Cryptocurrencies like bitcoin have been around for over a decade, but in recent years they have gone from being niche investments to becoming mainstream. Companies like Microsoft, AT&T, Starbucks, Whole Foods, and Paypal are now accepting Bitcoin and other virtual assets as payment methods, and despite several price swings in 2021, as of December 2021, Bitcoin’s price has surged above $53,000.
If you want to invest in cryptocurrencies like Bitcoin, Ethereum or Litecoin, you need to select an investment app like Coinbase, Binance, FTX, Kraken and Robinhood which allows you to buy cryptocurrencies and wallet stores and secures your private key code to access your assets.
In this article, we will discuss what a crypto wallet is, the types of crypto wallets and the best mobile wallets for storing crypto in 2022.
What is a Crypto Wallet?
A Crypto wallet stores your digital assets and verifies your transactions when you spend them. The Wallets contain secret information called a private key or seed that is used to verify and “sign” transactions so your crypto can be used to buy or exchange another asset. This prevents others from using your crypto or transactions from being altered by third parties.
When people refer to crypto wallets, they are usually referring to cryptocurrency exchanges that offer wallets as part of their account functionality. In this sense, a wallet is where all your cryptocurrencies are kept, or where you can store fiat currencies for future use.
Types of Cryptocurrency Wallets
- Hot Wallets: These types of wallets use keys that are created or stored on a device with internet access. Hot wallets have high utility but are generally considered less secure than cold wallets. These wallets should not be used for large sums of money.
- Cold Wallets: From a Ledger Nano X to a piece of scrap paper, a cold wallet is any method of permanently storing your private keys offline. This ensures the highest level of security for large amounts of money that are not intended for further use.
- Exchange Wallets: Cryptocurrency exchanges typically keep your assets in cold storage wallets. While this is handy for small funds and for those who have yet to find an alternative wallet, it means you are handing over your assets to a potentially malicious central entity. Best practice requires moving assets from your preferred exchange to your own hot or cold wallet as quickly as possible.
- Custodial Wallets: Some institutions with huge holdings are reluctant to be pressured to protect their assets, so they pay someone to do it for them. Custodial wallets are managed by a trusted third party and are highly insured. This allows agencies to be confident that they are covered in the event of an outage and allows world-class security professionals to benefit from their skills.
How Do Crypto Wallets Work?
The blockchain is a shared public ledger and all crypto transactions are conducted by crypto wallets. When a transaction takes place, value is transferred between multiple crypto wallets. Often a single party will exchange some value of bitcoin for another asset or service with another crypto wallet.
In this case, each crypto wallet uses its secret data to sign and verify transactions, providing mathematical proof that the buyer or seller owns their crypto wallet. Your wallet can safely hold as many cryptos as you want without any restrictions.
The Best Mobile Wallets to Safely Store your Crypto in 2022
- Coinbase: Coinbase Wallet is a good place to start. It can be downloaded as an Android or iOS app, has an intuitive interface, and the wallet is fully integrated with the company’s exchange for easy transactions – including buying coins and tokens with traditional currencies.
Unlike the company’s exchange, Coinbase Wallet is non-custodial; this means that only you have access to your wallet’s private key, which was generated when you logged in with a 12-word recovery phrase. Note that there is a difference between storing your cryptocurrency on the Coinbase exchange (custodial) and wallet (non-custodial). But the integration between them makes it pretty easy to move money back and forth.
- Exodus: Exodus is a hot wallet, meaning your assets are stored online but not in custody, meaning only you have access to your private key – a 12-word passphrase that encrypts your access to assets.
The Exodus wallet is designed to run on Mac, Windows, and Linux computers, but has a companion app for Android and iOS devices. The desktop user interface is simple and easy to learn. Your wallet is seamlessly integrated with the Exodus exchange, making trading easy.
Exodus supports over 130 cryptocurrencies including Bitcoin, Ethereum, Tether USD and Dogecoin.
- The version of the app allows buying bitcoins with US dollars. Once you have assets in your wallet, you can easily exchange them for other supported assets. While the wallet itself is free to use, Exodus charges fees for transactions made through its exchange.
- Metamask: Metamask is available on both mobile devices and as a browser extension. The company offers private key storage, secure login, token wallets, and token swaps that allow you to buy, send, or exchange tokens. However, Metamask mainly supports Ethereum (ETH) and ERC tokens.
- Guarda: Available on desktop and mobile, Guarda is a non-custodial crypto wallet (meaning you and only you retain full ownership of your private keys and crypto assets) that gives users access to multiple competing features. These include instant crypto exchanges of 50+ tokens, staking with up to 25% annual returns, and staking rewards of up to 7.73% in Ethereum. However, if you want to swap assets, you must be prepared to pay a small service fee.
- Trust Wallet: Unlike the other wallets mentioned above, the Trust wallet is intended for mobile storage only. If you have a smartphone, you can download the wallet to your iOS or Android device. While you can store, buy and trade cryptocurrencies with Trust, you can also earn up to 130% APR from crypto staking. But wallets might not be the best choice for desktop users.
- Blockchain: Blockchain is a hot wallet that offers online encryption, giving you full custody of your crypto assets. The wallet also features a blockchain data API, encrypted data charts, interest-bearing accounts, and real-time crypto prices. You can hold or trade Bitcoin, Ethereum, etc., but there is a limit to the total number of assets a company can trade.
- Gemini: The Gemini is an industry-leading crypto exchange for mobile and PC users. You can track real-time asset prices and market prices anytime, anywhere.
The app makes it easy to set up price alerts so you can react quickly to individual asset price movements. If you want to steadily increase your cryptocurrency holdings while averaging the purchase price, you can schedule regular purchases of Bitcoin and other cryptocurrencies. Gemini has excellent cybersecurity and hosting solutions.
- Crypto.com: Crypto.com’s DeFi wallet is a non-custodial wallet that gives you access to a full suite of DeFi services in one place. You also have full control over your passwords and keys and can easily manage over 100 coins.
It’s easy to count your existing wallet and you can send cryptocurrencies with the confirmation speed and network fees you want. Additionally, crypto.com’s simplified web app allows you to farm and exchange DeFi tokens directly from your DeFi wallet.