Newcomers to blockchain generally understand that they need storage for their digital currency. A quick Google search reveals innumerable wallet options, from online, desktop and hardware options; some hot and some cold. Some are token-specific and others are modestly accommodating, while others offer vastly more diverse storage.
Choosing a wallet specifically for Ethereum enthusiasts can be tricky, as there are indeed innumerable options, even for ETH. The list below is far from exhaustive, but here follows a few great options for users passionate about their ether.
The prime consideration in the realm of non-refundable stolen money is: security. Any wallet option is always a balance between ease of use and security. Savvy users will opt for a cold vault or wallet and a hot wallet option. This is accepted as the current level best option to have the best of both worlds.
Hot And Cold Wallets
All cryptocurrency wallets have a basic construct of private and public keys. Public keys are like a user’s bank account, and can be freely sent to anyone paying that address. Private keys that are safeguarded in a number of ways are known only to a user and never given out. This two-part authentication or validation is intrinsic to all wallets.
A hot wallet can be an online wallet, a desktop wallet or a dapp. All of these sit behind a device’s firewall – the phone or PC’s security is all that stands between a user’s funds being secure or lost. A cold wallet can be a desktop wallet installed on a standby, disconnected machine or a hardware device.
A hot wallet is typically a user’s exchange wallet. Hot wallets should only ever contain a small percentage of digital assets, with the remainder being stored offline or cold. Cold wallet apps offer heightened security in a variety of ways, but simply put, while they can obviously be linked to a hot wallet to enable transacting, they are fundamentally “offline.”
Hardware wallets are rapidly becoming the ultimate definition of a cold wallet. Portable and highly secure, they can still suffer loss or damage, but cannot be accessed by anyone except the owner. In the event of loss, theft or breakage, a user’s funds remain safe.
What’s Important In Choosing A Wallet?
There are three broad considerations for users in choosing a wallet. Top of the list must be security. Cyber criminals are loving blockchain as often as they’re defeated by it. Since cryptocurrency cannot be refunded even if demonstrably stolen, the pickings are potentially high. Security is tight overall and all wallets anticipate attack in some way and guard against it, but once stolen, funds are lost forever. Hence security’s dominance among considerations for wallet users.
Accessibility and usability together form a second criterion for the average user. Will funds be accessed on the go? A user may be day trading, which requires some liquidity in a hot wallet, or might even be thoroughly disinterested in exchanges and merely want to HODL some virtual cash. The final consideration is typically pricing, with quite a variance between available offers.
It’s sometimes a juggle to marry user requirements, wallet form and price, but the current mantra is to preferably over-spec on a wallet, rather than compromise on desires. For example, if a user is using their hardware wallet only a few times a year, they might wonder if it’s a necessary choice. Again, most users have both a hot and cold facility, but the lean should always be towards ultra-tight security. The more secure, the better.
Loyal users of MyEtherWallet value this wallet’s build, where users have complete control of private keys on their own devices. The wallet runs on smart contracts, is known to be highly secure and also is an in-house offering. In other words, the wallet never runs on third party servers but remains within a truly closed user group.
Those who vote for it point to its ease of digital coin exchange and compatibility with many other software wallets, no small consideration for active users. With that said, MEW is a hot wallet, and there are stories of users being compromised using this option.
Another hot wallet option, the Mist wallet is pitched online as an “official Ethereum wallet.” There is a small window needed to install the wallet and this sometimes frustrates users. The project is closely aligned with all things Ethereum and so makes a logical choice for many users.
With this wallet, the only access is through a personal password, something users need to remember when transacting to and from this wallet.
The Jaxx Liberty wallet is another hot option, but a very polished and secure one at that. It also accommodates some 65 different coins, with bitcoin and ether prime among them. The wallet is free and employs seed keys, thus allowing a user access to restore funds whenever needed.
Jaxx also shines out among other wallets and exchanges for a genuinely better attempt at customer support, something not invaluable when dealing with money matters. This wallet also supports the ShapeShift exchange, something appealing to many who consider owning and trading inseparable.
This is a now well-known favorite of many, being a hot desktop wallet that has a very pleasing intuition as well as detailed security measures. Another free option, the Exodus wallet app also presents simply and elegantly.
The wallet has developed a loyal following based largely on getting its UI right first time round. The wallet will only support a handful of virtual currencies, but does incorporate the ShapeShift module in its coding, again a valued trait for active traders.
The MetaMask hot wallet has been exceptionally well-received and is gaining in popularity. In a unique take on things, the wallet employs a browser-type architecture to surf the Ethereum network like a local.
Seen by many as a wallet first and a bridge into Ethereum second, the app grants users access to a myriad of Ethereum dapps on the network.
Ledger Nano S
The first of a few cold, hardware wallet options, this particular make and model is starting to become something of a default, much like an iPhone is de rigueur elsewhere. The Ledger Nano S is seen as the best offering based on a balance of watertight security, price and elegant mobility.
The device can be inserted via any USB port and its LED display lets users double-check their transactions throughout. It is built as immune to viral attacks and malware cannot access it as it can most other digital devices. Alongside the other hardware wallets, it offers a watertight cold vault with still pleasing accessibility and affordability.
The Trezor wallet has the distinction of some years of use, having first arrived circa 2016. it carries ether perfectly and is also Windows, Mac, Linux and Android platform-compatible.
The wallet’s security hasn’t become less-than with the passage of time and, much like Bitcoin diehards point to BTC’s status as the original, so too do many loyal Trezor users. The wallet employs detailed security protocols and is a cold option, all ether and others stored completely offline.
Another contender from the same stable, the Ledger Blue is packed full of features users soon find they don’t want to live without, and it trades a lot on its more-famous cousin, the Ledger Nano S.
That said, it is a highly secure cold, hardware option that stands on its own merits. Durability, access and security meet in this option, and it fulfills many users’ needs of a hot-cold wallet setup.
It is always best to keep the vast majority of digital assets in an offline, cold wallet or vault environment. Hot wallets, ideally, are just there to transact, either in daily trading or daily consumer transacting.