Best Crypto Wallets for 2018: A Complete Guide
In order to trade cryptocurrencies, you need a wallet. Much like how wallets work in real-life storing physical monies, a cryptocurrency wallet makes it possible to send and receive funds online.
There are some obvious advantages to having a digital wallet. Such as being able to see your balance at a glance, see your recent transactions, manage several different currencies, and of course - you’ll never have to turn your house upside down looking for it!
There are a couple of drawbacks, although it largely comes down to personal preference. The main concerns are how secure and easy to use they are, and working through all the technical aspects to find the right wallet for you needs.
Which is why I’ve covered all the different types of cryptocurrency wallets in this article so you know what your options are.
I’ve highlighted the pros and cons of each type of wallet, done my best to explain all the different terminologies you’ll come across, and narrowed down the field to make it easier to choose the right wallet for you.
I’ve also included some other handy information on how crypto wallets work, ways you can make the most of your wallet, and how to get started trading cryptocurrencies.
I think I’ve covered everything a beginner or experienced trader will need to know. Just drop me a note or a mail if you have any questions or think I’ve missed anything, thanks.
How Do Cryptocurrency Wallets Work?
Cryptocurrency wallets are called ‘’wallets’’ because much like a physical leather wallet, you need them to access your funds and make transfers.
They don’t actually store your currency however. This is the main distinction between a real life-wallet and a crypto wallet and is often a point of confusion for new traders.
What you need to get to grips with is that cryptocurrencies aren’t actually stored anywhere. All the transactions are written to what’s called the blockchain, and it’s these records that balance the funds as I will explain in more detail later.
Crypto wallets are used to store your private and public keys, and it’s these keys that you need to make transactions with the blockchain.
For example, to send some coin to another person you need their wallet’s address, and the private and public keys need to match on both sides of the trade to sign off on the transaction.
The funds are then unlocked to you and the balance in your wallet updates. But your coin is not stored in the wallet itself.
How Secure Are Cryptocurrency Wallets?
You’re right to be concerned about security, after all we’re talking about money that’s based online and I’m sure you’ve heard about hacking incidents and people losing their money.
Incidents of hacking are rare however, and if you follow the right procedures and take the necessary care to keep your currency secure you’ll be fine.
The different types of wallet offer different levels of security, so you can choose the wallet based on how secure it is if this is your primary concern.
I cover the different types of wallet and how secure they are below. Here are some additional tips to be aware of to maximize how secure your wallet is:
Keep Your Software Up To Date
As with most software, updates will fix issues and patch potential security issues. Keep your software up-to-date to maximize the security.
Use Cold Storage
You don’t need to keep all your currency in your wallet online. Store any currency you aren’t going to be trading with in a cold storage device offline where it’s more secure.
Use a Different Browser for Your Wallet
Browser malware is one of the main ways hackers gain access to PC’s remotely. It’s good practice to use a seperate browser when accessing your wallet from your general online activities. Mist or Metamask is a good option.
Think about ways you can make your wallet even more secure. Such as adding a long, complex password to access your wallet, adding password notifications when withdrawals are made, and additional pin codes.
What Types of Wallets Are There and Which Is Best for You?
There are a few different types of wallet, each with their own pros and cons. Here are the different types of wallet and how they work, take a moment to consider which will work best for you:
Most applications are cloud-based nowadays, so it’s not unusual for people to use wallets stored on the cloud.
The main benefit of using a wallet stored online is that you can access it anywhere as long as you have a device and an internet connection.
This also means that your private keys are stored online and managed by a third party. So, although incidents with trusted companies are rare they do present a higher risk than keeping your keys locally.
If security is your main concern I recommend using a desktop wallet. This method means you are downloading the software to your PC and storing all of the data locally.
You can only access your wallet when you’re at your PC, which is an obvious limitation if your travel a lot.
But the major upside is that it’s very secure. The only possible breach is through your PC being hacked but you can still safeguard yourself against this with passwords and backups.
Hardware wallets are also very secure, and you have the added benefit of being able to carry them with you so you can plug in and use at any computer.
They are basically like USB drives, and you’ll have your private keys stored on them. This means your information is stored offline so you can only make transactions when you log in and connect to the internet.
Mobile App Wallets
Mobile app wallets are really popular. Let’s be honest, the one thing we all have close to hand at all times is our phones so it’s the most convenient way to access your wallet.
They have decent security and are quick and easy to access wherever you have mobile network or WiFi, but some are limited in the features they offer so check the app can do everything you need.
Paper wallets are called so because some people will print out a paper copy of their private keys and keep it somewhere safe in the home.
It’s also a term referring the software used to generate private keys. This will often mean generating and printing a QR code to make scanning and transferring funds quicker.
They are very secure due to your keys being kept offline on a physical piece of paper. So this is definitely a consideration for those who don’t trust having their data online.
The Difference Between Hot and Cold Wallets
You may have heard or seen the terms “hot wallets”, and “cold wallets” used to describe some wallets.
A hot wallet is any wallet that is connected to the internet. The main differences are that hot wallets are typically easy to use, can be accessed quickly, and most are free to use.
Cold wallets on the other hand are crypto wallets that are not connected to the internet. You can expect to pay anywhere up to a few hundred bucks for a cold wallet, but the main advantage is that they are a lot more secure.
Should You Use a Multi-Currency or Single Use Wallet?
Multi-currency wallets do exactly as their name suggests, they allow you to manage and trade multiple currencies with just one wallet.
It’s a consideration when choosing a wallet. If you choose a single use wallet you’re restricted to trading with one currency, but might find that a wallet designed for one currency is more user-friendly.
However, unless you’re 100% sure you’ll never want to trade with another currency I recommend using a multi-currency wallet.
It opens up the possibility to trade multi-currencies later on without having to get another wallet and go through setting it up.
Considerations When Choosing a Cryptocurrency Wallet
As with any software, hardware, or purchase, etc, you don’t just dive in and get the wallet you see advertised the most or one that looks like it’s on a good offer.
There are a few things to check off to make sure the wallet is going to do everything you need. Otherwise, what’s the point is having that particular wallet, right?
Here are some of the things I look at when evaluating wallets, either for myself or when reviewing them to help others with their decision.
All of which I covered in my reviews of the best crypto wallets below, but worth pointing out so you’re aware of some of the desirable features of crypto wallets:
Security - As I covered above, different wallets offer different levels of security. So, this is an area that’s worth doing your due diligence on if you want to sleep easy at night.
Ease-of-use - Even experienced traders want an easy to use wallet, trust me. A clean and easy to use interface means you save time and reduce the chance of making an error.
Price - Cold wallets are going to cost anywhere between a few bucks and several hundred. Value is the key word regardless of cost, the good news is the best wallets won’t break your bank as you’ll see below..
Reliability - In my experience crypto wallets are typically very reliable, but it’s always a good idea to read a good amount of customer feedback before buying a wallet. There is nothing worse than being let down by a product only to read it’s happened to others too.
Best Crypto Wallets
Trezor - Hardware Wallet
Trezor is one of the most well-known brands when it comes to crypto wallets. They launched the first Bitcoin hardware wallet and have built a strong reputation for being very secure and reliable.
Their hardware wallet is a small USB-like device that connects to a computer via a USB cable. This means you can securely store your keys offline, it has a backup feature, and you can add additional passwords for extra security.
One of the best features of the Trezor is its built-in screen. This enables the wallet to display your key information, password information, and other info so you don’t have to input everything directly into a computer.
This acts as another line of defence against having your information compromised. Additionally, you need to press buttons on the device to perform actions which puts a stop to hackers performing actions remotely.
You can set up the wallet online by following the instructions on their website, or there is an offline option via a Chrome extension.
All-in-all an incredibly secure hardware wallet that gives even the most paranoid users peace of mind. Just be sure to keep all your passwords safe, it’s so secure you can find yourself being locked out!
Nano S - Hardware Wallet
I’m not one to make decisions based on what a product looks like, I put all my stock in how well it does what it’s supposed to.
Some people do care however, so I’ll point out that the Nano S does look like a basic memory stick. But it delivers in the areas where it counts, functionality.
It has a built-in screen and physical buttons, so this is a huge plus for security. To make payments you need to press two buttons at the same time, so that puts a roadblock up against remote hacking.
You need to create a PIN code when setting the Nano S up, it stores your keys offline, you can create backups, and a secure password. So it ticks all the boxes for layers of security.
One of the best things about the Nano S is that it supports all the major cryptocurrencies, and a lot of lesser-known ones too.
It supports more currencies than its two main hardware competitors, the KeepKey and Trezor. So if multi-currency trading in on your agenda this is the hardware wallet for you.
The Nano S is manufactured by Ledger. You’ll need to download the Ledger Manager app to your PC, then you can install the software onto your Nano S from there.
KeepKey - Hardware Wallet
The KeepKey hardware wallet is one of the newer wallets to hit the market but its gained momentum quickly due to having great functionality, tight security, and a polished and modern look.
Unlike the Nano S, the KeepKey looks and feels like the modern digital device you’d expect from a hardware wallet. The first thing you notice is that it’s a lot larger than its competitors too, such as the Nano S and the Trezor.
The benefit to being bigger means more screen space, with the only real downside is that it doesn’t slip in your pocket and go unnoticed like the Trezor.
It has all the security features we’ve come to expect from a crypto wallet. It stores your keys offline, requires a PIN and uses randomization codes, you can backup the wallet with a 12-word process, and you can recover your device with KeepKey’s Chrome extension.
KeepKey currently only supports Bitcoin, Litecoin, Namecoin, Ethereum, Testnet, Dogecoin, and Dash. The manufacturer can add more to the software in the future however, so don’t write it off if you want to trade a coin that isn’t currently supported.
Overall I can’t fault the KeepKey. The team behind it have come in and designed a hardware wallet learning from where some of the other wallets fall short.
It’s largely going to come down to your own preference on the design and size of the wallet when comparing it to the other hardware wallets I’ve reviewed.
Coinbase - Hot Wallet
If you’ve been doing your research into getting started with cryptocurrencies or have experience trading you will have read plenty of articles pointing you in the direction of Coinbase as a starting point.
Coinbase is a brokerage, trading exchange, and they provide a hot wallet so you can do everything through their platform from buying, storing, and trading cryptocurrencies.
Being the largest online Bitcoin exchange has its advantages and disadvantages. Their platform is well-established and trusted, it’s easy to use, they offer more flexibility than just a hardware wallet, but there is that increased risk of being compromised.
You can access your wallet from anywhere you have an internet connection and your login details. Their iOS and Android apps are great for mobile usage, and they do offer a Multisignature Vault as some added security.
I’m one of those who always recommends Coinbase as a starting point. As you coins start to mount up however I recommend using a hardware wallet so you can store your keys offline and make backups.
Jaxx - Software Wallet
Jaxx is a multi-currency software wallet that currently supports seven different cryptocurrencies.
It’s an option if you want a software wallet to use on Windows, Linux, or a Mac. They also have Firefox and Chrome extensions, as well as iOS and Android apps.
So no excuses for not having a platform to install a Jaxx wallet on. Having tested most of the top software wallets I can say that Jaxx has designed one of the smoothest and smartly designed wallets.
It has some strong security features, such as automatic backups protected by a mnemonic seed, storing your keys on a user device, and of course secure passwords for entry.
One of the best aspects to using a Jaxx wallet is that i’ve only ever heard good things about their support team, and that’s what you want when dealing with issues - someone on the end of a chat or email ready and willing to help.
While I said Coinbase is best for beginners and I still stand by that, when picking the best crypto wallet I have to go with a hardware wallet.
The Trezor, Nano S, and KeepKey are all excellent hardware wallets and it’s hard to split them. There’s an argument for each of them based on certain criteria, and you might find either are ideal for you.
I’m going to give the Nano S the nod however. This is due to the Nano S having just a slight edge in most areas, so I guess you can call it the most well-rounded of the bunch.
It’s compatible with a wider range of coins than the other wallets, its security is top notch, it’s just the right size, the built-in screen is extremely helpful, and the software is easy to use intuitively for beginners.
For these reasons it’s great for beginners and experienced traders.
The future looks bright too. You have the software to handle multi-currencies should you choose to expand your portfolio down the line, and Ledger have a proactive team of developers keeping on top of security updates.