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Like many markets, cryptocurrency is in an interesting place right now. There are tons of people who are losing money on cryptocurrency who would take issue with it being described as “interesting”, but that sort of thing happens in finance all the time. That is a consequence of people trying to be too clever.
The reason why crypto is in an interesting place is that it is cheap. All those people are losing all that money because the value of crypto went down. In the market—whether that market is stocks, real estate, foreign currency, or even crypto.
There are three rules:
And…
People do not talk about that last one as much. Why? Because waiting for something to come back up is a risky prospect. At least it is most of the time. Because most of the time, you never know whether or not something is going to keep falling or suddenly start rising. And technically speaking, that is true now.
But the difference between the market fluctuations of today and the market fluctuations of a year ago is that the market fluctuations of today are making the biggest cryptocurrencies in the world cost half as much. That is a good thing for newer investors who might have held off investments due to the cost.
So, crypto is cheaper than ever. It might not be done falling yet. But eventually it will, and then it will bounce back. And the steeper something fell, the steeper it will climb when it bounces off the bottom.
But if you are getting into cryptocurrency due to this opportunity, there is something you should know: Crypto does not work like normal (called “fiat) currency, such as the American Dollar. You cannot hold it in your bank account. Instead, it is contained within a network of applications called “blockchain apps”.
The basic idea is that each blockchain app is connected to each other by certain “protocols”. Every app tells every other app where every token of a cryptocurrency is at all times. So, if you have a Bitcoin blockchain app on your computer, it contains a ledger of who owns and who owned every Bitcoin ever.
This is a staggering amount of information. To make it easier to access, people have crypto wallets.
You need a crypto wallet because they are what make your crypto holdings safe and easy to manage.
Ownership of any crypto is determined by who owns the “keys” to that cryptocurrency. If you own the keys to access and transfer the crypto, then you are the owner of the crypto itself as well.
Crypto wallets are specifically designed to help you keep your crypto keys secure. They have a few different ways of doing this, from well-known methods like two-factor authentication, to more unique methods like offline storage of keys.
And today, we are going to go over the top 8 best crypto wallets on the market.
It will surprise no one that the best crypto wallet on the market right now is the wallet provided by the biggest cryptocurrency platform out there.
What makes Coinbase’s wallet so good is not that it is the best at anything. It is more appropriate to say that it is the second best at everything.
Coinbase has security due to its various methods of key recovery and password protection, as well as heavy encryption on its site. It is free to use, and even covers a wide variety of ordinarily obscure currencies. It connects to its trading platform, and even has tutorials for beginners.
In short, it offers just about everything that you might want out of a cryptocurrency wallet. But the best part is probably the fact that tons of other people use it. That means trading with other Coinbase users is never hard. It also means that there are lots of eyes scrutinizing it for mistakes.
A crypto wallet with a lot of eyes on it is far more honest by necessity than one that is barely known.
Of course, spreading itself so thin means that Coinbase does not really excel anywhere. Trading has efficiency problems, notably due to still having commission fees on trades. The security is strong, but there is no offline option for your keys, which makes lots of people nervous.
In short, everything could be a little better, and many people will end up feeling drawn to more niche products as a result.
This is another wallet attached to a trading platform, but this one holds an advantage over Coinbase: Where Coinbase charges transaction fees, Binance does not.
Something we mentioned earlier, however, is the fact that most trading platforms have done away with commission and transaction fees.
So, what makes Binance so special? Simple: It is the largest trading platform after Coinbase. That means in many ways, you get a lot of what you get out of Coinbase, minus the cost. This includes high-end security, a great community of traders, and even those guides on how to trade crypto well.
Binance focuses on trades between users. Not every cryptocurrency can be traded for every other cryptocurrency. To help facilitate trades that would otherwise be difficult or impossible, Binance provides a “translator currency” of its own. This currency is controlled by the platform itself.
Basically, the value of Binance never changes. It is “pegged” as always being $1 per token. You can buy Binance from the platform, and then use it to trade with other users. If you trade cryptocurrency for Binance, you can exchange that Binance from cash. What exactly does this mean for you?
It means that you can easily trade with other users without having to worry about there being some complex protocol for transferring money between your bank and theirs. This helps things stay fast, easy, secure, and opens the doors to trading with people all over the world.
Of course, being so similar to Coinbase means that Binance inherits its problems as well. You will find that many people use Binance to trade and store their Binance tokens, but they will migrate to other wallets that have more specialized security. That Binance token can’t be transferred out either.
And given the downfall of Terra Luna and the instability of USD Coin, people are generally wary of translator currencies pegged to fiat currencies these days.
Most cryptocurrency wallets are digital. That means they protect your keys using methods of password encryption that you are probably familiar with, like encryption, security questions, and two-factor authentication.
But isn’t it a bit of a security concern for your keys to be connected to the internet at all?
That is a question many people have asked themselves. In particular, it was a question asked at the beginning of the cryptocurrency boom. The answer was somewhat obvious, as that was a time similar to the wild west in that attempts at crypto banditry and hacking were common. What was done about it?
Trezor is one of the original companies to solve that problem. They have a huge line of higher secure offline crypto wallets. The way they work is that the keys to your crypto are both generated and stored in the offline wallet. You can access the crypto by plugging the wallet into a computer with an internet connection. But after you access the crypto in that instance, the keys to the crypto will be regenerated.
This makes the keys basically impenetrable. When keys are stolen off of websites, it is usually because the websites are hacked, not the keys themselves. This takes away the websites, leaving the indestructible keys. Of course, there are still ways to retrieve keys if you lose your wallet.
The problem is that recovery after a lost wallet is not easy. In fact, it is designed to not be easy. The more you think about it the more it makes sense: A lost wallet is like a lost credit card. You would probably prefer a credit card to be easy to cancel if it is lost rather than hard to cancel.
All the same, it means that most of the people using hardware wallets will have to be both careful and familiar with how they work. This leaves the appeal in the hands of advanced users.
Lots of crypto wallets offer trading. Coinbase and Binance are two that have already appeared on this list due to their large communities and stable of standard security offerings.
But all the same, there are crypto wallets that stand out even among such a competitive market as this.
Exodus is one such wallet. How does it stand out? Well, let’s begin by talking about what its desktop app offers. That is one difference that experienced traders will notice right away: It is not a trading platform handled through a website. It has an app, meaning it has a much higher upper limit of complexity.
And boy does it make use of that complexity. Essentially what the Exodus app offers is highly advanced tracking and research for how cryptocurrency is going to move. It takes this method of scrutinizing crypto from stock trading apps which focus on the same thing: Using information to speculate.
The information it gives you is much more than you might expect: Multiple overlays, mathematical algorithms, tutorials and scholarly research of relevant topics, and on and on. There is so much that it can be absolutely daunting. But once you use it, it will be hard to trade crypto without it.
Of course, it is no slouch as a wallet either, boasting great security and the ability to hold onto tons of different cryptocurrencies. This makes it above average in tons of different ways.
That feeling of it providing so much that it’s daunting is exactly what most first-time users notice right off the bat. This is particularly pronounced with Exodus, as most cryptocurrency traders do not have experience in the stock market. That means they might be taken by surprise at its interface.
It is a massive understatement to say that Exodus is meant for experienced traders. The full truth of the matter is that it is meant for experienced traders of an entirely different discipline. This means that you will be building analysis skills for trading other securities, but not everyone wants that.
Part of the logic of a physical crypto wallet is that it allows you to carry your crypto wallet around with you wherever you go. But why not just attach that function to something you are already going to carry everywhere? It does not take a genius to see the appeal of a crypto wallet that’s on your phone.
But while it is easy to put two and two together to make a crypto wallet app on your phone, it is not as easy to understand the implications of that. You see, phones are actually quite the security liability.
You pass by people every day, and your phone takes notice of them. Through Bluetooth, through wifi, and through your phone’s data network. Even if you have all of these turned off, your device still has the receptors for these signals built into it. They can even be accessed remotely while they are off.
This means that there is always a chance that your phone is remotely probed. What Mycelium does is make a security protocol that is secure against all of these possible paths of attack.
They do this by engaging every device in your phone that could provide such an exploit and shutting those pathways down. They also encrypt your keys to a dizzying degree, using 256 key encryption. It is hard to overstate the level of security this encryption brings. Imagine a brute force attack on the keys.
256 key encryption means that every character in the key is encoded with a string between 1 and 256 characters long. It would take billions of years to crack this code even with the most advanced supercomputers in the world. Most hackers don’t even try cracking these.
It should be noted, however, that Mycelium’s trading is focused on using the blockchain.
Which leads us cleanly to the issues many people face with this wallet. Mycelium is intuitive for what it does, but it does not allow you to trade in the normal sense. There is no crypto market where you can buy cryptocurrency. Instead, there is only the peer-to-peer trading that the blockchain offers.
In fact, Mycelium’s website issues a warning to people that want to store their cryptocurrency on wallets tied to exchanges (like Coinbase and Binance). The short version is that they advise against it.
The long version is that Mycelium’s security measures and lack of trading are essentially attempts to make it an offline wallet that you carry around on your phone. This is what makes it so secure, but also what makes it unintuitive. Most people will get a crypto wallet on their phone to trade with it.
There are tons of ways to trade crypto on your phone though. Only Mycelium, as incomplete as it can feel, offers you the level of security that it does on your phone.
While Mycelium might advise against getting a crypto wallet from an exchange, the big advantage of such wallets is that they make it incredibly easy to set them up, transfer in your funds, and use them.
All three of those steps are what makes crypto.com stand out with its wallet.
In particular, consider that middle step: How do you transfer your funds into your crypto wallet? For most platforms it means transferring your keys from the blockchain to the wallet, essentially storing your holdings there.
But on some platforms, it will also mean getting a payment method set up so you can buy crypto. On crypto.com, transferring in funds means one more thing. It means consolidating your platforms.
Between Coinbase, Exodus, Robinhood, and a dozen other trading platforms we have not mentioned here, there are a lot of different places to get cryptocurrency. One of the best things that crypto.com offers is the ability to assemble all of these different accounts together into one interface.
Not only that, but crypto.com also hosts trading through the same interface for most of these platforms. That means it onboards you well, makes it easy to trade, and removes the barriers between you and your holdings on other platforms. That is the kind of convenience most bankers would kill for.
While crypto.com has a lot going for it, the shortcomings are going to be very noticeable to anyone who has traded on another platform. Strangely enough, one of their greatest strengths reflects a weakness; crypto.com connects tons of different platforms and currencies, and that slows it down.
Transaction speeds on crypto.com are noticeably slow. And you might be thinking, “That does not sound like that big of a deal.” But you are probably underestimating just how slow we are talking here.
Buying Bitcoin can take up to ten minutes. This opens the door for all sorts of different hardware issues to disrupt the trade and leave you wondering if you paid for something and got nothing.
Not that this happens often. But the slow transaction speed has another side effect: It makes rapid trading basically impossible. Rapid trading is how most people grow their crypto holdings, so this is a big deal if you are looking to get into that.
Hardware wallet aficionados will be pleased to see a hardware wallet declared as having the best security. But at the same time, they will not be surprised.
If you can pardon their smugness, there are plenty of good reasons for this. Understanding why starts with understanding “seeds”.
When your keys are generated or regenerated, they are produced with a “seed”. This seed is the base equation that is used to develop the key. After the key itself is generated, it needs encryption.
This encryption is randomized, meaning that it also has a seed that generates it—always a different seed than the first. The funny thing is both of these seeds are randomly generated too. They need a seed to generate them, and that seed needs a seed to generate it… Where does this all stop?
The answer is that it stops with the ledger nano. Most wallets, both hardware and software, can eventually have their seed generation traced back to a single algorithm for developing the seeds. Crack that algorithm and you crack the keys. How do you solve this little security conundrum?
The answer is that rather than having a single security algorithm, you have three random number generators to create one. That is what the ledger nano does. Not only is it not connected to the internet, not only does it have optional biometric seed generation, but it creates an algorithm that is unique.
And uniqueness is better than randomness. The problem with randomness is that you have to have a discreet algorithm for creating the randomness. Making a unique string rather than a random string means that you just have to have a nearly-infinite number of possibilities, rather than truly infinite.
If all of this sounds like a lot of talk about how great this wallet is without mentioning its features, it is because the ledger nano is rather scarce on features. Naturally it does not trade, either through a platform or through peer-to-peer trading. But it also holds fewer currencies than other wallets.
It also disallows things like staking and yield farming, as your crypto has to be totally untied from any transactions in order for this wallet to work. For some people, that will be unduly restrictive.
And lastly, it is quite the complicated piece of technology. But that is one of the appeals of hardware wallets: They are not something that anyone can pick up and use, meaning they’re hard to compromise.
The thing you have to understand about an advanced crypto wallet is that it will probably not look complex on the surface.
Getting your account set up, funded with crypto, and trading are all easy. But what makes MetaMask an advanced crypto wallet is not what it shows you at the outset.
There are three things that MetaMask gives you access to that make it a highly advanced crypto wallet: Staking, yield farming, and graph analysis. Graph analysis is the easiest of these to explain, as it is basically just using different data points to analyse trends in the market. Not that this is a simple thing to do, but it is certainly easier to explain than the other two.
Yield farming and staking are both methods of generating passive income through your crypto holdings.
In both cases you are loaning out amounts of crypto and getting some crypto credited to you as a reward for taking on that risk. Taking part in these requires you to opt into them on the right platform, as well as having the right amount of a crypto in order to do it with (it changes from crypto to crypto).
MetaMask allows you to do all of that. It even helps you do it. But because it is such a complicated task, it is still never totally easy.
Aside from the obvious issues of an advanced crypto wallet, there is one other thing about MetaMask that might make you reconsider your use of it: Of all of the wallets on this list, it is the least secure.
MetaMask is another wallet attached to a cryptocurrency exchange. Their exchange has the smallest community of all of the exchanges on this list. But it also has the largest user base. What does that mean? It means that MetaMask is known for having a serious problem with bots on its platform.
This can make legitimate trades hard to come by, and it is why most people use MetaMask for its storage and passive income features rather than its trading features.
MetaMask seems to be somewhat aware of this, as they also have the least charting and research tools for planning out trades of all of the exchanges on here too. Basically, it is not the place to try and get rich off of trading crypto. It is a place to make a smaller, steady income off of crypto.
Now that you have a good idea of what crypto wallets are out there, you can start asking yourself some important questions. The most obvious question is, “What sort of crypto wallet do I want?”
But while that is the natural response to being presented with options, we would like to rephrase it. Do not worry about what you want. Thinking about that will lead you in no strong direction. Think about what you need. To that end, here are some different needs crypto wallets fill.
This is the big one. Lots of wallets will try to make any feature matter except for this one, as it is the hardest to get right.
While security is the one you need the most practically, trading is what makes people feel like their crypto purchases are justified the most. That means you need it in a different way than security.
The big argument for software over hardware wallets. Recoverability means the ability to get your keys back should you lose them. Much easier on a software wallet than on a hardware wallet.
Surprisingly necessary. If your wallet’s interface is hard to understand, then that can cause you to leak way more value than you think. Between losing track of your keys to being uncertain how to start or resolve a trade, a good interface is the difference between success and failure for many crypto holders.
This matters most to people who trade crypto, but it is very hit or miss whether it impacts you otherwise. Most people do not start with obscure crypto, but you might need to due to the initial investment.
With that, you have a good idea of what you might need out of a crypto wallet, as well as the different products on the market and what they can provide for you. Just be sure to trade responsibly. This is a great time to get into the market, as recessions like these are how millionaires are made.
But they are also great ways to lose tons of money getting overzealous trying to “beat” the market. This is why a wallet with no trading options is as valuable as one with tons of trading options: A lack of trading options keeps you honest to the savings you are trying to create.
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