Finding the right cryptocurrency wallet is no easy task. But if you want to use your crypto on an everyday basis it is crucial that you understand the different models that exist and choose a wallet that suits your needs.
Custodial wallets are like banks. The provider controls your assets and saves them for you.
Non-custodial wallets allow you to keep complete ownership of your funds. Your funds are stored on the Blockchain.
No risk of losing private key/access to your funds
Can hold fiat currencies ($,€) in addition to crypto
Similar user experience to traditional apps
No direct ownership over funds
Users need to identify themselves (KYC etc.)
Geographically limited, not available worldwide
Custodial wallets are a great place to start when you’re new to crypto, as they are fairly similar to modern banking apps, allow users to seamlessly buy & send crypto as well as storing multiple cryptocurrencies in the same app.
Wirex offers a borderless account that holds a range of fiat currencies and crypto and lets you seamlessly exchange between the two.
A debit card that gives you 0.5% cashback in Bitcoin for every purchase you make
Founded in 2012 in San Francisco, Coinbase is a custodial digital currency wallet with an integrated trading platform.
Simple to use and good reputation
Non-custodial wallets are the real deal when you want to get seriously into crypto. Non-custodial wallets allow you to directly interact with the Blockchain, where your funds are stored. The wallet provider merely provides an interface for you to communicate with the Blockchain network. Crucially, no one but you can access your wallets funds. Not even the government.
They allow you to store several cryptocurrencies in one wallet app. For example, bitcoin and ether.
Bitcoin wallets allow you to store only bitcoin, but offer special, bitcoin specific features.
Ethereum wallets work only on Ethereum but allow you to use decentralized Ethereum applications a.k.a “DeFi”
Hardware wallets are similar to Multicoin wallets. They allow you to store multiple cryptocurrencies but store the private keys on a hardware device.
ZenGo is the first keyless non-custodial wallet supporting multiple cryptos
You never risk loosing your private key
Bitwala offers European users a bank account that has a Bitcoin and Ethereum wallet integrated within, as well as the possibility to buy and sell Bitcoin and Ether seamlessly from within the app.
Bank account and crypto wallet in one
The BlueWallet is a non-custodial, bitcoin-only wallet with support for the Lightning Network. It's simple to use implements most of the latest bitcoin features available.
Supports Bitcoin Lightning network
Blockstream Green is a non-custodial, bitcoin-focused* wallet developed by Blockstream, a well-established company in the bitcoin space. Blockstream Green has a clean user interface and a very complete set of usability, security as well as some privacy features which make up for a good user experience both for beginners and advanced users.
Heavy focus on simplicity and security
Argent is currently topping the charts for smart contract wallets on Ethereum. It brings Ethereum’s best finance applications in the users pockets and makes them extremely easy to use.
No blockchain fees - Argent pays them for you
Metamask is the most widely used Ethereum wallet among early adopters. It allows users to connect their Ethereum wallet to any decentralized application.
Supported by every Ethereum application
A crypto wallet is a piece of software that enables you to communicate with Blockchain networks in order to send and receive cryptocurrencies. At its core, a wallet consists of a public key, which is your personal identifier, and a private key, which allows you to sign transactions and authenticate yourself to the network. The Blockchain is a distributed ledger that keeps track of the balances belonging to each individual wallet. Your wallet is a graphical interface that allows you to sign transactions to send funds and prove to the network that the transaction is legitimate. Miners or validators append legitimate transactions to the network, thereby changing the state of the Blockchain every few seconds or minutes.
Yes. You can download as many crypto wallets as you want and create new addresses (public & private keys). Alternatively, you can use the same seed phrase multiple times, simply by importing the seed phrase in other wallet applications. This means you will see the same balance and transaction history in different wallet interfaces.
Most crypto wallets are free to use and the code is open source for anyone to inspect. The fact that it’s open source is important so that tech savvy users can inspect the code and assess whether it’s secure or not.
Crypto wallets are pseudonymous, meaning they don’t reveal your real-world identity but they do have an identifying number attached to them. Transactions originating from wallets are public and can be looked at by anyone using a blockchain explorer. Most transactions happening on a Blockchain are anonymous. However, in rare cases authorities investigate who is behind a certain crypto wallet address. This can be done by tracing back transactions to where they originated from, in most cases this would be a crypto exchange where users have to sign-up with their real world identity.
The account holding your funds is an bookkeeping entry on a decentralized ledger - this ledger unlike a centralized one is virtually impossible to hack. However, what an attacker can do to hack your wallet, is stealing your private keys that you hold locally on your computer or on a pice of paper. If an attacker manages to get hold of your private key, they could transfer your funds out of your wallet into theirs.
Crypto wallets make money by integrating additional features like ‘buying & selling’ of cryptocurrencies or ‘lending & borrowing’. Some wallets make money by offering premium services like insurances or additional protection.