How to choose the best crypto wallet 2024

When you buy your first crypto asset, such as Bitcoin, you need to decide where to put it best crypto wallet. A crypto wallet acts not only as an ultra-secure digital vault, but also as the app you use to manage your cryptocurrencies and digital assets. The best crypto wallets enable you to send and receive crypto assets, trade between cryptos, discover new ways to use your crypto assets, get market updates and news, and even interact with smart contracts. In this guide we’ll take you through the key factors to consider when choosing a crypto wallet.

Security

It’s important that your wallet app have a first line of defense in the event your device falls into the wrong hands. This means your wallet should, by default, require that you unlock it every time you want to use it. Unlocking by PIN is acceptable, but can be inconvenient if you’re using your wallet regularly. The Bitcoin.com Wallet integrates facial or fingerprint recognition, making access a breeze while maintaining the highest level of security.

Reputation

The reputation of the wallet maker is one of the most important factors because it’s entirely possible for a wallet to have built-in security flaws (whether by design or by accident) that put your crypto assets at risk. To check that the wallet is on the up and up, search for it on forums such as the Cryptocurrency Reddit or the Bitcoin.com Forum to see what people are saying about it.

What is Crypto wallet?

On a practical level, a crypto wallet is a device or program that is used to send and receive cryptocurrencies and digital assets. The term wallet can be a little confusing for people new to crypto. A physical wallet is used to store physical currency, however a crypto wallet does not store crypto assets within it. How can this work?

Well, most people already have something similar to this in their physical wallets right now: a debit card. The debit card in your wallet is not money, but it does grant you access to your money. This is similar to how a crypto wallet works, with a key difference being that while a debit card is controlled by a centralized entity (a bank), no person or organization controls crypto. This difference means that crypto wallets must function somewhat differently than bank accounts

How Crypto wallet work

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As you can see, this secret number is extremely unwieldy. One of the key functions of a crypto wallet is to manage the private key.best crypto wallet In fact, private keys are almost never handled directly by people. Crypto wallets provide a way to write down this private key in a much more human readable format, referred to as a recovery phrase, secret passphrase, or seed phrase. A recovery phrase is a list of words, usually between 12 and 24, that allow you to reconstruct your crypto wallet and gain access to your funds even if your crypto wallet is destroyed. Here is an example of a recovery phrase consisting of 12 words:

Because the recovery phrase is equivalent to a private key, you should never share the words with anyone, or store the plain text on your computer or online.

While the recovery phrase is an improvement upon the private key, it still leaves a lot to be desired. Since you shouldn’t store your recovery phrase in plain text (unencrypted form) on your computer, for most people the best solution is to write it down on paper. This presents problems because safely storing a piece of paper can be hard. Further, if you’re using a multi-coin wallet (like the Bitcoin.com Wallet app),

you’ll have a separate recovery phrase for every different blockchain your wallet supports. Storing all those recovery phrases on paper quickly becomes onerous. For this reason, the Bitcoin.com Wallet integrates a “Cloud Backup” system. Here you can create a single custom password and use it to unlock all of your private keys, which are stored in encrypted form in your Google or iCloud account.best crypto wallet

To set up Cloud Backup in the Bitcoin.com Wallet app, just go to Settings > Backup & Security > Cloud Backup and follow the instructions.best crypto wallet

Types of wallet

There are two main types of wallets: hardware wallets and software wallets.

Hardware wallets are the most secure type of crypto wallet because their private keys are stored on a physical device and theoretically cannot be accessed by a computer or from the internet. When a person wishes to make a transaction, they plug in the hardware wallet (usually via USB). The hardware wallet will sign transactions without compromising the private key. The downside to hardware wallets is the cost and availability of the devices. Ledger and Trezor are well known hardware wallets.

Software wallets exist on computing devices, like a desktop computer, a smartphone, or in a web browser. Since computing devices run many programs or applications, they are susceptible to viruses, malware, and phishing schemes, making all software wallets vulnerable to some degree. That being said, hacking incidents are extremely rare and software wallets are generally considered safe for everyday use.

There are many software wallet choices, which can make choosing overwhelming. We welcome you to try the Bitcoin.com Wallet app, which is an easy-to-use but powerful multi-coin crypto wallet trusted by millions, but we have also written several useful articles to help you navigate the process of choosing:

• How to choose the best crypto wallet? With so many choices available, this article will help you weigh the key factors to consider when choosing a best crypto wallet
• What’s a ‘non-custodial’ wallet? The non-custodial model is important because it puts you in charge of your cryptoassets and protects you from third-party risk. If you don’t understand what that means, this article is for you.
• How do I create a crypto wallet? This will help you quickly and easily create a crypto wallet. This article goes into more detail about the different wallet types and their advantages and disadvantages. best crypto wallet

Features and Benefits of Crypto wallet

Crypto wallets, despite not being physical wallets, hold the keys to your cryptocurrencies. They come with various features that enhance security, usability, and functionality in the exciting world of crypto. Here’s a breakdown of some key features and benefits:

Security Features:

• Private Key Storage: Secure storage of your private keys is paramount for crypto wallets. These private keys are essentially passwords that grant access to your cryptocurrency holdings.
• Multiple Signature Options: Some wallets offer multi-signature functionality, requiring multiple private keys to authorize a transaction. This adds an extra layer of security against unauthorized access.
• Password Protection: Wallets typically use password protection as an initial security barrier. Biometric authentication like fingerprint scans or facial recognition can also be available for added security.

Usability Features:

• User-Friendly Interface: A well-designed interface makes it easy for users to navigate, manage their crypto holdings, and conduct transactions smoothly.
• Mobile Compatibility: Mobile wallets allow you to access and manage your crypto on the go, providing greater flexibility and convenience.
• Multiple Cryptocurrency Support: Many wallets support a wide range of cryptocurrencies, allowing you to store and manage various digital assets in one place.best crypto wallet

Functional Benefits:

• Sending and Receiving Crypto: The core function of any crypto wallet is to facilitate sending and receiving cryptocurrency to and from other wallets or exchanges.
• Tracking and Monitoring: Keep tabs on your crypto holdings and track their value fluctuations in real-time with integrated market data feeds.best crypto wallet
• Staking and Earning Interest: Some wallets enable staking certain cryptocurrencies, allowing you to earn rewards for holding them.

Additional Features:

• In-Built Exchange: A few wallets offer integrated cryptocurrency exchanges, enabling users to swap between different cryptocurrencies directly within the wallet.
• DApp Integration: Some wallets allow interaction with decentralized applications (DApps) built on blockchains, expanding the functionalities of your crypto use.

Benefits of best crypto wallet

• Security: Crypto wallets provide a secure way to store your cryptocurrencies, with features like private key encryption and multi-signature options.
• Control: Unlike holding crypto on exchanges, wallets give you complete control over your private keys and crypto holdings.
• Convenience: User-friendly interfaces and mobile compatibility make managing your crypto effortless.
• Accessibility: Anyone with an internet connection can set up a crypto wallet, promoting financial inclusion for the unbanked.
• Potential for Earning: Staking features in some wallets allow you to earn passive income on your crypto holdings.

Remember: It’s crucial to choose a reputable crypto wallet with strong security features and a positive track record.

crypto wallet User Experience?

The user experience (UX) with crypto wallets can vary depending on the specific wallet you choose, but there are some general aspects that influence user experience for both beginners and experienced users.best crypto wallet

Positive UX aspects:

• Simple and Secure: Ideally, crypto wallets should be easy to set up and navigate, even for beginners. Strong security features like private key management and multi-factor authentication are crucial for a positive UX.
• Mobile Friendly: The ability to access and manage your crypto holdings on the go through mobile apps is a major convenience factor.
• Clear Interface: A well-designed interface with clear instructions, intuitive layouts, and real-time data on your crypto holdings is essential for a smooth user experience.
• Multiple Features: Advanced users might appreciate features like built-in exchanges for swapping cryptocurrencies or DApp integration for interacting with decentralized applications. best crypto wallet

Challenges to Consider:

• Security Burden: For beginners, the responsibility of managing private keys and ensuring security can be daunting. Wallets need to strike a balance between robust security and user-friendliness.
• Recovery Options: Losing your private key can result in permanent loss of your crypto. Easy-to-understand and secure recovery options are important for UX.
• Limited Customer Support: Compared to traditional financial institutions, some crypto wallets might have limited customer support options, which can be frustrating for users encountering issues.
• Volatility: The inherent volatility of the cryptocurrency market can be a concern for users, and wallets should provide clear information about price fluctuations.

Improvements for a best crypto wallet UX:

• Educational Resources: Incorporating educational resources within the wallet app can help users understand complex crypto concepts and navigate the platform more confidently.
• Security Tutorials: Clear and easy-to-follow tutorials on managing private keys and security measures can empower users to take control of their crypto assets.
• 24/7 Customer Support: Having reliable customer support channels can significantly improve user experience, especially for beginners encountering problems.
• Transparency and Compliance: Clear communication about wallet fees, security practices, and regulatory compliance can build trust and enhance user experience.

Overall, crypto wallet UX is constantly evolving. The best wallets prioritize user-friendliness, robust security, and features that cater to both beginners and experienced users. By considering these aspects, you can choose a crypto wallet that provides a positive and secure experience for managing your digital assets.

Is crypto wallet Safe?

The security of crypto wallets depends on several factors, but they can be generally safe if you choose a reputable one and follow proper security practices. Here’s a breakdown of the security considerations:

Security Features of Crypto Wallets:

• Private Key Storage: This is paramount. Reputable wallets securely store your private keys, which are like passwords to access your crypto. Encryption and secure hardware storage are common methods.
• Multiple Signature Options: Some wallets offer multi-sig functionality, requiring multiple private keys to authorize a transaction. This adds an extra layer of security against unauthorized access.
• Password Protection: Most wallets have password protection as a first line of defense. Biometric authentication like fingerprint scans or facial recognition can also be available.

Potential Security Risks:

• Hacking and Malware: Just like any software, crypto wallets can be vulnerable to hacking attempts or malware. It’s crucial to choose a reputable wallet with a strong security track record and update it regularly.
• Phishing Scams: Be cautious of phishing attempts that try to trick you into revealing your private key or login credentials to fake websites or apps.
• User Error: Losing your private key or recovery phrase can result in permanent loss of your crypto. Make sure you understand and follow proper backup procedures.

Tips for Safe Crypto Wallet Usage:

• Choose a Reputable Wallet: Opt for wallets from established providers with a history of security and positive user reviews.
• Strong Passwords and 2FA: Use strong, unique passwords and enable two-factor authentication (2FA) for added security.
• Beware of Phishing: Never share your private key or recovery phrase with anyone or any website.
• Regular Backups: Back up your private key or recovery phrase securely using methods recommended by your wallet provider.
• Keep Software Updated: Ensure your best crypto wallet software and device firmware are updated to the latest versions to patch any potential vulnerabilities.

Security Benefits of Crypto Wallets:

• Control Over Your Crypto: Unlike exchanges, wallets give you complete control over your private keys and crypto holdings, reducing the risk of exchange hacks or restrictions.
• Secure Storage Options: Reputable wallets employ strong encryption and secure storage mechanisms to protect your private keys.best crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto walletbest crypto wallet

In Conclusion:

Crypto wallets can be a safe way to store your cryptocurrency if you prioritize security. By choosing a reputable wallet, implementing strong security practices, and staying vigilant against scams, you can minimize the risks and enjoy the benefits of crypto ownership. Remember, crypto is still a relatively new technology, and exercising caution is essential

Access to private keys (owning your cryptoassets)

If you don’t have access to the ‘private keys’ for your cryptoassets, technically you do not have control over your crypto – so make sure your wallet provides you with access to your private keys.

The private keys for crypto addresses take the form of randomly generated 12 or 24-word passphrases, and each crypto address has its own private key (passphrase). Whoever is in possession of the private key for an address, has complete control over the crypto associated with that address. This means if you’re using a wallet that doesn’t give you access to your private keys, you have nothing more than a claim to your cryptoassets; someone else is taking custody (and control) of them. In the event that, for example, your custodian goes bankrupt, in all likelihood you’ll never see your cryptoassets again.

Additionally, when you don’t hold the private keys to your cryptoassets, every time you want to use them (eg. send them), you need to ask for permission from the custodian (since the custodian is the one in control). Problem is, the custodian may, for example, delay your send request by days and charge additional fees to “let” you use your cryptoassets. By contrast, when you have the private keys, you’re interacting directly with the cryptoassets’ public blockchain, so there’s no middleman.

The Bitcoin.com Wallet of course provides you with access to your private keys. Importantly, generating your private keys using the Bitcoin.com Wallet is done exclusively on your device. This means that only you will have access to your private keys (not Bitcoin.com nor anyone else).

Back up features

The best wallets make it easy to manage (back up) all your private keys. While it’s important to possess the private keys to your cryptoassets, managing those keys can be an onerous task. There are a few reasons it’s difficult:

First, for most people, the safest way to store private keys is by writing them down on paper and keeping that paper somewhere safe.

Second, you may want to have more than one wallet. For example, you may want a savings wallet and a spending wallet – and for each wallet you’ll have a different private key that you must manage.

Finally, if you’re using a multi-coin wallet (like the Bitcoin.com Wallet), you’ll have at least one private key for every different blockchain your wallet supports. If you start trading using multiple cryptoassets on multiple chains, managing all your keys can be a lot of work.

A wallet with private key management features, also known as back up features, makes the process a lot easier. The Bitcoin.com Wallet offers ‘Cloud Backup’ for your private keys. With this feature, all of your private keys are saved in the cloud (Apple or Google) and

whenever you create a new wallet, the new private keys for it are automatically backed up to the cloud. Note that the keys are stored in encrypted form and you create a single password of your choosing that decrypts them. If you lose access to your device, you’ll just need to re-install the app, sign in (via Apple or Google), and enter your Cloud Backup password to restore access to all of your wallets and all of your cryptos. By contrast, without this feature, you’d need to enter all of your 12 or 24-word passphrases for all of your wallets and cryptos in order to restore access to them.

Fee customization

The best wallets make it easy to customize the fees you pay to public blockchain validators/miners. Look for a wallet that has convenient presets like fast, medium, and slow. When you choose fast, for example, you’ll pay a higher fee, but your transaction will complete in less time. It’s also nice to have the option to choose exactly the fee you pay for each transaction. In the Bitcoin.com Wallet, for example, you can decide the precise byte/satoshi rate for Bitcoin transactions and the exact gas price for Ethereum transactions.

Multisig (shared wallets)

A nice feature to have in a wallet is the ‘multisig’ option. A multisig wallet is one that requires more than one person to approve transactions. For each multisig wallet, you decide 1) how many participants it has, and 2) how many of the participants are required to approve transactions. For example, a “3 of 6 multisig wallet” would have six participants and require at least three of them to approve any transactions. Any of the six participants can propose a transaction, but at least three must ‘sign’ or approve it.

This feature can be used to improve security for a wallet. For example, imagine a multisig wallet where three people in your family are participants, and 2 of 3 are required to approve transactions. This would protect your funds in the event one of the three people loses their private key. It would also protect your funds in the (albeit highly unlikely) event that one of the three people is kidnapped by would-be cryptoasset thieves.

The other key use case for a multisig wallet is to manage the treasury of an organization. Here, the wallet can be set up such that, for example, 3 of 6 board members must sign a transaction to approve a spending request.

Other features

The best crypto wallets today are extremely easy to use and integrate a lot of convenient features. Here are some to look out for:

• Personal notes

It’s nice to be able to add text to your transactions to remind you who sent what, when, and where.

• Display currency

Most wallets allow you to toggle between displaying your currency in crypto units and local currency. It’s also nice to be able to switch between local currencies such as USD, GDB, and EUR.

• Unlimited wallet creation

This is a nice feature because it makes it easier to organize your funds as you see fit. best crypto wallet

Summary

While we do recommend the Bitcoin.com Wallet as the best-in-class software wallet, there are plenty of quality crypto wallets out there

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