The blockchain is filled with cryptocurrencies with sustainable project goals. With the meteoric rise of crypto, investors and traders are eager to acquire more knowledge about cryptocurrency. But one area most people overlook is digital wallets. That’s why it is crucial to go through this comprehensive guide to understand the fundamentals of these digital wallets, with particular attention to crypto wallets.
What is a Digital Wallet?
A digital wallet is a software/application that gives you access to your private and public keys. It conveys various blockchains to allow users to receive and send digital currency and check their balances. It’s like a bank account, but it holds cryptocurrency instead of storing fiat currency (like dollars or pounds). The same wallet can be utilized on multiple devices – so if you lose one device, you don’t lose all your money. If you want to buy cryptocurrency like Bitcoin, you must have a digital wallet.
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How does a digital wallet work?
Millions of people use digital wallets; however, many have no idea how the wallet works. Unlike traditional ‘pocket’ wallets, crypto wallets do not store currency. Cryptocurrencies do not exist physically and are not stored in a single location. The only thing that exists is transaction records stored on the blockchain.
In cryptocurrency, digital wallets software programs store your public and private keys and interface with various blockchains so users can monitor their balance, conduct operations, and send their crypto. When someone sends you digital currency, they are essentially transferring ownership of the coins to the address on your wallet.
To spend or unlock any crypto coin, the private key stored in your wallet must match the public address of the currency assigned. If the public and private keys are successfully exchanged, the balance in your digital wallet will increase, while the senders will decrease.
How to choose the best digital wallet?
Getting a digital wallet for cryptocurrency is the first step for anyone who wants to engage in cryptocurrency trading. They are the digital equivalent of a physical wallet and help store private keys to receive coins or tokens from others.
It is crucial to choose a digital wallet that is secure and suits your needs. To do so, consider the following factors:
- Security features: The best wallets oﬀer 2-factor authentication, multi-signature support, in-built exchange features, and more.
- Ease of use: Some wallets can be used without technical knowledge, while some are useful for seasoned traders.
- Multi-currency support: Choose a wallet that supports multiple currencies so that you can diversify your portfolio.
- Access to DeFi products: Some of the best wallets support on-chain lending and borrowing, which helps you earn passive crypto income by adding DeFi products to your portfolio.
- Accessibility: The best wallets oﬀer more than just private key management, including 24/7 customer support, insurance coverage, and other incentives that make it worth your while.
Best Digital Wallets
Exodus is a non-custodial wallet that oﬀers excellent support and control over crypto assets. The wallet supports Bitcoin, Ethereum, Litecoin, Dogecoin, Dash, and many other popular coins. Exodus encrypts your device’s private keys and allows you to conduct transactions with the 12-word passphrase.
The wallet also has inbuilt ShapeShift exchange integration. That means you can convert your cryptocurrencies directly within the wallet without any challenge.
Since its establishment in 2011, Electrum has been one of the wallets oﬀered free in the market. It’s a lightweight client that works on multiple platforms and supports multi-signature features. It’s also an open-source wallet, so you can review the code to ensure it does what it claims to do.
The wallet can also be helpful in cold storage mode, where you don’t have to trust any third-party service with your private keys, as the software can generate your wallet using a random number generator.
Robinhood is a mobile stock trading app that lets users buy and sell stocks free, with no minimum balance or monthly service fees.
Robinhood oﬀers trading cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and Dogecoin). Robinhood Crypto currently supports market orders and limit orders, which allow you to automatically buy or sell a crypto asset at a specified price.
Robinhood also supports cryptocurrency transfers between accounts. For example, suppose you wish to move Bitcoin from your Robinhood Crypto wallet to the Bitcoin wallet of another exchange. So, you can transfer your Bitcoin directly into the other wallet using your external address.
4. Coinbase Wallet
Coinbase Wallet is another digital wallet that gives you access to a broad spectrum of decentralized innovation – buys and store ERC-20 tokens, participate in airdrops and token sales. Also, you can collect rare digital art and other collectibles, browse decentralized apps (DApps), and send crypto to anyone around the world.
MetaMask is the most popular cryptocurrency wallet used by Ethereum traders and investors. It connects you to decentralized applications (Dapps) on the Ethereum blockchain.
MetaMask is also a browser extension that will enable you to run Ethereum dApps directly in your browser without functioning on a full Ethereum node. MetaMask includes a secure identity vault with a helpful interface for managing your identities across multiple sites and signing blockchain transactions.
Users can also use the MetaMask browser plug-in to run a digital wallet on any website they visit. MetaMask can also use it as a Chrome or Firefox extension or install it as an application on your computer or phone.
The Trezor wallet has a small OLED display that shows the receiving address and allows you to verify your transactions. The private key is storable in the oﬄine device. It has a PIN code that you can use to access the device.
Trezor Wallet was created by SatoshiLabs and launched in 2014. It was the first-ever hardware wallet, making it a highly trusted piece of hardware within the cryptocurrency community.
If you lose your Trezor, you can quickly restore it using your recovery seed on another device. You can connect the Trezor wallet with Android devices too.
Ledger Wallet is a digital wallet per se; it’s a Bitcoin hardware wallet that oﬀers maximum protection level to your cryptocurrency without sacrificing usability or control. Ledger hardware wallets give you ownership and control over your private keys.
As a multi-currency hardware wallet, Ledger oﬀers the best security features for storing your digital asset. Ledger connects to any computer using USB and embeds a secure OLED display to cross-check and confirm every transaction with a single tap.
hi wallet – Send, receive and convert cryptocurrency securely
If you want to keep your cryptocurrency in a digital wallet, you need to consider factors such as security, ease of use, trading capability, and so on. Your digital wallet should give you access to the cryptocurrency market, allowing you to exchange and withdraw currency to other exchanges.
If you’re ready to buy some crypto but aren’t sure which digital wallet to use, check out our secure and easy-to-use hi Wallet. hi.com allows you – even if you have little to no IT/Crypto experience – to use/send/receive crypto and fiat within your hi Wallet. It provides the possibility to send cryptos and ﬁat currencies within the hi app or even chat messengers – no need to install an external application.
In addition, hi.com lets you convert your cryptocurrencies at mid-market rates. This means converting freely between ﬁat and ﬁat, crypto and crypto, or ﬁat and crypto. The mid-market rate is recognized as the average between the buy and sell prices of two currencies at any time and is thus the fairest rate you can get.