Types of wallets for storing Ethereum. Pros and cons. Skip to content

The best wallets for storing Ethereum

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If you plan to buy or send Ethereum, you will need a wallet to store this cryptocurrency. In this article, we will tell you what types of wallets exist, what their differences are, and what tasks they are best suited for. 

Software wallets

A cryptocurrency wallet has little in common with a cash wallet. It stores only private keys and tools for tracking the balance and making transactions. Therefore, a crypto wallet is more like a door to the respective blockchain. Software wallets are applications for browsers, computers, or mobile devices.

Functions. Software wallets have constant access to the Internet. In addition to the interface for interaction with the blockchain, they can be embedded with various tools or third-party services, for example, for interacting with DApps.

Usage. It is safer to access the software wallet from the computer where it is installed. This method is suitable for those who are going to work with cryptocurrency in a permanent place with a trusted network. This can be a home computer with personal Wi-Fi.

Differences from other types. Vulnerability of software wallets may be related to network connectivity. If your computer is hacked, you may lose all your funds.

Examples. MyEtherWallet is one of the first Ethereum wallets. The user receives a private key, a public wallet address, access to the smartphone app and browser extension. All these tools allow you to manage not only ETH tokens, but also ERC20 or ERC-721 tokens.

MetaMask is a wallet that works as extensions for browsers and mobile apps on iOS and Android. MetaMask is a «bridge» for managing multiple accounts in other wallets, such as MyEtherWallet. In addition, the wallet is integrated with major cryptocurrency exchanges and DeFi services.

Hardware wallets

Hardware wallets are physical media in the form of a USB key. The gadget looks like a flash drive and works without Internet connection. This is one of the safest ways to make transactions with cryptocurrencies. Getting access to coins on a hardware wallet is not easy. To do this, you will not only need to enter the password, but also connect the device itself to the computer.

Functions.  Hardware wallets are connected via the USB connector. On some models, there is a screen that visualizes the data that the user needs. It is often possible to set a PIN code on hardware wallets. So the gadget can not be used by intruders if it is stolen.

Usage. This storage option is suitable if you do not make transactions often and consider Ethereum as means of saving.

Differences from other types. Unlike software wallets, offline devices cannot be accessed over the Internet. The disadvantage of this method is the need to independently check for updates and test the device for failures.

Examples. Trezor was one of the first offline solutions for cryptocurrencies. The developers claim that you can safely use the gadget even when connected to a computer infected with malware. The device offers thermal and water resistance.

Ledger offers two main products: the more budget-friendly Ledger Nano S and the more expensive Ledger Nano X. With both wallets, you can store almost all existing digital coins (more than 1500 overall). The main difference between these products is that Ledger Nano X has Bluetooth, a battery, and more memory.

Internal wallets of trading platforms

A crypto exchange account can also be considered a wallet. The only difference is that the user sees only the public address of the wallet, and does not have the private key. As long as the funds are on the platform, they are under the control and responsibility of the administration. Therefore, you should only choose reliable sites to work with.

Functions. In addition to storing Ethereum, you can immediately change it, buy, sell and withdraw it.

Usage. Most traders use this solution, as they need to get access to funds frequently and quickly. It is also suitable for novice users who find it difficult to independently ensure proper security of their wallet.

Differences from other types. For such an online wallet, you do not need to install any software on your computer. If you have access to the Internet, you can access it from any device anywhere in the world. It should be understood that this makes them more risky for storing cryptocurrencies compared to any offline option.

Examples. Binance is the largest cryptocurrency exchange by turnover. In addition to Ethereum, you can work with hundreds of other cryptocurrencies.

Bitzlato is not an ordinary exchange, but also a P2P exchange where you can exchange cryptocurrency directly with other users. Among others, the platform uses its own RUBM stablecoin.

Conclusion

Now you know what to pay attention to when choosing an Ethereum wallet. We looked at the differences between the main storage methods using MyEtherWallet, MetaMask, Trezor, Ledger, Binance, and Bitzlato as examples.

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