And moving assets between wallets regularly can become costly because of transaction fees imposed by underlying blockchain networks. For these reasons some crypto users have multiple types of wallets: some for long-term safekeeping and others for active trading. There are many single-purpose solutions built for individual cryptocurrencies. These terms may sound unfamiliar, but the main difference between a hot wallet and a cold wallet is whether it is connected to the internet. A hot wallet is on a device that is connected to the internet.
These are often free to use, offering add-on services such as trading or staking in exchange for fees. A hot wallet makes it relatively easy to carry out transactions using crypto, but it may be more vulnerable to hackers who could theoretically reach your crypto over the internet. A cold wallet is on a device that is disconnected from the Internet. Because they are not connected to the Internet, they may be harder for other users to reach.
But if you lose the actual device, recovery could be very difficult. They also generally can hold at least some types of NFTs, or non-fungible tokens , and many connect directly to exchanges where you can buy or sell crypto. The key differences between crypto wallets are: How many types of digital assets are supported?
How easy is it to move crypto offline, into a cold wallet? Are there resources for in-app staking or rewards programs? Atomic Wallet Atomic Wallet allows users to store more than cryptocurrencies, and it also provides options for people who want to buy, exchange, or stake digital assets directly from their wallets. One feature that distinguishes Atomic Wallet from its competitors is that you can buy a paid membership, which allows you to earn rewards when you carry out a transaction using its platform.
Unlike some other hot wallets, however, Atomic Wallet does not offer a browser extension, which can be a big help in using cryptocurrencies to interact with decentralized applications. Assets supported: More than Can convert to cold storage: No. The company operates the largest U.
But Coinbase Wallet is a separate product that allows users to store cryptocurrency themselves rather than keeping it in the custody of Coinbase. The free application has some other strengths, such as mobile and browser-based connections to decentralized applications. It also lacks some functionality offered by competitors, such as a desktop app, though its browser extension connects to the Ledger hardware wallet. Can convert to cold storage: Yes.
Users of Crypto. It also has a desktop app that integrates with Ledger hardware wallets. Another offering that might be of interest to some security-minded users is the availability of two-factor authentication. Can convert to cold storage: Yes, on desktop. Electrum Electrum is an outlier among wallets reviewed by NerdWallet, in that it only works with one cryptocurrency.
That cryptocurrency, however, is Bitcoin — far and away the most valuable cryptocurrency on the market. What Electrum lacks in altcoin offerings, however, it makes up for in security and transparency. This free, open-source product offers two-factor authentication, straightforward connections to cold storage, and support for multisignature transactions which require the signoff of multiple users. Electrum offers only a desktop app, but the tools it offers to Bitcoin power users make it a standout.
Assets supported: One Bitcoin. Exodus Exodus offers a solid set of software tools, including a mobile app, a desktop app and a browser extension. Its products allow users to buy, trade or stake cryptocurrency directly from their wallets, and it has an integration with the Trezor cold wallet intended to help people easily move crypto from hot to cold storage.
Exodus, which is free to use, also has a solid library of explanatory content for people who are learning about crypto. Exodus supports about cryptocurrencies, including many of the most popular assets. However, that number is smaller than some of its competitors who say customers can store tens of thousands of different types.
Guarda Guarda is a free, all-purpose crypto wallet whose users can access their crypto via mobile, desktop or browser extension. It says it supports more than , digital assets. Users of Guarda can move their crypto into cold storage through an integration with the hardware wallet Ledger. Guarda also has staking programs available. Assets supported: More than , MetaMask has mobile and browser-based wallets, though it does not have a desktop app.
MetaMask also does not have staking directly in its app. This is considered more secure but requires you to take more responsibility. These crypto wallets are typically exchange or web-based wallets that you can access through your phone or desktop. These are considered the least secure types of crypto wallets given their continuous connectivity to the internet. Although most were initially custodial, several web wallets are now non-custodial giving you sole control of your keys, which is widely considered an improvement.
Mobile and desktop wallets are based on software that is downloaded to your phone or computer, and they are more secure than web-hosted wallets. Most mobile and desktop wallets are non-custodial, and some are available for both Android and iOS devices, or only work with a specific operating system. Likewise, some desktop wallets are available for Linux, Mac, and Windows, while others are only offered on one operating system.
And lastly, some crypto wallets have both a mobile and desktop version. Crypto hardware wallets are specialized devices that are offline when not transacting and usually look like a thumb-drive. These types of crypto wallets are the most secure but also the least convenient.
They are often known as cold wallets given that they usually remain disconnected from the internet. Crypto hardware wallets are recommended for those expecting to hold large amounts of cryptocurrency long term. For all non-custodial crypto wallets, you should keep a recovery phrase that will backup your wallet and allow you to regenerate the associated private keys on a new wallet should you misplace the original device.
Be sure to store this phrase in a safe place; anyone with access to it may also access the associated funds. Keeping up to date antivirus software and using a virtual private network VPN is also recommended. Most crypto enthusiasts use a combination of wallets: an exchange wallet, a mobile wallet, and a hardware wallet. Your exchange wallet is used to buy, trade, and sell.
Your mobile wallet contains a smaller amount for making purchases, and your hardware wallet is used to secure the majority of your funds. However, you may also prefer a custodial solution such as a trusted exchange to store the majority of your cryptocurrency. Cryptopedia does not guarantee the reliability of the Site content and shall not be held liable for any errors, omissions, or inaccuracies.
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