The increasing popularity of cryptocurrencies and digital assets including Ethereum (ETH) has turned them into viable and more serious investment assets. This growth in mainstream acceptance means that people involved in cryptocurrency trading are now searching for the best wallets to ensure their ETH coins remain safe and secure.
This guide will carry out a detailed analysis and evaluation of the most popular Ethereum wallets focussing on several features including ease of use, cost, performance, security and overall accessibility of the desktop wallet. Let's find out which are the best Ethereum wallets in 2021.
Our List of the Top Ethereum Wallets
You should check the stand-out features, pros, and cons of every wallet to pick the best ones so you are better informed to make the right choice for storing your Ethereum tokens. Below is a list of Ethereum wallets based on several criteria such as security, accessibility and ease of use.
What is an Ethereum Wallet?
An Ethereum wallet or a cryptocurrency wallet is a device or software that is used to secure your ETH tokens. These cryptocurrency wallets feature the ability to communicate with their respective blockchain protocols and they can generate data that is crucial for sending and receiving Ethereum through the blockchain.
You have to keep in mind that your ETH tokens are only as secure as their wallet. That's why you must rely on the most secure web wallet that fits your requirements. For instance, there are short term brokers who trade ETH on a daily basis. They need to securely hold their ETH coins but they also need their funds to be accessible. On the other end of the spectrum, some long-term traders tend to hold their Ethereum coins for months and sometimes even years. Their foremost requirement is high-end security.
Types of Cryptocurrency Wallets
Ethereum wallets are available in different types and you can differentiate them depending on a variety of factors. For choosing the right ether wallet for your trading and crypto storage requirements, you need to have a basic understanding of all types of wallets, their features, and pros and cons. This way you will be in a more informed position to pick the right Ethereum wallet.
Ethereum wallets that feature online connectivity are referred to as hot wallets since the funds are always accessible. The best advantage of a hot wallet is that they keep your Ethereum tokens available while providing a decent level of security. They aren't as secure as cold wallets but provide better accessibility and user-friendliness. Hot wallets are more likely to be targeted by hackers and cybercriminals since they can be accessed through online exploits.
Their ease of use combined with enhanced accessibility of funds makes them a better fit for day-to-day traders and short-term investors who need to sell, buy and trade their Ethereum tokens on short notices. Hot wallets are also easy to set up.
Wallets that don't have online connectivity are called cold wallets. Since they are not connected to the internet, they offer much better security as compared to hot wallets. The downside is that your funds aren't as easily accessible since you first have to connect your cold wallet to a computer. Lack of internet connectivity makes it next to impossible for cybercriminals to access your ETH funds.
These wallets make for a better choice for long-term investors and traders who want to hold their positions for months or years. These investors are often referred to as 'HODLers' as they are more interested in earning large gains by keeping their position open for a long time. Since they don't need to access their coins frequently, cold wallets are a better option for them.
Hot vs. Cold Wallets
- Cold wallets deliver high-level security as they lack internet connectivity.
- Hot wallets deliver enhanced accessibility to funds thanks to their internet connectivity.
- Cold wallets are better suited for long-term traders who want robust security.
- Hot wallets are better suited for short-term traders who want easy access to their funds.
- Cold wallets are less likely to be attacked by cybercriminals.
- Hot wallets are more likely to be attacked by cybercriminals.
- Cold wallets take time to set up and may require technical knowledge.
- Hot wallets are easy to set up.
These are cold wallets available in the form of physical devices and resemble a flash drive. Hardware wallets can manage the public keys of Ethereum tokens on an individual level and have a screen and buttons for user input. They don't contain any battery and have no internet connectivity for security reasons. You have to connect them to a computer so you can access them through a native desktop app. They are the most expensive type of Ethereum wallets but also offer the highest level of security for ETH tokens.
Mobile & Desktop Wallets - Software Wallets
These are web services, desktop programs, and mobile applications. They are a form of hot wallets as they feature internet connectivity. In the last few years, mobile and desktop wallets have progressed at a rapid pace and today they deliver an exceptional combination of affordability, performance, security and accessibility to the crypto trading community.
- Desktop Wallets - These are software programs installed on your PC and can be used as both hot and cold wallets depending on the accessibility of internet connectivity. Desktop wallets provide an anonymous and privacy-oriented way to store Ethereum coins. Just make sure that you have your data backed up.
- Mobile Wallets - These are software apps but that take the form of smartphone apps. They are not highly secure but provide on-the-go access to your ETH tokens. Ensure that you are choosing a mobile wallet that features encryption to keep your funds secure.
This is a cold wallet that stores your ETH coins by printing the public and private keys on a physical paper in a QR form. You need technical awareness to use paper purses for storing Ethereum coins. They are the least accessible type of wallet.
How Do Ethereum Wallets Work?
Ethereum wallets hold your public and private keys securely and enable you to receive and send ETH tokens using the network blockchain. The wallet has a unique identifier that corresponds to the information present on the Ethereum blockchain which is a record of how many ETH coins you have. Every Ethereum wallet has its private key which is required to transfer your coins out of the wallet for trading. While the address of the wallet is public, the private keys remain confidential.
Don’t forget that ETH tokens are not exactly saved on the Ethereum wallet itself. Each ETH token is present on the blockchain and you only have access to the public and private keys that correspond to the said ETH token on the blockchain. If you want to spend ETH tokens stored in your wallet, you need the public wallet address of the person you want to trade with.
Key Things to Consider when Choosing the Best Ethereum Wallet
Before choosing a wallet for storing your Ethereum funds, you need to make sure that you have assessed the crucial factors and they align with your needs. The major factors you should take into consideration include the following:
- Security – The main purpose of a wallet is to secure your Ethereum coins. That’s why it is necessary to ensure you are picking an Ethereum wallet that provides the level of security that fits your needs. Generally, long-term investors require the highest level of security while short-term traders need a balance of accessibility and security.
- Compatibility – While most wallets today are compatible with Ethereum, it is a good idea to ensure that the wallet you are choosing will support ETH and other altcoins you might buy.
- Accessibility – For short-term traders and investors, accessibility to funds is a major factor. If you want to access your coins frequently, make sure your wallet is easy to use and accessible.
- User-Friendliness - Those traders and investors who are new to the cryptocurrency space or are not too familiar with wallets should choose an Ethereum wallet that is user-friendly.
Pros and Cons of Using Ethereum Wallets
If you want your Ethereum coins to be safe while you trade, you need a solution that is convenient and reliable. Ethereum wallets provide the best of security, performance and reliability ensuring you have access to your ETH coins while keeping them secure.
Frequently Asked Questions
Hardware or cold wallet. It doesn't have internet connectivity which makes it less likely to be attacked by cybercriminals.
A software or a hot wallet. They feature online accessibility which ensures quick access to your Ethereum tokens.
Not necessarily. Software wallets including mobile apps don't require you to have the technical knowledge and are much user-friendly.
A hardware wallet or a paper wallet. They feature the highest level of security.
Ethereum wallets rely on cutting edge security features such as end-to-end encryption, passphrases, and two-factor authentication (2FA) to keep your ETH tokens safe and secure.
If you lose your private key to ETH tokens, there is no way to recover it. That’s why you must use the right type of wallet for your ETH coins.
Yes. Many Ethereum wallets offer you the ability to directly trade, buy and sell through their native software.
No. All the ETH coins are present on the blockchain. You just store private keys that correspond to the ETH coins on the blockchain.