Many people use a hardware wallet to store their private cryptocurrencies offline.
Think: portable hard drive for your digital assets.
A hardware wallet, also known as a “cold wallet” or “cold storage,” is distinguished from software wallets or “hot wallets,” which are based on the Internet or on your computer.
Hardware wallets are more secure than software wallets because the private keys used to access your cryptocurrency are embedded onto the microcontroller of the device itself, making them impossible to hack.
If you have a significant investment in cryptocurrency, hardware wallets are a necessity for keeping your coins safe and away from the possibility of a cryptocurrency exchange getting hacked.
Our research team ranked the the best hardware wallets of 2018.
CoolWallet is a rather unique hardware wallet that is designed to look and feel like a credit card. It features an LCD screen that is used to input passwords and read off seeds, making it impossible for anyone to steal them off you unless they’re physically watching over your shoulder. Hardware wallets with screens are exceptionally useful because it means that they can be used even with computers that have been infected with malware, since all transactions are displayed on the screen.
CoolWallet also boasts a control button that allows you to manage your cryptocurrencies easily, and is also built to be resilient, as it is bendable up to 15 degrees and is heat resistant up to 140 degrees Fahrenheit (60 degrees Celsius).
CoolWallet is oriented for mobile users instead of computer users, so the setup process might be cumbersome for some. The device requires you to download an app to your smartphone, then pair your phone with your CoolWallet. Additionally, some users have reported glitches and bugs when setting up their CoolWallets. Finally, CoolWallet only supports Bitcoin at the moment, meaning you can’t use it to store other cryptocurrencies.
At a price of $119, CoolWallet is a decent option for Bitcoin HODLers who want a cheap and secure way to protect their investments. Its resilient, compact design and ease of use are definite selling points for newbies. However, more serious cryptocurrency enthusiasts may want to pass on CoolWallet due to its lack of altcoin support, its glitchy setup, and its mobile-centric design.
Case is a self-contained hardware wallet that boasts a number of unique features, from fingerprint swiping to multisig security.
Case’s most important feature is the way it stores users’ private keys. Of the three keys used by its multisig system, one is hardwired into the wallet itself, another is stored on Case’s servers, and the third is held by Third Key Solutions, a trusted cryptocurrency security firm, though users can override this and carry the third key themselves. Setting up the device via the Internet is easy and fingerprint swiping adds an extra level of security.
Additionally, Case has built-in support for the Celery exchange, allowing users to buy and sell Bitcoin directly from their wallets, without having to transfer anything to a online “hot wallet” or exchange wallet. This is a nice option for traders.
Downsides to Case include the inability to remove the first private key from the device—which means that users will not be able to access their money should Case go out of business—as well as a lack of altcoin support. Case is also priced somewhat steeply, at $199.
Case’s security measures, fingerprint support, and built-in exchange functionality make it a worthwhile option for Bitcoin traders and HODLers, though more advanced users will want to look elsewhere.
The Cryo Card and Cryo Coin are two products from CryoBit that function similarly, offering resilient and secure cold storage for Bitcoins.
The Cryo Card is a credit card-sized hardware wallet featuring a Bitcoin address printed on the front and an encrypted private key on the back. Users who purchase a Cryo Card offer their existing wallet information when checking out, as the card itself has no interface. The Cryo Card is manufactured from stainless steel, making it the toughest hardware wallet we’ve found, able to survive just about any form of abuse.
The Cryo Coin is roughly the same as the Cryo Card, only it is slightly less expensive, as it is manufactured from nickel-coated brass.
Due to their lack of many of the features of most hardware wallets—you can’t plug them into a computer, they have no interface, and all transactions must be done manually—the Cryo Card and Cryo Coin are not recommended for anyone who needs easy access to their funds. Additionally, the Cryo Card and Cryo Coin only support Bitcoin at the moment, making them useless for anyone who needs to store other cryptocurrencies.
However, for users who want a low-tech solution when it comes to crypto storage, the Cryo Card and Cryo Coin are worth a look. Their low price—the Cryo Card retails for $50 and the Cryo Coin for $30—belies their solid construction and ability to withstand punishment, making them good long-term ways to store your Bitcoins.
OpenDime is a hardware wallet that functions as a hardware bearer bond or “credit stick,” and it is priced quite inexpensively, at $40 for a pack of three.
OpenDime’s unique feature is a physical seal on the wallet itself that secures the Bitcoins contained on it against being hacked or transferred. When the user is ready to spend the Bitcoin online, they merely need to break the seal, which reveals the private key and allows the Bitcoin to be used. An unsealed OpenDime allows the user to conduct as many in-person Bitcoin transactions as they want.
Because of this seal, OpenDime has been likened to a piggy bank, in that it needs to be destroyed in order for the Bitcoin to be used. While seemingly wasteful, this security feature makes OpenDime wallets a great long-term store of value, since users merely need to check the seal to determine whether the device has been compromised. OpenDime wallets are also great for person-to-person transactions, since these transactions take place outside of the blockchain and the Bitcoin contained in each wallet will be secure so long as the seal remains unbroken.
Like the wallets previously mentioned on this list, OpenDime does not support altcoins. Additionally, its nature as a bearer bond means it cannot be used for online transactions, at least not without destroying the seal and rendering the device useless.
However, OpenDime’s inexpensive price and unique security features make it a worthwhile option for those looking to hoard Bitcoin over the long term.
Digital Bitbox is a USB stick hardware wallet notable for its altcoin support and wide variety of features.
A minimalistic device similar to the Ledger HW.1, Digital Bitbox is notable for its microSD support, allowing users to make offline backups of their wallets with a microSD card. Digital Bitbox also stores users’ private keys on a high-security chip that boasts a lifespan in excess of fifty years, ensuring that users will never lose access to their funds.
Most notably, Digital Bitbox boasts support for cryptocurrencies other than Bitcoin. At the moment, Digital Bitbox supports Bitcoin, Ethereum, and Ethereum Classic as well as ERC20 tokens, making it a good option for users who need to store these coins offline.
Finally, Digital Bitbox is priced at €59 (roughly $75), making it an affordable option as well.
Digital Bitbox’s primary downside is the lack of a display, requiring it to be paired with a computer in order to be used at all. However, its combination of accessibility, security, afforability, and altcoin support make it one of the strongest options available for cryptocurrency users.
BitLox is a luxury hardware wallet designed for Bitcoin HODLers and others with cash to spare. Its suite of elite features sets it apart from the competition in myriad ways.
Similarly to CoolWallet, BitLox is designed to resemble a credit card, with a thin titanium build that is resistant to heat and water damage. BitLox also features a unique e-paper display akin to the Amazon Kindle that consumes very little battery power and functions even when the device is powered off. Most impressively, BitLox features a full keyboard, allowing users to make transactions without the use of a computer.
BitLox also boasts a large number of security features, such as an emergency PIN that irreversibly wipes all user data from the unit and the ability to generate over a hundred wallets with each unit. BitLox also features a number of convenience options, such as an internal calculator that automatically displays fees when making transactions, as well as support for multiple languages. BitLox is also compatible with Tor, allowing users to make transactions in total anonymity.
Where BitLox largely falters is its price. Its least expensive variant, the BitLox Advanced, retails for $199, while more comprehensive models are priced even higher. Additionally, BitLox currently lacks support for cryptocurrencies other than Bitcoin, though the developers claim that they will be adding altcoin and Ethereum support soon.
For Bitcoin HODLers who are looking for the ultimate in features and luxury, BitLox may be worth its steep price tag. However, altcoin users and more casual crypto traders may want to look elsewhere due to BitLox’s high price.
KeepKey is a hardware wallet that is widely recognized as one of the best on the market due to its combination of security and convenience features and reasonable pricing. It is based off of TREZOR’s hardware and firmware, but boasts a heavier aluminum design for added durability.
One of KeepKey’s most distinguishing features is its privacy and security. It supports seeds of up to 24 words in length for added insulation against hackers and also supports PINs and number randomization. KeepKey uses a Google Chrome plugin to allow users to manage their wallets via a computer, making the wallet compatible with any device so long as it is capable of running Chrome. KeepKey also boasts a high-quality LCD screen.
KeepKey’s most notable feature is its strong altcoin support. Indeed, KeepKey is currently compatible with all altcoins currently available on the market, including Ethereum, Litecoin, and Bitcoin Cash, provided the user pairs their KeepKey with a compatible software wallet.
The one major downside to KeepKey is its $99 price tag, which may be out of the range of some buyers. However, if you want a reliable, secure hardware wallet that is compatible with a wide variety of altcoins, KeepKey is easily one of the best options available to you.
The Ledger Nano S is one of Ledger’s most recognized and popular hardware wallets due to its reliability, security, speed, and features.
Unlike the discontinued Ledger HW.1, the Ledger Nano S comes with a screen, making it possible to use the wallet with a computer even if that computer is infected with malware. The wallet also boasts two buttons which must be pressed at the same time in order to confirm a payment, making it impossible for hackers to hijack the Ledger Nano S and use it to make unauthorized transactions.
Like other wallets, the Ledger Nano S boasts PIN support for added privacy when using it. However, it lacks passphrase support, which may be a dealbreaker for more security-conscious users. Additionally, unlike most hardware wallets, the Ledger Nano S does not include a battery, meaning that it will shut down when not connected to an external power source.
Like KeepKey, the Ledger Nano S supports Bitcoin, Ethereum, and a wide variety of altcoins, giving it a flexibility that many hardware wallets lack.
The Ledger Nano S’ steep price of $95, its lack of passphrase support, and its lack of an internal battery are its primary downsides and may dissuade security-focused users and budget-conscious customers from buying it. However, the Ledger Nano S’ quality screen, strong security, and extensive altcoin support make it one of the finest hardware wallets available, and one of our top picks for 2018.
TREZOR is a high-end hardware wallet that offers one of the best blends of security and accessibility of any wallet on the market today.
TREZOR’s main distinguishing features are its PIN protection system and screen. Like most hardware wallets, TREZOR requires a PIN to be inputted during setup and used every time a transaction is made. Every time the wrong PIN is entered into the device, it raises the amount of time needed before inputting it again by a power of two. For example, entering 30 incorrect PIN entries would take 15 years. This makes TREZOR one of the most secure hardware wallets available.
In addition to standard seed technology, TREZOR also allows users to add a passphrase, which further adds to the security of their crypto stash. The wallet can also be set up via TREZOR’s official website, a Google Chrome plugin, and via command line for experienced users. Users who care about security should use the latter two options (and use the Chrome plugin on an offline computer), as there is a small risk of data leaking when using TREZOR’s website.
Finally, TREZOR is notable for its wide variety of supported altcoins, making it an extremely good option for those with diversified portfolios.
TREZOR is often compared to Ledger Blue, with the latter slightly edging out the former due to its greater breadth of features and superior interface. Both TREZOR and Ledger Blue are quite pricey, so lower-end users might prefer a less expensive hardware wallet. However, TREZOR’s suite of features and its slick, quality design make it impossible to ignore. If you’re looking for maximum flexibility and security in your hardware wallet, TREZOR is one of the best choices you can make.
1. Ledger Blue
The Ledger Blue is easily the most advanced hardware wallet currently available, and one of the best in terms of quality, security, and features.
The Ledger Blue sets itself apart from the competition by having a more advanced, smartphone-like design, with a high-quality touchscreen interface. It is easy to set up and offers seeds of up to 24 words in length for added security. It is also compatible with numerous desktop apps and software wallets, allowing you maximum flexibility in accessing and using your money.
Additionally, the Ledger Blue is secured against virtually all forms of tampering and hacking. Unlike other hardware wallets, the Ledger Blue does not ship with anti-tampering seals, because it doesn’t need them: due to cryptographic technology included in the wallet’s design, external tampering is ineffective. The Ledger Blue will also deactivate after three failed login attempts, while users who lose their Ledger Blues can merely buy a new one, then use their 24-word seed phrase to regain access to their funds.
The Ledger Blue is also immunized to malware attacks by virtue of the fact that it has a screen, meaning that you can set it up without connecting it to a computer and risking infecting it. Like Ledger’s other wallets, the Ledger Blue also features extensive support for Bitcoin, Ethereum, and altcoins.
The primary downside of the Ledger Blue is its price: at $199, it may be out of the range of most buyers. This is due to the touchscreen and tablet technology the wallet uses, which is head-and-shoulders above virtually all other hardware wallets.
However, for serious crypto users who have money to spend, the Ledger Blue is an unbeatable wallet, with enough security and other features to satisfy any users. Newbies may also want to consider the Ledger Blue, as its touchscreen interface makes it considerably easier to set up and use than any other hardware wallet.
Hardware wallets represent a significant investment for any cryptocurrency user due to their cost and what they represent.
While many people have dabbled in cryptocurrency through day trading and other means, purchasing a hardware wallet means you are serious about protecting the integrity of your money. While keeping small amounts of currency on software wallets and exchanges is okay, if you’re a long-term HODLer or investor, you need a hardware wallet to ensure that your assets don’t get hacked or stolen.
When looking for a hardware wallet, you need to consider security, flexibility, and usability above all else. A hardware wallet needs to be capable of protecting your assets from hackers and phishers, it should be easy to set up and use, and it should offer support for as many different cryptocurrencies as possible. Effectively, hardware wallets need to be as easy to use as regular wallets are.
If you’re ready to take the next step in your crypto adventures and purchase a hardware wallet, we highly recommend the wallets listed above. You can be sure that your assets will be safe if you use any of them. They also offer a different variety of features and are priced accordingly, so you can find a wallet that meets your needs and fits within your budget.
Given the nature of cryptocurrency, you cannot afford to take risks with your assets. A hardware wallet will allow you to safely store your crypto holdings while making it possible for you to buy and sell them and use them in business transactions. No matter your level of involvement in cryptocurrency, hardware wallets are a worthwhile investment that will pay for themselves many times over.
Ranking the best Bitcoin Cash wallets of 2020
If you are interested in using Bitcoin Cash, the first thing you need is a wallet.
All cryptocurrencies require wallets, which are computer files that are capable of storing an infinite amount of a given cryptocurrency. You need a wallet in order to store your Bitcoin Cash and send or receive more.
All Bitcoin Cash wallets are identified by their wallet addresses. These are unique strings of letters and numbers that identify the wallet on the Bitcoin Cash network. If you want to receive Bitcoin Cash from another user, they must know your wallet address, and the reverse applies if you want to send someone else Bitcoin Cash.
Bitcoin Cash wallets, like other cryptocurrency wallets, are separated into hardware and software wallets. Hardware wallets are physical devices akin to USB pen drives that allow you to store your Bitcoin Cash, while software wallets are computer programs, smartphone apps, or websites that store your Bitcoin Cash digitally.
Here are our picks for the best Bitcoin Cash wallets out there.
KeepKey is a hardware wallet known for its longevity.
Unlike competitors such as the Ledger Nano S and Trezor wallets, KeepKey is rather bulky. However, unlike Trezor, it includes support for Bitcoin Cash. It features an LED screen with a PIN system, preventing thieves from accessing your funds since they must know the PIN in order to access the device.
While KeepKey is not as advanced as its competitors, its low price, ease of use, and its support for Bitcoin Cash make it worth considering for some users.
CashAddress is a website that creates paper wallets, an easy and low-tech way to store Bitcoin Cash.
A paper wallet is a wallet that consists of a piece of paper with a QR code printed on it. To create a paper wallet, you generate one with CashAddress, transfer your funds to it, then print it using a printer. You should then laminate it and stash it in a safe place to ensure it doesn’t get misplaced.
Paper wallets are advantageous in that they offer maximum security with very little effort. Unlike regular hardware wallets, paper wallets cannot be hacked since they aren’t computer systems; you can’t hack a piece of paper. Additionally, paper wallets are easy to set up, since all they require is a printer and paper.
One major problem with paper wallets is that they are difficult to retrieve funds from. Additionally, they require you to keep tabs on them; if you lose your paper wallet or it is damaged, your funds will be lost forever. Unlike hardware wallets, paper wallets lack mnemonic seeds or other recovery systems.
While paper wallets lack accessibility, if you just want to store Bitcoin Cash for the long haul without using it very often, they’re a good, simple solution.
Atomic Wallet is a software wallet that features a simple interface and extensive security and usability features.
One of Atomic Wallet’s greatest selling points is its extensive cryptocurrency support; you can store over 300 cryptocurrencies, including Bitcoin Cash, via the wallet. Like Exodus and Jazz, Atomic Wallet also has a built-in cryptocurrency exchange system. Like Jaxx, Atomic Wallet allows users to buy cryptocurrency with a credit/debit card.
Atomic Wallet protects users through its mnemonic seed system, which encrypts users’ private keys as a safeguard against hacking. Additionally, Atomic Wallet private keys are tied to the device the wallet is used on as an additional security precaution.
Atomic Wallet is available for desktop and mobile devices. If you’re looking for a software wallet that is feature-rich, Atomic Wallet is a good choice.
Exodus is a software wallet noted for its clean interface, built-in portfolio system, decentralized exchange features, and extensive security options.
Exodus is distinguished from its competition in part because it offers a portfolio feature that allows users to track the value of their Bitcoin Cash and other holdings within the app itself, saving them from having to use a separate portfolio program. Similarly to Jaxx, Exodus is also noted for its decentralized exchange system, allowing users to buy and sell cryptocurrency within the app itself, though unlike Jaxx, Exodus does not support debit/credit cards.
In addition to this, Exodus boasts a clean, easy-to-use interface and strong security, which includes its one-click recovery system, a feature that allows users to restore their wallet by using a recovery phrase.
Exodus is available for both desktop and mobile devices, though older phones may not be compatible with it. Exodus is ideal for those looking for an all-in-one solution for portfolio management, trading, and wallet storage.
Electron Cash is a software wallet that is specifically designed for use with Bitcoin Cash.
A fork of Electrum, one of the oldest Bitcoin wallets around, Electron Cash is noted for its speed and flexibility, allowing you to store, send, and receive Bitcoin Cash without having to download the blockchain to your computer.
In addition to this, Electron Cash uses mnemonic seed phrases to back up user data, allowing you to retain access to your funds even if you are locked out of your account.
Electron Cash is primarily a desktop wallet but is also available for Android phones. While its lack of support for other cryptocurrencies may be a deal breaker for some users, if you are just interested in storing Bitcoin Cash, Electron Cash is a good choice.
Jaxx is a mobile-centric software wallet designed for accessibility.
Jaxx supports multiple cryptocurrencies in addition to Bitcoin Cash, such as Bitcoin and Ethereum. It is also noted for its built-in exchange, allowing users to buy and sell cryptocurrency without having to use another exchange as a middleman.
Jaxx’s most important security feature is a 12-word backup seed that can be used to restore your account if you lose access to your device. In sharp contrast to many software wallets, Jaxx allows users to control their private keys and export them whenever they want.
Available for both desktop and mobile operating systems, Jaxx is a good choice for newbies who want to store their Bitcoin Cash without getting hung up on details.
Coinomi is a lightweight mobile software wallet designed for ease of use.
Boasting support for over 125 cryptocurrencies, Coinomi has become a popular software wallet for users who wish to use multiple cryptocurrencies with a minimum of hassle. The wallet also supports SegWit and allows users to make peer-to-peer cryptocurrency purchases through a decentralized exchange system, as well as with their debit/credit cards.
Coinomi also includes a number of standard security features, such as two-factor authentication and backup seed keys. In addition to this, Coinomi boasts that none of its users have ever been hacked or compromised since the wallet launched in 2014.
Originally designed for Android phones, Coinomi is also available for iOS, Windows, and other platforms, and is a strong option for those who are looking for a well-rounded software wallet.
The Ledger Nano S is one of the world’s most popular hardware wallets. Ledger wallets are favored among many cryptocurrency users for their security features, usability, and affordable prices.
The Ledger Nano S is a multi-currency wallet that supports many other currencies aside from Bitcoin Cash, making it perfect for storing all of your holdings. It boasts a built-in LED screen, which allows you to check your balance without plugging the device into your computer. The Ledger Nano S also uses a PIN code feature that prevents unauthorized users from gaining access to your funds, useful if you lose your wallet.
As a safeguard against the device being stolen or lost, the Ledger Nano S incorporates a backup seed key. This allows you to regain your funds if you no longer have access to your wallet due to theft, loss, or damage.
Finally, the Ledger Nano S integrates with many popular software wallets and exchanges. This allows you to easily move money between your Ledger Nano S and the Internet if you want to make purchases.
The Ledger Nano S stands out for its modest pricing, making it a favorite of both serious Bitcoin Cash users as well as newbies. For the ideal blend of security, accessibility, and functionality, the Ledger Nano S is the way to go.
1. What is a Bitcoin Cash wallet? A Bitcoin Cash wallet is a computer file that can be used to store Bitcoin Cash. Wallets can contain an infinite amount of Bitcoin Cash and are generally classified into two types: software wallets and hardware wallets.
2. Why do I need a Bitcoin Cash wallet? Wallets are the only way you can store Bitcoin Cash. All Bitcoin Cash in existence is held in a wallet.
3. How do Bitcoin Cash wallets work? All Bitcoin Cash wallets have a unique wallet address. This address identifies the wallet on the Bitcoin Cash blockchain. Bitcoin Cash wallet addresses are rendered as a series of random numbers and letters, though they can also be generated as QR codes, allowing them to be scanned with a tablet or smartphone for easier use. If you want to send Bitcoin Cash to another user, you need to know their wallet address; if someone wants to send you Bitcoin Cash, they need to know your wallet address. To send Bitcoin Cash, enter the desired amount and the wallet address of the intended recipient using your wallet address. To speed up the process, you can use QR codes instead if you have access to a mobile device.
4. Is it possible to send Bitcoin Cash to a Bitcoin wallet or vice versa? No. Following the Bitcoin fork on August 1, 2017, Bitcoin and Bitcoin Cash became two entirely separate cryptocurrencies and blockchains. While they share much technology due to their origin, they are completely different cryptocurrencies. Sending Bitcoin Cash to a Bitcoin wallet or vice versa will result in your funds being lost forever. Because of this, you should only send Bitcoin Cash to Bitcoin Cash wallets. Anyone who held Bitcoin at the time of the fork received an equivalent amount of Bitcoin Cash in a separate wallet.
5. What separates hardware and software wallets? Hardware wallets are physical devices used to store Bitcoin Cash. Hardware wallets are designed in a fashion similar to USB pen drives and can be connected to a computer or other device to access and move funds. Software wallets, in contrast, are programs, apps, or websites on which Bitcoin Cash is stored. These two types of wallets are separated by how easy and convenient they are to use and their level of security. Hardware wallets are the most secure way to store your Bitcoin Cash since they are only connected to the Bitcoin Cash blockchain and Internet when you choose to plug them in, meaning they cannot be accessed by hackers. However, software wallets are a better option for those who are planning to use Bitcoin Cash to make purchases because they don’t need to be physically plugged in before use. Most Bitcoin Cash users use both hardware and software wallets depending on what they want to do. Hardware wallets are typically used for long-term storage while software wallets are used for trading and transactions. Depending on how you are looking to use your Bitcoin Cash, you will need both hardware and software wallets to accomplish different types of tasks.
6. What is the difference between “hot” and “cold” storage? “Hot” storage is a term used to describe wallets that are always connected to the Bitcoin Cash blockchain. “Cold” storage is used to refer to wallets that are only connected to the blockchain when the user elects to connect them. Hardware wallets are all “cold” storage by default since they are physically separated from the Internet except when the user plugs them in. Software wallets are usually “hot” because they are always connected to the blockchain.
7. What is a paper wallet? A paper wallet is a variant of hardware wallet that is printed on paper. Paper wallets were originally invented for use with Bitcoin and were subsequently adapted for Bitcoin Cash use when it forked from Bitcoin. To create a paper wallet, you use a paper wallet generator to create one along with private keys, transfer your Bitcoin Cash to the new wallet, and then print the wallet out using a printer. This simple, low-tech method of storing Bitcoin Cash is used by some cryptocurrency enthusiasts due to its high level of security. Because they are just pieces of paper, paper wallets cannot be hacked, making them safe from many threats. They also do not need to be configured in the same way that hardware and software wallets do; once you have printed your paper wallet, you merely need to store it without having to learn how to use a hardware device or app. However, paper wallets require you to keep track of them; if your paper wallet is damaged or lost, your funds are lost with no way to get them back. Paper wallets are also extremely inconvenient and are difficult to transfer funds to and from after they are printed. Because of the inadequacies of paper wallets, more advanced means of storing cryptocurrency have been developed. Despite this, paper wallets are still used by a small core of Bitcoin Cash users. To ensure the safety of your paper wallet, laminate it after printing it and then store it in a secure place. Additionally, you should only print out paper wallets on printers that you own. Using a shared printer at a library or computer store is a poor idea because many printers store image files of anything that they print, and if someone else finds an image file of your paper wallet, they can make off with your Bitcoin Cash.
8. If software wallets are less secure than hardware wallets, why does anyone use them? These two types of wallets serve different purposes. Hardware wallets are a poor choice for those who need to make frequent transactions because they need to be physically connected to a computer or other device in order to be used. In addition to this, you run the risk of losing all your Bitcoin Cash if your hardware wallet is damaged or lost. Hardware wallets are a good choice for those interested in long-term storage of Bitcoin Cash and don’t need to make frequent transactions. Software wallets are ideal for those who want to buy and sell Bitcoin Cash and use it to make transactions without having to jump through hoops. You will likely end up using both hardware and software wallets for different purposes as part of your Bitcoin Cash usage.
9. Are software wallets safe? There is no such thing as a computer system that is 100 percent safe. Any server or computer can be hacked with sufficient time, expertise, and resources. However, many popular wallet programs and devices have reduced the risk of hacking considerably through the use of security features such as PIN codes, passphrases, mnemonic seeds, email verification, two-factor authentication, and the like. Some software wallets also use redundant backups in order to protect your Bitcoin Cash against server errors, while others further safeguard their users’ cryptocurrency through the use of “cold” storage in the form of hardware wallets. All of these features make it extremely unlikely that your Bitcoin Cash will be stolen or hacked. When you are looking for a software wallet, you should check out its security features before you make the plunge.
10. Is it safe to keep Bitcoin Cash on exchanges? It depends on the exchange. Some users are suspicious of using exchanges to store their Bitcoin Cash due to the risk of leaks and hacking. However, many popular cryptocurrency exchanges, such as Coinbase, are now fully compliant with U.S. and international finance law, featuring bank-grade security and privacy functions. This legal compliance also allows users the option of legal redress if their funds are stolen or lost. These enhancements on the part of exchanges make large-scale failures and thefts unlikely to occur in the future. Despite this, you should always review an exchange carefully before you choose to use it to store your Bitcoin Cash.
If you are looking to use Bitcoin Cash, you need a Bitcoin Cash wallet. Which type of wallet depends on your needs and goals.
If your plan is to hold Bitcoin Cash for the long haul and protect it from thieves and hackers, you’ll want to go for the unparalleled security of a hardware wallet. You can’t get more safe and secure than a device that is only connected to the Bitcoin Cash blockchain when you choose to connect it. On the other hand, if you want to use Bitcoin Cash to make purchases and trade with it, you’ll need a software wallet that can be easily accessed from your computer or mobile device.
Choosing a Bitcoin Cash wallet is important because too many users have lost their funds due to carelessness, hacking, theft, and security holes. You want to use a wallet that will keep your funds safe for years to come.
There are many different types of Bitcoin Cash wallets available on the Internet, each designed for a different type of user. Casual traders, HODLers, merchants, and other types of users can all find wallets that are tailored for them specifically. No single wallet will serve everyone’s needs, so it’s your job to find a wallet that will work for you and help you accomplish your goals.
Whether you are planning to hold Bitcoin Cash as an investment for the future, buy and sell things with it, or trade it on the open market, you can find a Bitcoin Cash wallet that is perfect for you.
Ranking the best Litecoin wallets of 2020
If you are planning to use Litecoin, the first thing you need is a Litecoin wallet.
In order to use any cryptocurrency, you need a wallet, which is a digital file that can hold an unlimited amount of cryptocurrency. You need a wallet in order to stash your Litecoin and send/receive more.
All Litecoin wallets have a wallet address, which is a unique identifier on the Litecoin blockchain that consists of a random series of numbers and letters. If you want to send Litecoin to another user, you need to know that person’s wallet address, while the reverse is true if another user wants to send you Litecoin.
All cryptocurrency wallets, including Litecoin wallets, are separated into hardware and software wallets. Hardware wallets are physical devices similar to USB drives that are used to store Litecoin, while software wallets are digital files accessible from a computer, tablet, smartphone, or other device.
Here’s our rundown of the best Litecoin wallets available today.
LiteAddress.org is a website that generates paper wallets, a low-tech and easy way of securing your Litecoin.
A paper wallet is a wallet consisting of a QR code printed on a piece of paper. You simply generate a paper wallet using LiteAddress.org, transfer your funds to it, then print it out. You are advised to laminate it and stick it in a safe place so it doesn’t get lost.
One of the advantages of a paper wallet is that it provides a maximum of security with a minimum of effort. Paper wallets are impossible to hack since they are just pieces of paper. Anyone can print one out and use one, so the learning curve with a paper wallet is nonexistent.
However, paper wallets are difficult to retrieve funds from. Additionally, if you lose your paper wallet or damage it, your funds will be lost forever.
Paper wallets lack the versatility of other types of wallets, but are still a good choice if you just want to store Litecoin without worrying about frills or features.
Electrum-LTC is a software wallet similar in design to Litecoin Core, but with a number of core changes.
While Electrum-LTC is a desktop application similar to Litecoin Core, unlike that wallet, it doesn’t require you to download the Litecoin blockchain or synchronize prior to use. This makes it much easier and more convenient to use.
Like other software wallets, Electrum-LTC boasts a 12-word seed key security system. It is also SegWit-enabled and has an added feature allowing you to “freeze” addresses. You cannot send funds from any address that is “frozen,” making it good for privacy-focused users.
Electrum-LTC is not available for mobile devices and, similarly to Litecoin Core, lacks many features that newer wallets have. However, it’s a good choice for Litecoin-centric users.
LiteWallet is a mobile-only software wallet developed by Charlie Lee, the creator of Litecoin.
Litecoin is distinguished by its integration with Coinbase, one of the few software wallets that boasts this functionality. If you have a Coinbase account, you can connect it to your LiteWallet app, purchase Litecoin, and automatically transfer it to LiteWallet.
In addition to this, LiteWallet boasts a number of security features, including private keys and recovery passphrases.
LiteWallet is only available for mobile devices and lacks many of the frills of other software wallets. However, mobile users who are interested in buying and holding Litecoin should give it a look.
Litecoin Core is the official Litecoin wallet, a software wallet that is ideal for those who are looking for easy storage and aren’t interested in frills.
The Litecoin Core wallet is available for desktop users only and stores your Litecoin locally on your computer, meaning it is up to you to safeguard your wallet files and back them up. Litecoin Core, like other cryptocurrency wallets, generates private keys for security.
One major downside is that before you can use it, Litecoin Core must synchronize with the Litecoin blockchain. This can take several days depending on how fast your Internet connection is, and it also requires you to keep the Litecoin Core application open; if you close it or shut off your computer, you will have to synchronize again when you open the wallet back up.
While not as feature-rich as other wallets, Litecoin Core offers a good deal of security and is best for those who want to get set up with a minimum of busywork.
Jaxx is a mobile-focused software wallet noted for its accessibility to newcomers.
In addition to Litecoin, Jaxx supports several other cryptocurrencies. It also has an exchange system built in, allowing users to directly trade cryptocurrency without the use of an external exchange.
For security purposes, Jaxx uses a 12-word backup seed that allows users to restore their account at any time. Jaxx also gives users control over their private keys and allows them to be exported at any time, which stands in contrast to some software wallets that don’t give users access to their own keys.
Jaxx is available for both desktop and mobile devices and is ideal for newbies who want to store and use Litecoin without jumping through too many hoops.
Exodus is a multi-currency software wallet that boasts an inbuilt portfolio system, strong security features, and a clean interface.
Unique among software wallets, Exodus has a built-in portfolio feature that allows you to track the value of your Litecoin and other holdings over time. Much like Atomic Wallet, Exodus also has a built-in decentralized exchange, allowing you to directly exchange one cryptocurrency for another without having to use a middleman.
Exodus is noted for its clean, intuitive interface and its security features, which include a one-click recovery system, allowing you to restore your wallet with a 12-word recovery phrase. Exodus is also usable on desktop and mobile devices.
Exodus comes highly recommended for users who wish to track the value of their Litecoin holdings easily and securely.
Atomic Wallet is a non-custodial software wallet known for its clean interface, security features, and ease of use.
Atomic Wallet supports over 300 different cryptocurrencies, including Litecoin. Its most distinguishing feature is its decentralized exchange system. Atomic Wallet users can directly exchange cryptocurrencies using a peer-to-peer system in the app, as well as buy Litecoin and other currencies with a debit or credit card.
In addition to this, Atomic Wallet boasts a mnemonic seed security system, encrypting your private keys and preventing them from being hacked. Private keys are tied to the device on which you install Atomic Wallet and do not leave it.
Atomic Wallet is available for desktop and mobile devices and is a strong choice for users who are looking for a combination of flexibility and security.
Trezor is a hardware wallet known for having some of the best security features on the market, as well as for being one of the oldest hardware wallet models still around today.
Trezor supports several other cryptocurrencies aside from Litecoin, including Bitcoin and Ethereum, though it does not support as many different coins as the Ledger Nano S. It also has an LED screen that allows you to check your balance and guard against theft, as all transactions need to be manually confirmed using the screen.
The Trezor wallet also features a 24-word recovery seed, allowing you to regain access to your funds in the event that your wallet is damaged or lost.
Trezor devices are slightly cheaper than Ledger devices, making them a good choice for those who want a less expensive hardware wallet but don’t want to compromise on security.
The Ledger Nano S is one of the most popular hardware wallets in the world and is famed for its ease of use, security features, accessibility, and pricing.
A multi-currency wallet, the Ledger Nano S supports Bitcoin, Ethereum, and many other cryptocurrencies in addition to Litecoin. It includes a built-in LED screen, allowing you to check your balance without having to use a computer, and it also includes a PIN code feature that allows you to secure your wallet against theft.
In addition to this, the Ledger Nano S has a backup seed key, which will allow you to regain access to your funds in the event your wallet is damaged or stolen.
As a final bonus, the Ledger Nano S is compatible with many popular software wallet apps, allowing you to easily transfer money between them if you wish to make purposes.
The Ledger Nano S is priced modestly, putting it within the reach of most people. If you want a wallet that will keep your Litecoin secure while also making it easy to access, the Ledger Nano S is the way to go.
1. What is a Litecoin wallet? A Litecoin wallet is a digital file that is used to store Litecoin. Wallets can hold an unlimited amount of Litecoin and are classified into two types: hardware wallets and software wallets.
2. Why do I need a Litecoin wallet? Wallets are the sole means by which Litecoin can be stored, sent, or received. All Litecoin in the world is held in a wallet of some kind.
3. How do Litecoin wallets work? All Litecoin wallets have a wallet address that identifies them on the Litecoin blockchain. Litecoin wallet addresses appear as a series of random letters and numbers, though they can also be rendered as QR codes, allowing you to scan them with a mobile device for ease of use. If you want to send Litecoin to another user, you need to know that person’s wallet address, and vice versa if someone else wishes to send you Litecoin. To send Litecoin, you enter the desired amount and wallet address of the recipient using your wallet app. As an alternative, you can do this instantly using QR codes.
4. What separates hardware and software wallets? A hardware wallet is a physical device on which Litecoin is stored. Hardware wallets are designed similarly to USB pen drives and can be similarly connected to a computer or other device to access the funds on them. Software wallets are apps, programs, or websites on which Litecoin is stored. Hardware and software wallets are separated by their ease of use and security features. Hardware wallets are generally more secure than software wallets since they are physically disconnected from the Internet until you choose to plug them in, keeping their contents safe from hackers and exploits. However, software wallets are better for those who use their Litecoin to make purchases because they don’t require you to connect a physical device in order to access your funds. Most Litecoin users use hardware and software wallets together to perform different functions, with hardware wallets used for long-term, secure storage and the latter used for quick transactions. Depending on how you are planning to use Litecoin, you will likely need to use different wallets for different functions.
5. What is the difference between “hot” and “cold” storage? “Hot” storage is a wallet that is always connected to the Litecoin blockchain. “Cold” storage refers to wallets that are only connected to the blockchain when the user chooses to connect them. All hardware wallets are “cold” storage because they are physically separated from the blockchain except when the user chooses to connect them. In contrast, software wallets are typically “hot” because they are always connected to the Internet.
6. What is a paper wallet? A paper wallet is a type of hardware wallet that is printed on a piece of paper. Paper wallets were originally used for Bitcoin, but were quickly adopted to work with Litecoin as well due to Litecoin’s similarities to Bitcoin. To create a paper wallet, you simply use a paper wallet generator to create a wallet and private keys, transfer your Litecoin to it, and then print it out onto a piece of paper. This low-tech method of storing Litecoin is favored by some users because of its incredible security. Unlike “normal” hardware wallets, paper wallets cannot be hacked, making them secure against external threats. They also do not need to be configured in any way; once you have printed out your paper wallet, you’re finished and can safely store it without having to learn how to use an app or hardware device. However, paper wallets are insecure in another way; if you lose your paper wallet or damage it, your funds are lost forever. Paper wallets are also extremely difficult to transfer funds to and from after they are printed. It is for this reason that more technologically advanced hardware wallets have been developed. However, paper wallets remain popular among a core of Litecoin users. For best practices when using paper wallets, laminate your wallet after creation and store it in a secure location. Additionally, do not print your wallet out on a shared printer (such as one at a library or computer store), because many printers store image files when printing something, and if someone else gains access to an image file of your paper wallet, they can steal all your funds.
7. If software wallets are less secure than hardware wallets, why does anyone use them? Hardware and software wallets serve different purposes. Hardware wallets are more effort to use than software wallets because they must be physically connected to a computer or other device in order to be used. This makes hardware wallets a bad choice for those who want to make frequent transactions. Additionally, the fact that hardware wallets are physical objects means that they can be damaged or lost, running the risk that any Litecoin stored on them will be lost as well. Hardware wallets are ideal for those who want to store their Litecoin securely and are not planning on using it for transactions, while software wallets are ideal for those who want to buy and sell Litecoin with a minimum of hassle. It is likely you will end up utilizing both hardware and software wallets for different purposes as part of your cryptocurrency usage.
8. Are software wallets safe? No computer system in the world is 100 percent safe; any server or computer can be hacked if a hacker has the time and resources. However, many popular wallets have reduced the risk of hacks to near-zero through the use of security measures such as mnemonic seeds, passphrases, PIN codes, email verification, two-factor authentication, and more. Another way software wallets keep your Litecoin safe is by making redundant backups to guard against server malfunctions. Some software wallets even augment their security through the use of “cold” storage in the form of hardware wallets. These features make the likelihood of your funds being stolen or hacked close to zero. When selecting a software wallet, investigate its security features before you entrust it with your Litecoin.
9. Is it safe to keep Litecoin on exchanges? The answer to this question depends on the exchange. Some people are wary of using exchanges to store cryptocurrency due to hacks and leaks. However, many leading cryptocurrency exchanges are now fully compliant under U.S. and international law, using bank-grade security features and standard privacy functions such as two-factor authentication. Users also have the ability to seek legal restitution if their funds are stolen or hacked. This makes large-scale collapses, such as the type suffered by Bitcoin exchange Mt. Gox in 2014, extremely unlikely in the future. Having said this, you should always look into an exchange carefully before you trust it with your Litecoin.
If you are planning to use Litecoin, you need a Litecoin wallet. No matter what you are planning to use Litecoin for, a wallet is necessary, though what type of wallet you need depends on what you are planning to use Litecoin for.
If you want to simply hold Litecoin for an indefinite period and guard it against thieves and hackers, you want to use a hardware wallet because their security is unparalleled. You can’t get more secure than a device that physically keeps your Litecoin off the Internet and in your personal possession. However, if you’re planning on trading Litecoin or using it to make purchases, you’ll want to select a software wallet that you can access from your desktop or mobile device so you can easily transfer funds.
Choosing a Litecoin wallet is important because too many users have lost Litecoin and other cryptocurrencies to a number of factors, including hacking, theft, poor security, scams, or their own carelessness. You want to select a wallet that will not only protect your Litecoin in the present, but keep it safe for the future.
Another factor to consider is privacy. If you want to keep your Litecoin transactions away from the public eye, you’ll want to select a wallet that comes with anonymity and privacy features. Many Litecoin wallets allow users to exchange currency without providing any personal details, which keeps your financial activity away from the public sphere.
There are countless Litecoin wallets available on the Internet, and each of them are designed with a specific user in mind. Day traders, casual traders, HODLers, and merchants all have wallets designed to meet their needs. No single wallet can be all things to all users, so it’s up to you to do your research before you commit to a particular wallet.
Before you choose a Litecoin wallet, you’ll want to figure out what you are planning to use Litecoin for and what you need to accomplish your goals. Whether you are planning to buy and sell things with Litecoin, day trade it for quick gains, or simply hold onto it for the future, you can find a Litecoin wallet that will be able to help you.
Ranking the best Ethereum wallets of 2020
If you are interested in using Ethereum, you need to know about Ethereum wallets.
All cryptocurrencies require wallets, which are digital files that can hold an infinite amount of cryptocurrency. You need a wallet in order to store Ether, send it to other users, and receive it.
Every Ethereum wallet has a unique wallet address, which is a series of letters and numbers that identify it on the Ethereum blockchain. If you want to receive Ether, you need to give your wallet address to the person who is sending it to you; the reverse applies if you want to send Ether.
Ethereum wallets, like all cryptocurrency wallets, are separated into hardware wallets and software wallets. Software wallets are digital programs that can be accessed from your computer or smartphone, while hardware wallets are physical devices.
Here’s our rundown of the best Ethereum wallets on the web today.
KeepKey is a hardware wallet noted for its security features.
The KeepKey wallet is distinguished by its PIN system, which must be entered using the keypad on the device in order for transactions to be approved. This prevents hackers from tampering with the device, since all transactions need to be physically confirmed using the device.
KeepKey is more expensive than other hardware wallets and its bulky, plastic frame make it more prone to damage if dropped. However, it is still a quality hardware wallet.
MyEtherWallet is an open-source software wallet that is popular among Ethereum enthusiasts due to its ease of use.
MyEtherWallet does not require personal info to be used and is distinguished by its private key functionality. Additionally, MyEtherWallet allows users to directly create and access smart contracts, a key aspect of Ethereum’s appeal to users.
In addition to this, MyEtherWallet allows users to directly exchange Ethereum and Bitcoin. It is also integrated with Ledger and Trezor hardware wallets, making moving money incredibly easy.
MyEtherWallet is not as feature-rich as some other software wallets, but its smart contract functionality, compatibility with hardware wallets, and open-source nature make it appealing as an option.
Coinbase is a cryptocurrency exchange that is widely recognized as one of the most trustworthy and intuitive in the world.
Fully regulated by U.S. and international finance laws, Coinbase boasts bank-grade security for storing and trading Ethereum. It allows users to purchase Ether and a number of other cryptocurrencies using bank transfers or debit/credit cards, and it also features “vaults,” specialized cryptocurrency wallets with added security measures.
In addition to this, Coinbase features a robust mobile app in addition to a web interface.
Overall, Coinbase is a good choice for both holding Ether and buying and selling it.
MetaMask is a software wallet designed for those who want to use decentralized Ethereum apps.
Unlike other software wallets, MetaMask functions similarly to an Internet browser, allowing you to not only send and store Ether, but search for decentralized apps to install. This is a good option for those who are looking to use Ethereum for software usage and development.
MetaMask boasts password-encrypted private keys, securing your Ether from hackers and making accessing your funds a cinch.
While MetaMask’s specialized design may be off-putting to more casual users, it’s a strong choice for those who are looking to download, install, and develop decentralized apps.
One of the world’s first multicurrency crypto software wallets, Exodus is a flexible platform for storing, buying, and selling Ethereum.
Exodus’ most notable feature is a built-in peer-to-peer exchange system, which allows you to buy and sell cryptocurrency without using a separate exchange such as Coinbase. It also offers an attractive user interface with price charts, allowing you to track the value of your Ether over time.
Exodus supports a large number of cryptocurrencies and is noted for its tight security protocols. It also does not require an email to use. One downside to Exodus is that it requires an Internet connection to use.
While it can be unwieldy for some users, Exodus is a strong option for those looking for an all-in-one wallet, portfolio system, and cryptocurrency exchange.
Jaxx is an Ethereum software wallet designed for accessibility and usability.
Jaxx supports several different cryptocurrencies, including Ethereum and Bitcoin, and is noted for its secure private keys, which are fixed to your mobile device. Jaxx offers seed keys to allow you to restore your account from another device.
In addition to this, Jaxx is an anonymous wallet that does not require you to input any personal information in order to use it. This makes it ideal for those who put a premium on privacy online. Jaxx is available for Windows, Mac OS X, Linux, iOS, and Android.
For privacy-concerned users, Jaxx is an extremely strong option.
Argent is a software Ethereum wallet noted for its top-of-the-line features and mobile functionality.
Designed for mobile use, Argent is distinguished by its integration with Compound.Finance, a service that allows you to earn interest on your Ether by lending it out. It also features a built-in DApp (decentralized app) browser, allowing you to download and install apps that are powered by the Ethereum network.
Argent is also noted for its ease of use, tying your wallet to your email address and phone number and allowing you to recover your account with either.
While not as feature-rich as some other software wallets, Argent’s simple interface make it a good choice for newbie investors, while its integrations make it a solid choice for those who want to earn interest or use apps.
Atomic Wallet is an all-in-one software wallet and exchange that makes storing Ether, as well as buying and selling it, extremely easy.
Unique among software wallets, Atomic Wallet has a built-in exchange system that allows you to purchase and sell Ether using a debit or credit card. Atomic Wallet touts its coming Atomic Swap system, which will allow users to directly exchange cryptocurrencies without relying on a middleman.
In addition to this, Atomic Wallet uses private keys for security, encrypting them on your device in order to protect your funds against hackers.
Atomic Wallet is easily the best choice for those who are interested in storing and buying Ether without having to jump through many hoops.
Guarda is a software wallet that is compatible with Ethereum, Bitcoin, and a number of other cryptocurrencies.
Available for desktop computers as well as mobile devices, Guarda protects your Ether through the use of a private key. No one can access your wallet without using the private key, making it highly secure. Guarda is also noted for its privacy features; no personal information is required to use the service. This makes it a good choice for those who want to keep their Ethereum activities secret.
While Guarda’s interface can be wieldy for first-time crypto users, its surfeit of features make it a powerful choice for those who are looking for a good software wallet.
Trezor is one of the leading hardware wallet manufacturers, and the Trezor hardware wallet is noted for its affordability and usability.
Originally designed for use with Bitcoin, Trezor hardware wallets are now compatible with Ethereum, including all non-Ether tokens. Trezor wallets store Ether in a secure computer chip that can only be accessed with a password, insulating your money against hackers.
The Trezor wallet is lightweight, making it easy to store and carry, and also comes in a number of different colors. It is also modestly priced compared to other hardware wallets.
Overall, the Trezor hardware wallet is a good choice due to its reliability, price, and security features.
The Ledger Nano S is a budget version of the Ledger Nano X, great for those looking for an inexpensive hardware wallet without sacrificing security and usability.
One of the Ledger Nano S’ best functions is its LED screen, which allows you to use your Ether directly without having to plug the device into a computer. This feature safeguards your currency against hackers, since all operations involving the Ledger Nano S must be confirmed by physically using the device.
In addition to this feature, it boasts many of the same features as the Ledger Nano X, including support for all Ethereum tokens as well as support for non-Ethereum cryptocurrencies.
The low price of the Ledger Nano S makes it a strong choice for consumers who are looking to save money while still keeping their Ether secure.
Ledger is one of the world leaders in hardware wallets, and their Ledger Nano X model is easily their best in terms of security, flexibility, and technological advancement.
The Ledger Nano X is a hardware wallet that integrates with many popular software wallets and exchanges, allowing you to easily move money between your wallet and the wider blockchain. This model includes a longer-lasting battery as well as Bluetooth functionality, making it easier to manage your funds.
In addition to supporting Ether itself, the Ledger Nano X is compatible with all Ethereum-based tokens and also supports many other cryptocurrencies, such as Bitcoin. This makes it a handy way to keep all of your crypto investments secure.
Further adding to its value, the Ledger Nano X is modestly priced and comes with free firmware upgrades for life.
Overall, the Ledger Nano X is the best hardware wallet for those concerned about keeping their Ethereum investments safe.
1. What is an Ethereum wallet? An Ethereum wallet is a digital file that is used to store an infinite amount of Ether, Ethereum’s base token. Ethereum wallets are classified into two types: software wallets and hardware wallets.
2. Why do I need an Ethereum wallet? Wallets are the only means by which you can send, receive, or store Ether. All Ether in existence is held in a wallet.
3. How does an Ethereum wallet work? All Ethereum wallets have a wallet address, which identifies the wallet on the Ethereum blockchain. Ethereum wallet addresses are rendered as a string of random letters and numbers, though they can also be generated as QR codes, allowing them to be scanned by a tablet or smartphone for easier use. If you want to send Ether to another user, you must have that person’s wallet address; the reverse is true if someone wants to send you Ether. To send Ether, you enter the desired amount and the wallet address of whoever you are sending it to. If you use QR codes, this can be done instantly.
4. What is the difference between software and hardware wallets? Software wallets are websites or apps that store Ether on your computer, mobile device, or on the Internet. Hardware wallets are physical devices that you download your Ether onto in a fashion similar to a USB drive. The primary difference between hardware and software wallets is convenience and security. Hardware wallets are the safest way to store your Ether because they are only connected to the blockchain when you physically plug them into your computer or other device, minimizing the chances that your money will be swiped by hackers. Software wallets, on the other hand, are better for making transactions since they don’t require you to plug in a physical device. Many Ethereum users will use hardware and software wallets in combination, using the former for long-term storage and the latter for making transactions, so you will likely find yourself using multiple wallets depending on what you are looking to do.
5. What is the difference between “hot” and “cold” storage? A “hot” wallet is a wallet that is always connected to the Ethereum blockchain, while a “cold” wallet is only connected to the blockchain when the user chooses to connect it. All hardware wallets are “cold” because they are disconnected from the blockchain and the Internet until the user chooses to connect them, while most software wallets are “hot” because they are always connected online.
6. If hardware wallets are safer than software wallets, why doesn’t everyone use them exclusively? Hardware wallets are more cumbersome than software wallets because, as noted above, they must be physically plugged in in order to be used. If you are planning to use Ether to make purchases, hardware wallets add an additional step that may be inconvenient. Adding to this, the fact that hardware wallets are physical objects means that they can be lost or damaged, and if this happens, any Ether stored on them is lost forever. Hardware wallets are best for those who wish to store their Ether and are not planning on making many transactions with it, while software wallets are ideal for those who wish to buy and sell Ether without having any delays or difficulties.
7. Are software wallets safe? There is no computer system in the world that is 100 percent safe; any computer can be hacked given enough time and resources. Having said this, most popular wallets have security measures in place designed to make hacking difficult to near-impossible. These include passphrases, mnemonic seeds, private keys, PIN codes, two-factor authentication, email verification, and a host of other features. Many software wallets will also make redundant backups as insurance against server failures, while hardware wallets are often used in tandem with some software wallets for added protection. These features greatly reduce the chances that your Ether will be stolen or hacked. When looking for a software wallet, you should examine its security features carefully before entrusting it with your money.
8. Is it safe to keep Ether on exchanges? Many veteran Bitcoin users will remember the collapse of Mt. Gox, one of the first Bitcoin exchanges and the largest by volume until it closed operations in 2014. The fall of Mt. Gox resulted in the theft of 850,000 Bitcoins, worth roughly $450 million at the time. Since that time, cryptocurrency exchanges have become more secure, adding additional security features and also becoming compliant with national and international finance laws. Major Ethereum exchanges such as Coinbase are officially sanctioned by the U.S. government and other governments, giving users legal recourse in the event of theft and hacking. This makes a collapse on the scale of Mt. Gox unlikely to occur in the future. Having said this, you should always do your research on an exchange before entrusting it with your money.
9. What is an ERC-20 token and are Ethereum wallets compatible with them? ERC-20 tokens are non-Ether tokens that use the Ethereum blockchain as a base. Ethereum is unique in that it allows users to create their own tokens, which many have done in order to accomplish things that are not possible with the existing Ether token. Many popular cryptocurrencies such as CHAINLINK either operate as ERC-20 tokens or began on the Ethereum network before moving to their own blockchains. Most standard Ethereum wallets are also compatible with ERC-20 tokens due to the fact that they utilize the same technology. Having said this, you should ensure that your chosen wallet is compatible with the ERC-20 token you want to store, as things may change in the future. Wallets that are compatible with ERC-20 tokens will typically have separate wallets for these tokens in order to keep the tokens separate from any Ether that may also be in the wallet.
10. What is a decentralized app (DApp)? A decentralized app is a program that uses the Ethereum network to operate. Ethereum’s nature as an all-in-one computing platform has made it an attractive option for software developers who wish to create apps that are not possible using traditional programming methods. Many Ethereum wallets allow users to access and download DApps, making the process of getting them considerably easier. Some wallets also allow users to develop apps, making them an attractive option for programmers.
If you want to buy, sell, trade, or hold Ether, you need an Ethereum wallet. Which kind of wallet you need depends on what you want to use Ether for.
If your plan is to hold Ether and protect it from thieves and hackers, you’ll want to get a hardware wallet because you’ll be able to keep it off the Ethereum blockchain and in your physical possession. If you’re planning on using Ether to buy things, you’ll need a software wallet so you can easily connect to the blockchain using your computer, smartphone, or tablet.
Choosing an Ethereum wallet is important because countless users have lost Ether and other cryptocurrencies due to hacking, poor security, or their own lack of precaution. You want to use a wallet that will keep your investments safe in the face of threats not only in the present, but in the future as well.
If you are interested in keeping your Ethereum activity private, you’ll also want to select a wallet that will offer you anonymity and privacy options. Many Ethereum wallets allow users to trade without providing personal information, keeping your transactions private and personal.
There are many different types of Ethereum wallets available, each designed with a certain type of user in mind, whether they are day traders, HODLers, casual traders, or people who want to use Ether to buy and sell things. No one wallet can offer everything to everyone, so it’s up to you to determine your needs before you entrust your money to a particular wallet.
Before you choose an Ethereum wallet (particularly a hardware wallet), you’ll want to determine what your goals are with Ethereum and what you need to achieve them. No matter whether you are planning to buy and sell things with Ether, trade it to make money, or simply hold on to it for the foreseeable future, you can find an Ethereum wallet that will give you the features and security that you seek.
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