We talked about the importance of security in cryptocurrency custody a few days ago here. But what kind of wallets can we choose amongst?
I am going to use some parameters to elaborate this comparison such as usability, safety, easiness of recovery (in case of default or insolvency) and variety of cryptocurrencies on a scale from 1 to 5.
Let’s start from the easiest ones, that are not exactly wallets.
I am referring to the Exchanges. “Not your private keys, not your money”
Many people consider Exchanges like wallets, leaving cryptocurrencies on them for good. Exchanges are not suggested for long term holding since Exchanges are centralized platforms and potentially any moment may be good for them to default and disappear.
Usability: 5
Safety: 3
Recovery: 1
Variety of cryptocurrencies: 5
They are really crypto friendly and if you think to COINBASE or BINANCE you can even save your access data in the Browser to access really quickly.
Safety is not at the top, since the infrastructure has been created via a centralized code and many different exchanges (Binance, Cryptopia, Kucoin) have suffered losses in the last years.
Recovery of funds is impossible since in the case of a robbery or a default of the company that owns the exchange, funds are usually lost for good. Clear examples is QuadrigaCX (default) and Cryptopia (big amount of stolen money).
Exchanges have usually the highest number of markets that allow you to buy different cryptocurrencies.
Desktop wallets
They are very useful and actually they are among the most versatile.
The most famous is Exodus, but we have others, like TronWallet, Electrum, Atomic Wallet.
Safety of Desktop Wallets can be mined from malwares that breaches into your computer. To prevent malwares, stay away from suspicious websites, do not click on links contained into unidentified emails and other basic attention you should pay to your computer’s safety, not only your wallets’.
We must make some differences here. EXODUS does not have an open source code and if it closes up, your fund recovery will not be guaranteed. So, here is an evaluation for Exodus
Usability: 5
Safety: 3
Recovery: 1
Variety of cryptocurrencies: 5
I gave to Exodus the same evaluation of the exchange, since the risks involved and safety parameters are almost equivalent.
Tron Wallet and ELECTRUM are dedicated respectively to TRX ecosystem tokens and Bitcoin. They are decentralized, you own your private keys, and your funds will always be safe and recoverable if those wallets may close up.
Usability: 4
Safety: 5
Recovery: 5
Variety of cryptocurrencies: 1
Atomic Wallet is another Desktop wallet, that allows more than 300 cryptocurrencies, but you will own private keys and your funds will be 100% recoverable.
Usability: 4
Safety: 5
Recovery: 5
Variety of cryptocurrencies: 4
So, Desktop wallet is a big and diversified family but not all the Desktop wallets are equivalent. Atomic Wallet in my opinion is the best representative of the class.
Online Wallet
Online wallets are not (IMHO) the most reliable and safe, despite you use a Browser that does not allow all the savage advertisements and makes your navigation safer.
Among the online wallets, we have MyEtherWallet, blockchain.com and some others.
Yet here we must create the distinction between centralized and decentralized. MEW is a decentralized wallet, where you can get access via Private Key, JSON file and 12 words Seed Phrase recovery. Blockchain.com instead is a centralized wallet, where you can get access via email and password and inside, you will find a secret key that if shared, will allow the new owner to change access data and cut you out from wallet possession.
Be careful: if you create your wallet on MEW, you may encounter compatibility troubles with BRAVE Browser (use Chrome instead).
Be careful: I have been contacted by a scammer that tried to scam my money making me believe to have my money safe even giving the Secret Key to him on Blockchain.com. What made me suspicious was his insistence for doing the “trick” on that exact wallet, while I was provoking him to use another wallet (native and decentralized instead).
MyEtherWallet
Usability: 4
Safety: 5
Recovery: 5
Variety of cryptocurrencies: 3 (ETH + all Ethereum blockchain based tokens)
Blockchain.com
Usability: 5
Safety: 3
Recovery: 3
Variety of cryptocurrencies: 4
Hardware wallets
You have LEDGER and Trezor. I prefer Ledger than Trezor: historically Ledger encountered less cyber fails than Trezor. They both can keep a lot of different currencies and there are two main advantages if compared to online and desktop wallets. The first is that the security standards of the “keys” are really high and will not depend on anti-virus and browser used for surfing the web and purchasing cryptocurrencies.
The second advantage is that they are called “Cold Storages”, meaning that they spend the most part of the time offline, without possibilities of hacks or steals.
This is a key feature if you think that the most part of the time your money will be untouchable.
If you loose or destroy your Ledger Nano, via your Seed Phrase you can recover your cryptocurrencies on another Ledger device.
Ledger Nano
Usability: 4
Safety: 5
Recovery: 5
Variety of cryptocurrencies: 5
Keep your money safe and stay safe!
