  • Malware and keyloggers are dangerous to software wallets.

  • It can make users lazy with security. Backups are needed. These must not be stored on a computer. The storage of backups raises the same weaknesses as a paper wallet (fire, water, other people). If your hard drive fails, will you be able to access your private keys to restore your wallet on another machine.

Hardware Wallets

One of the most popular methods of storing cryptocurrency is the hardware wallet. Examples of Ethereum hardware wallets include the KeepKey, Trezor, and The  Ledger series. These aim to combine the security of a paper wallet with the usability of a software wallet. People who own them often say that they are the best Ethereum wallets possible.

A hardware wallet often looks like a USB pen drive. They store your private keys inside. A four-digit PIN code is used to access the Ether wallet on the device. If the hardware wallet is lost or stolen, it can be restored using a seed phrase

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