An Ethereum wallet is a piece of software that manages one or more accounts on the Ethereum application. Ethereum accounts are entities on the Blockchain that can send transactions and have a balance.

Each account is represented by an address. This address is similar to a bank account number in the traditional world. You can use it to ask other people to send you funds or to withdraw funds from an exchange to your Ethereum wallet.

When you download an Ethereum wallet like the ones listed above, they generate an account for you. Some also allow you to hold multiple accounts within the same wallet app. Your wallet also holds your seed phrase for you.

Here’s an example of what a seedphrase can look like:

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The seed phrase holds all the information that is needed to recover your funds on the Blockchain. That’s why it’s extremely important you keep it safe. If it falls in the hands of someone malicious, they could input it into a wallet application and transfer all your funds to themselves.

What could be a potential threat is also a cool feature. The seedphrase allows you to seamlessly switch from one wallet to another while keeping the same Ethereum account. All that changes is the interface you use to read your balance and send funds.

Ethereum wallets can come in different forms. Here are the most popular types.

Ethereum Web wallets

Web wallets let you interact with Ethereum via a web browser. They were the first type of wallets that were widely used. Perhaps the most famous one of this type is Metamask, a browser plugin that can be downloaded in the plugin store of all major browsers like Google Chrome, Firefox and Brave.

Metamask is supported by most decentralized applications and super easy to use. When you visit the web page of a decentralized application your Metamask wallet opens up and you can connect it in one click.

Using a plugin wallet like Metamask, the seed phrase is stored in your browser so it’s of utmost importance to keep a backup in case you lose your computer or delete your browser.

Ethereum Mobile Wallets

Mobile Ethereum Wallets have become popular in recent years. Mobile Ethereum wallets run as mobile iOS/Android apps. Famous examples of mobile Ethereum wallets are Argent, Dharma or Monolith.

The advantage with a mobile bitcoin wallet is that you can manage your funds on the go. Some also argue that phones are more secure as the wallets, holding users’ keys can be protected with phone security features such as Face or TouchID.

Ethereum Desktop Wallets

The advantage with Ethereum mobile wallets is that you can manage your funds on the go. Some also argue that phones are more secure as the wallets holding users’ keys can be protected with phone security features such as Face or TouchID.

One issue with mobile wallets up until recently was that it was hard to use them with decentralized Ethereum applications (dApps). Most of the dApps are hosted on web pages and there was no way to connect mobile wallets to these applications. Today this has changed with the widely adopted WalletConnect standard that allows users to connect their mobile wallet by scanning a QR code displayed on their computer with a phone camera.

Ethereum Hardware wallets

Hardware wallets are small physical devices that are optimized to store your seed phrase offline - where it is close to impossible to be hacked. To use a hardware wallet you have to connect it to your computer or phone. You can then initiate transactions in the wallet app and sign them with the hardware wallet. This process ensures that your private key never leaves the device.

These additional security guarantees make hardware wallets the best option if you want to keep funds over a long time horizon without ever moving them. However, if you plan to use your Ether and other crypto tokens on a regular basis to put them to productive use, it is better to go with an Ethereum mobile wallet or web wallet.

Ethereum Name Service (ENS) support

Ethereum Name Serviceis like a phonebook of crypto addresses. It allows users to pick a username (like ‘vitalik.eth’) and connect it to their Ethereum address. This makes it much easier to receive funds from friends as it can be given instead of the long address consisting of numbers and letters. Good Ethereum wallets should support ENS.

Fiat On- and Off-ramps

Some Ethereum wallets offer the ability to users to buy Ether and other Ethereum tokens using their debit card or bank transfer. This makes the life of new users much easier as they don’t have to worry about additionally signing-up to an exchange, acquiring these tokens first and then sending them to their Ethereum wallet.

Protocol Integrations

Ethereum wallets also differentiate by the number of decentralized applications they have natively integrated. For example, a wallet might offer users to earn interest on their tokens via Compound or to swap tokens via Uniswap. This is convenient for users as they can do many things without leaving their wallet.

Reliable Fee Estimations

Any Ethereum transaction, whether it’s simple token transfer or a more complex smart contract interaction requires a fee. This fee is called gas and is denominated in Ether. The fee can vary depending on the activity on the Ethereum network. It’s the duty of any good Ethereum wallet to provide users with reliable information and guidance on the fee they have to set to get their transaction mined in a reasonable amount of time.

Meta transactions

Meta transactions are a special type of transaction supported by smart contract wallets like Argent, Authereum or Dharma. In short, they allow these wallets to bundle transactions together to make users’ lifes easier. For instance, a user who does not have Ether to pay the gas for a transaction but holds another token, can send funds anyway. The wallet simply takes the other token and sells it on a decentralized exchangeand uses the proceeds to pay for the transaction.