After buying Ethereum on an exchange like Coinbase, you should just leave it there until you decide to sell… RIGHT?
Leaving cryptocurrencies on an exchange is risky, due to how cryptocurrencies are stored.
Two of the main components of a cryptocurrency wallet are the public and private keys.
Private keys use cryptography to prove ownership of coins. This is ultimately what gives you access, and control of your coins.
When cryptocurrency is on an exchange, the exchange holds your private keys, which means in the event of hack or shutdown, your coins could be compromised leaving you out of your hard-earned money.
This is why is it is important to learn about cryptocurrency wallets, and how to store your coins safely. A cryptocurrency wallet can be a hardware device, website, mobile app, or simply a piece of paper; these are what store and manage your private keys needed for accessing and sending your cryptocurrencies.
There are endless options of Ethereum wallets, but this post will compare and contrast different Ethereum wallets allowing you to choose the best one for you.
Factors to Consider for Choosing a Wallet
- Should I choose the most secure option?
- Am I storing just Ethereum? Or other cryptocurrencies such as Bitcoin.
- How often am I accessing my wallet?
- Is the wallet open source?
Ethereum Hardware Wallets
The hardware wallets are physical wallets which you can hold and store in a physically safe location. Hardware wallets such as the Ledger Nano S store your private keys in an encrypted form. Hardware wallets with proper setup, never expose sensitive information to the online world.
Hardware wallets are the go-to option for serious cryptocurrency investors. The security that they offer is unmatched by online and software wallets. Here are the ones we recommend:
Ledger Nano S
The Ledger Nano S is the most popular cryptocurrency wallet and for good reason. It asks for a PIN Code upon accessing the device, ensuring only authorized users can access its funds. In the event the PIN Code is guessed incorrectly several times, the device is “wiped”.
Don’t worry, your funds are safe, and can be accessed using the next level of security: the backup phrase.
If the device is lost, stolen, or wiped, you can access all contents of the wallet by entering the backup phrase included in the box. The backup phrase is typically between 12-24 words, which makes an enormous pool of possible phrases due to the way permutations in mathematics work.
To use the wallet, plug it in using the USB cable included in the box. The device only turns on when plugged into a computer. The Ledger Nano S works with all operating systems, so there is no need to worry if it will work on your computer.
On the top of the device are two buttons, that can be used to navigate its menus. The buttons are used to cycle left/right or up/down. By pressing both buttons, this is kind of like clicking “confirm” or “ok”.
Never purchase a Ledger Nano S from anyone or anywhere that is not the official website. Here’s a preview of the wallet:
It uses a secure electronic chip. You can activate the chip only with your password. Trezor can interact safely with PCs using the limited USB connection.
Trezor provides high security and ease of use. You can send or receive Ether securely through Trezor. It works on Windows, macOS, and Android.
However, it is expensive and costs you $99.
Ethereum online and web wallets
Online wallets are one of the more popular options due to the how convenient they are to use. Unfortunately, this convenience comes at a price and leaves your cryptocurrency vulnerable to hackers. Leaving cryptocurrency on an exchange is somewhat risky, but can be ok to do in small amounts.
Some of the most popular Ethereum web wallets are:
Coinbase is the most popular exchanges and allows users to purchase and store Bitcoin, Ethereum, BCash, and Litecoin. Built into the exchange are wallets for each currency. From here, you have a beautiful interface for sending and receiving Ethereum.
You may access the Coinbase wallet through a browser or the Coinbase mobile app on iOS and Android.
It also offers you extra security through a multi-signature vault, based on a 2-of-3 key wallet system. Coinbase holds most of its cryptocurrency assets in the cold storage for added security, although it does not come close to offering as much security as a hardware wallet does.
In the event Coinbase is hacked, they have their cryptocurrency insured, meaning you could be eligible for full/partial compensation.
myEtherWallet is one of the better online cryptocurrency wallets out there. It uses a web interface to interact with your wallet and is free.
MyEtherWallet is a decent option if you decide to use a web wallet as it gives you the ability to access and write smart contracts. It also allows you to connect with Ledger Nano S or Trezor to access your Ether safely within MyEther platform.
Ethereum Software Wallets
Software wallets are more secure than web wallets but are still not better than hardware wallets. Software wallets can be applications that you download to a computer or mobile device that stores cryptocurrency. It is recommended to store cryptocurrency in small amounts on software wallets.
Here are some of the most popular Ethereum software wallets:
Exodus is one of the better desktop wallets. It is a multi-coin wallet, meaning it can hold multiple cryptocurrencies including Ethereum. It has ShapeShift built-in so that you can quickly and easily do your transactions of Ether. Exodus also has a minimalistic user interface. It doesn’t take the private keys from the desktop, instead, the private keys remain on your PC.
It also offers one-click email recovery, backup seed keys, etc. You can restore your wallet easily. You can trade Ether with ease using Exodus. It supports Windows, Mac, and Linux.
It has a very attractive user interface. Exodus shows your full portfolio of cryptocurrencies like Ethereum in a colorful pie chart.
Exodus is always in the online mode and connected to the Internet, which makes it is less secure as compared to a hardware wallet.
Jaxx is an outstanding multi-asset wallet. It supports many cryptocurrencies including Ethereum. It has a simple user interface and has Shapeshift capabilities built into the wallet.
Your private keys remain on your device and do not leave the device giving it increased security. Jaxx many good security features such as seed keys, setting a PIN, etc. It has a strong and innovative development community also.
Jaxx is available not only on Windows, Mac, and Linux desktops; but also on Android and iOS mobile. It is also available through Chrome and Firefox extensions.
It has a simple interface for doing Ether transactions for receiving, sending and trading your coins. It is integrated with Shapeshift also. Jaxx is online and web-based, so it carries some risk.
MetaMask is a web browser based wallet. You can use it to store and send Ethereum and other ERC-20 tokens. Your private keys are encrypted and password protected. Moreover, the private keys are stored on your PC, providing you extra security. Metamask can connect to myEtherWallet, allowing you to use it’s features and interface.
A major con of Metamask is that it is a web extension, which makes it so every website you access can tell you have the wallet installed, leaving you with targeted cryptocurrency ads.
Mist is a very good desktop wallet. It can hold your cryptocurrencies including Ether. It is password protected.
It has ShapeShift built making it so that you can quickly and easily trade your Ether. You have got public and private keys to do Ether transactions. Your private keys remain on your device.
Coinbase Mobile Wallet
Coinbase offers a mobile wallet version also with Coinbase iOS and Android apps. It is a very good mobile wallet for receiving, sending and trading Ether. It offers various security features for the safety of your Ether transactions. It has an easy and simple user interface for various transactions.
You can securely access all your cryptocurrency accounts, Coinbase wallets, vaults and transaction details through this mobile app on the go.
Paper wallets are extremely secure, on paper…
They have the same security level as hardware wallets in that they can be created without exposing sensitive information to the internet. However, there are several downsides that make them less popular choices.
- You can lose the piece of paper, make backups
- Paper wallet generators can sometimes phish your private keys
ETHAdress is a paper wallet. It is an open-source project. You can use ETHAdress for creating a paper wallet for Ethereum. ETHAdress offers you the cheapest form of cold storage for your Ether.
Features of a Great Ethereum Wallet
Security: A good cryptocurrency wallet should provide full proof security and have minimum exposure to human errors.
Simple User Interface: It should have a simple user interface with full ease of use.
Compatibility: A good cryptocurrency wallet should be compatible with different types of operating systems such as Windows, macOS, etc.
Private Keys: It should provide a private key that only you can access without any possibility of unauthorized access.
Backup: It should provide a facility for backup of all your information and data.
Robustness: It should be durable and robust, without any glitches.
Development Community: It should be open-source and have an active development community.
Depending on your circumstances, certain Ethereum wallets will be better for you. If you are a long-term holder of Ethereum, look no further than the Ledger Nano S or Trezor. These cost money but provide the best security by a mile.
If you plan to move your Ethereum around often, use a hot wallet such as myEtherWallet or Exodus.