Traders and investors can do little in the world of cryptocurrency without a good digital wallet.
Crypto enthusiasts need a wallet to buy, hold, and sell their coins, tokens and NFTs.
Out of the hundreds available, iExpats has looked at some of those labelled the best and in no particular order, here are a few we considered lived up to their praises.
Hopefully, they will safeguard your crypto holdings and help make managing a portfolio easier.
Table of contents
- What Is A Digital Wallet?
- Our Favourite Digital Wallets
- Why Do I Need A Crypto Wallet?
- Our Favourite Crypto Wallet FAQ
- Related Information
What Is A Digital Wallet?
A digital or electronic wallet is a software program that stores encrypted financial and personal data relating to cryptocurrency. The software runs on smartphones, tablets and other computers.
Most digital wallets can handle several cryptocurrencies and connect with dApps (decentralised applications). dApps are blockchain-based financial apps.
Our Favourite Digital Wallets
This list is based on the preferences of iExpats staff. The aim is to give a starting point for researching digital wallets, and should not be taken as a recommendation.
Mycelium is one of the early digital wallets and is considered a step up from a basic entry tool. One of the favoured features is the ability to set transaction fees to hold a payment until the required fee is reached on the Bitcoin and Ethereum blockchains. Mycelium supports Bitcoin, Ether and ERC-20 based NFTs. Another much-liked feature was Mycelium’s connectivity with offline storage. Less confident users can benefit from a huge range of support available online.
A digital wallet aimed at investing expats at any stage of their cryptocurrency adventure. Sporting an intuitive design, the smartphone app from financial firm deVere Group has been downloaded thousands of times. Crypto links with more than ten popular cryptocurrencies, including Bitcoin and Ether. Users can switch from fiat currencies, like US dollars and the UK Pound, to cryptocurrency. Crypto connects with the leading exchange Kraken.
If you are worried about protecting your crypto assets, then Trezor is the wallet for you. Trezor has some of the strongest digital wallet security features. Reviewers point out that the charge for using Trezor doesn’t outweigh the benefit of extra features if you do not use them. Trezor does support nearly 2,000 cryptocurrencies – practically everyone on the market. However, new users report some issues configuring the wallet, especially with the touch screen interface.
Exodus is an entry-level digital wallet with a choice of linking to 150 cryptocurrencies and a built-in exchange. However, intermediate or advanced users may find the software too simplistic with a lack of feature choice. These users may find Trezor a better wallet option. A winning feature for Exodus is helpful support to aid beginners in their cryptocurrency journey. The wallet is available for desktop computers and smartphones.
Ledger Nano X
A digital wallet that connects to secure cold storage that also connects to up to 20 apps at once. Critics argue the wallet’s Bluetooth ability is not yet fully perfected, which could leave the wallet open to attacks from hackers. Ledger lost data to hackers in July 2020, which did not put personal keys at risk but allowed the theft of other user data. The Nano’s predecessor, the Ledger Nano S was one of the first wallets to market and led the sector for some time.
Ledger Nano S
Old but still functional wallet technology without Bluetooth and limited to storing three dApps. As a former market leader, the Nano S links with more than 1,800 cryptocurrencies. Storage is limited if you have a large crypto portfolio. The Ledger Live software is a breeze to use for beginners by smartphone or desktop computer, but more experienced investors and traders will find the technology limitations an issue. Ideal for new investors seeking easy, no-hassle storage of a few cryptocurrencies.
Electrum is a one-trick pony designed to do one job well – manage Bitcoin investments. The strip-backed, intuitive interface probably attracts more advanced crypto traders and investors due to the high-end functionality. Electrum comes with custom fees and optional security levels most useful to traders. Other drawbacks are Electrum only connects with Bitcoin, and user support is scarce if not impossible to find. As the crypto market expands, users will find Electrum’s constraints too much of a limit.
Why Do I Need A Crypto Wallet?
A cryptocurrency wallet gives investors and traders a direct connection to the blockchains of their chosen coins or tokens. When a transfer of a coin or token’s ownership occurs, the blockchain automatically updates the wallets of all parties concerned.
Bitcoin wallets can hold as much of the cryptocurrency as you like.
Storing cryptocurrency is free, although buying and selling may attract fees. A setting to customise the fees is important to traders making lots of transactions. The setting allows them to hold fees until the network is quieter and the charges reduce, making transfers cheaper.
Many exchanges offer wallets as part of the service, with the cost swallowed in a monthly fixed administration fee.
Another point to watch is when owners can draw their money in cash after a cryptocurrency transaction. Each wallet has specific rules about when fiat cash is transferred, so make sure you know the limits of your wallet before drawing down.
The average downtime is three days between carrying out a crypto transfer and converting the value to hard cash.
Our Favourite Crypto Wallet FAQ
What is a fiat currency?
Fiat currency is a government-backed currency that is not backed by another asset, such as gold, but a promise by the issuing government to honour the face value of the coin or note. A fiat currency is recognised as a country’s legal tender. Although many governments recognise cryptocurrency as a commodity, few have adapted one as legal tender.
What is hot and cold wallet storage?
Wallet storage can be hot – online all the time – or cold – kept on an offline device. Cold storage is preferred by many as the data is only open to hackers while the drive is connected to an internet-enabled device. Hot storage is available all the time. The best security is cold storage, providing software and passwords are kept up-to-date.
Can I store NFTs in a digital wallet?
A crypto wallet will handle buying, selling and holding NFTs (non-fungible tokens).
How do I choose a digital wallet?
You should consider four factors:
- Wallet security
Security allows you to keep your investments safe. Ease-of-use makes investing less of a hassle. You also need to make sure the wallet includes the features you need and is compatible with the cryptocurrency you wish to trade.
Can I use a wallet without linking to an exchange?
No. You must link to an exchange. Both services refer to different jobs:
- A wallet is a storage device for cryptocurrency investments
- An exchange is a platform for buying and selling coins and tokens
Some wallets come with integrated exchanges, while some exchanges offer their own white-label wallets.
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