What is the Best Crypto Wallet?
When investors start trading, buying and selling cryptocurrency and NFTs they need a secure place to store the passwords to their crypto assets.
Did you know that picking the right wallet can provide you with greater security and save you on fees?
This guide breaks down how to pick the best wallet for crypto, explains what they are, how they work and all your crypto wallet questions.
What are the best crypto wallets?
The best crypto wallet in 2023 heavily depends on your intended use and needs. Here are our choices of the best wallets available:
Bitbuy: the versatile and adaptable wallet
Bitbuy's web-based wallet is a simple and inexpensive crypto wallet option. It is compatible with most common coins, and it lets you trade for less thanks to low fees. Since the wallet is accessible from your phone or computer, you can buy, sell and trade anywhere, anytime. Wondering about security? Bitbuy's servers comply with international security standards and two-factor authentication ensures safer access to your account.
Bitbuy is a popular crypto exchange in Canada in part because it is regulated by the Ontario Securities Commission (OSC), the Canadian Securities Administrators (CSA) and The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
ZenGo: an accessible and secure hot wallet
Zengo is one of the best hot wallets on the market because of its focus on two essential features: security and usability. The wallet uses 3FA including a 3D biometric face map. They do away with a single point of failure by replacing a traditional private key with two secret shares, one stored on your device and the other on ZenGo’s servers. As for usability, the app isn’t just limited to buying/selling. You can also exchange and lend tokens. Zengo is a major hot wallet competitor and worth a look for crypto investors.
KuCoin: an ideal wallet for decentralized finance
KuCoin's wallet, known as KuWallet, is perfect for people who believe that the blockchain shouldn’t begin and end with cryptocurrency. The platform's partners include PancakeSwap, UniSwap, CoinGecko, Polygon and more so you can use DApps and tap into Web 3.0. KuWallet helps you to jump right into the world of decentralized finance and the blockchain. It has very low transfer fees and has proven security.
CoolWallet Pro: the most compact physical wallet on the market
CoolWallet makes hardware wallets as thin and compact as a standard credit card. They’re easy to take with you and discreet while still offering robust security. The CoolWallet Pro is Bluetooth-enabled for use with phones, tablets and more. It supports NFTs on the Rarible and OpenSea platforms. Unfortunately, it works with fewer coins than some competitors.
Trezor Model T: the high-end hardware wallet
Trezor Model T is Trezor’s top-of-the-line solution with the most features and best security. Bring together all your private keys, passwords and cryptocurrency into one hardware solution. It offers an attractive and functional colour touchscreen. It supports 1200 coins, more than its younger sibling the Trezor One.
CoolWallet S: the affordable, compact hardware wallet
The CoolWallet S is a simpler solution than its Pro counterpart. It is just as compact and convenient to take with you but drops support for NFTs and some coins. For many users, this will be enough and it comes with a much lower price. The CoolWallet Model S is a very good compromise for a relatively cheap, but robust and reliable cold wallet.
Trezor One: the best value for money for a hardware wallet
Trezor is a hardware crypto wallet leader. It's Trezor One lets you store your coins with the peace of mind that comes from a cold wallet. You don’t have to worry about a hardware failure or losing your wallet either because you can recover it offline with a recovery seed. Trezor is easy to use and a nice choice for beginners and experienced users who want to invest securely and intuitively. Trezor One supports more than 1,000 different coins so you can diversify what you hold.
Ledger Nano X: the most secure physical wallet
Ledger offers a compelling hardware and software package with its Nano line. Secure your coins and access them through the Ledger Live application. For more availability, Ledger Nano X has Bluetooth so that you can connect it to your phone while on the go. The app also is compatible with staking crypto so you can generate money on your crypto investments. This feature sets it apart from its competitors.
Ledger Nano S Plus: an ideal cold wallet for beginners
The second Ledger model, the Nano S Plus, is smaller and simpler to use than its counterpart the Nano X. It has a shorter battery life and does not have Bluetooth compatibility. It comes in at an attractive price for someone buying their first hardware wallet. Just like other Ledger wallets, you’ll still enjoy support for many coins and high-end security.
Binance Chain Wallet: the crypto wallet with the lowest fees
Binance Chain Wallet is Binance’s official crypto wallet. Quickly and easily access the Binance Smart Chain, Binance Chain and Ethereum. As with many hot wallets, transaction and crypto transfer fees can differ depending on the token involved - but Binance’s solution is particularly inexpensive with fees starting as low as 0.1% depending on the coin. Binance Chain Wallet also has the advantage of being available as a browser extension, so accessing and using your wallet is easy and convenient.
Do you still have some questions about crypto wallets? We explore the different types below.
What is a crypto wallet?
A crypto wallet, or cryptocurrency wallet, is used to store public and private keys for the purpose of securely carrying out cryptocurrency transactions. It can be a physical device or a program. A crypto wallet also allows for encryption and can be used to create sign-in requirements to protect crypto assets. A crypto wallet does this by creating both private and public keys for different purposes. Keys are created by generating a theoretical or random number that can then be used to access and transfer cryptocurrency. Understanding the difference between private and public keys is important.
What is a private key?
A private key is created using a cryptographic algorithm and should not be shared. This key is used by the owner of the crypto wallet to securely access and send cryptocurrency.
What is a public key?
From the private key, an owner can create a public key using the cryptographic algorithm. This public key can then be shared with a third party so that they can send you cryptocurrency without you giving access to the wallet.
Once you have a wallet, you can compare cryptocurrency exchanges so that you can start investing in crypto today.
Compare the best crypto exchanges
How does a crypto wallet work?
A crypto wallet works using blockchains and keys. Blockchains are digital ledgers or records of sale. Every time a digital currency is transferred using a crypto wallet, that transaction is recorded in a blockchain.
Wallet owners use their keys to access their cryptocurrencies. The blockchain combined with the keys creates a secure system of transfer. The keys prove ownership and the blockchains provide proof of sale. Keys made be help in hot or cold wallets.
What are hot wallets?
Hot wallets are any form of crypto wallet that has a direct connection to the internet. In other words, hot wallets are always online.
Examples of hot wallets are:
- Web-based crypto wallets
- Mobile crypto wallets
- Desktop crypto wallets
Hot wallets are convenient because of their ease of use. By having a hot wallet that is already connected to the internet, you can make a crypto trade or purchase almost instantly. To do this with a cold wallet you would first need to connect your device to a computer, and then move your cryptocurrency into a separate hot wallet that is connected online.
With convenience comes risk, hot wallets are more susceptible to online hacking and theft. Having your crypto wallet connected online means that there’s always a chance someone could access it through the internet, break your security and steal your cryptocurrency.
What are cold wallets?
Cold wallets are crypto wallets that are not directly connected to the internet. They will usually be on a device that has no online capabilities itself. Security is the main benefit of cold wallets.
For example, an external hard drive, USB drive, or another portable device can be a cold wallet. The device will then be connected to your computer and a key will be used to transfer the desired amount from the cold wallet to the computer.
If there are any malicious programs installed on the computer they would only be able to access the transferred amount and not the full amount on the cold wallet. This means that it is much more difficult to steal the cryptocurrency on it without stealing the physical device. Even if the device were to be stolen, the cryptocurrency would still have to be accessed using a key.
Many people trading and storing large sums of cryptocurrency will have both a hot and cold wallet. The majority of their cryptocurrency will be on the cold wallet and they will use the hot wallet to make trades and transactions in order to protect the majority of their cryptocurrency.
How do I get a crypto wallet?
There are many options for creating a crypto wallet. It has become incredibly easy to get into crypto investing. Online crypto exchanges have made crypto trading similar to stock transactions.
To create a crypto wallet you first need to decide what kind of crypto wallet you want: hardware, desktop or mobile wallet. We examine them below:
What are hardware wallets?
Hardware wallets are cold wallets contained on a hardware storage device.
These devices may come with associated software if you buy a name-brand hardware wallet. If not, you will need to get separate software if you buy a generic storage device. You will then need to download the software onto your computer, copy the recovery passphrase for your private keys and connect the device to your computer.
Good to know
For first-timers, it is easiest to buy a hardware wallet that comes with associated software as it will do all the small steps for you.
What are desktop wallets?
Desktop wallets are apps that run on your computer and allow you to access your cryptocurrency.
A desktop wallet is slightly easier to use than a hardware wallet as you simply need to run the software on your computer. It will start the process for you. Once again, you will need to copy a passphrase and private keys. Many of these programs can also be used on a hardware wallet for added security.
What are mobile wallets?
Mobile wallets are crypto wallet apps that run on your iPhone or Android.
Mobile wallets are the easiest wallets to set up, but they provide the least security. To create a mobile wallet, simply choose the desired cryptocurrency wallet from your phone's app store download and create an account. You will be able to start accepting and trading cryptocurrency almost instantly. It is recommended that you back up your mobile crypto wallet through the app. This will be a 12 to 24-letter passphrase that will act as a recovery phrase if you lose or break your mobile device.
Once you decide between hardware, desktop and mobile wallets, the providers will help you to get set up.
Just remember that there is a difference between a crypto trading account and a crypto wallet. Crypto trading accounts act similarly to stock accounts by allowing you to buy and sell cryptocurrency as you might with stocks. The drawback is that you never hold the actual cryptocurrency yourself. Instead, you just have the account with a parent company that is actually holding the cryptocurrency.
Regardless of the type of crypto wallet that you chose, you will be able to use it to buy, sell and trade cryptocurrencies from the top crypto exchanges.
Compare the best crypto exchanges
What is the safest crypto wallet?
The safest crypto wallet is a cold/hardware wallet.
This means a crypto wallet stored on a device separate from your computer that requires a private key to transfer cryptocurrency to another wallet or a secure platform where you will provide a public key to access the cryptocurrency amount you are trading. This separate device and private key provide an extra layer of security when making crypto transactions.
How much does a crypto wallet cost?
Some crypto wallets are free through established platforms such as Binance wallet. Others can range up to a couple of hundred dollars for a branded hardware wallet such as Trezon One or Ledger Nano X or a crypto software program.
As you can see below, most crypto wallets have a cost. Hardware wallets will have a direct cost for the device itself. Desktop and mobile wallets may be free upfront, but exchanges have translation fees built into the platforms.
|Binance wallet||desktop||transaction fees|
|Ledger Nano X||hardware||$59-179|
|Coinbase||mobile/desktop exchange or desktop wallet||Transaction fees|
How do you cash out your crypto wallet?
There are several ways of cashing out your cryptocurrency. It depends on what wallet you are using and how it's being held. Cashing out cryptocurrency has become easier, but still has its risks and fees.
- Centralized exchange: If you have your crypto wallet in a large crypto exchange such as Binance, Coinbase and Gemini, they will convert your crypto to cash the same way you might convert Canadian Dollars to Euros. To do this you have to use their platform, convert at their rate and pay transaction fees. Once you complete the transaction, the currency of your choice will be deposited into your account, and then you can transfer it to a linked bank account. This is one of the simplest and most secure ways to cash out your cryptocurrency, but it requires you to pay fees to a platform and use its platform.
- Peer-to-Peer crypto exchange: Peer-to-peer (P2P) uses a decentralized platform so that two individuals can swap assets at an agreed-upon price either for a currency or cryptocurrency. The platform acts as a middleman, swapping the goods seamlessly for a transaction fee.
- Direct from a wallet: Some platforms such as Trezor and Ledger let you sell directly from your crypto wallet for fiat as long as you use their interface. The downside is they only buy Bitcoin at this time.
What are hosted wallets?
A hosted wallet is currently the most popular and easy-to-use crypto wallet. When you buy cryptocurrency through an app, you are using a hosted wallet.
This means that a third party is actually holding the crypto for you. You are using an account to trade the cryptocurrency through their platform. It is similar to how a bank holds and transfers money for you. The benefit is that the host is providing security for your accounts and creating the platform that you are trading on. The downside is that all your transactions may be tracked and if the host gets hacked your information could theoretically be leaked.
What are self-custody wallets?
Self-custody wallets give you complete control over your crypto wallet. This means that you are responsible for your private and public keys as well as making sure your transactions are secure. The benefit is increased freedom with your trading and assets but the cost is that you are responsible if your computer gets hacked. You can also be potentially scammed while using other platforms to buy, sell or trade.
Once you pick the best crypto wallet for you, purchase and sell cryptocurrency on the top crypto exchanges.
Compare the best crypto exchanges