When it comes to Ethereum (as well as other cryptos), your “wallet” is your access to the coins or tokens you own. It’s important to choose a safe wallet option to protect your investment.
Information current as of May 2024.
What are Ethereum wallets and where can you use them?
A cryptocurrency wallet is a digital place to store your coins – in this case, ETH. When you buy cryptocurrency, you need a place to put it. That’s what a wallet is for.
There are many different types of Ethereum wallets, but they all do essentially the same thing. Differences come down to security, convenience, and features.
Just like a physical wallet stores your cash and cards, a wallet for Ethereum stores your cryptocurrency. You can then use your ETH to buy things, store it as an investment, or send it to other people.
How do wallets for Ethereum work?
Wallets for Ethereum work by storing your private and public keys. These keys give you access to your coins. The public key is like your wallet address. It’s what you give to someone so they can send you cryptocurrency. The private key is like your password. It’s what you use to access your wallet and make transactions.
When you want to make a transaction, you use your private key to sign it. This proves that you own the coins you’re trying to spend. Then, the transaction is sent to the blockchain to be verified – other people on the network verify it using your public key and information about your previous transaction.
Your private key guarantees the safety of your coins. If someone knows it, they will have access to your wallet. So it’s extremely important to keep your key a secret.
How to choose a safe wallet for Ethereum?
There are two main types of cryptocurrency wallets: hot wallets and cold wallets. Hot wallets are online wallets that are always connected to the internet. Cold wallets are offline, whether temporarily (through a device that could be connected, but it’s currently not) or permanently (some people use devices with a removed network card).
Hot wallets are more convenient to use because they’re always accessible. However, they’re also more vulnerable to hacking because they’re connected to the internet.
Cold wallets, on the other hand, are a lot less handy to use because you have to physically connect them to a computer to use them. But, it’s a safety trade-off. Because they’re not connected to the internet, cold wallets are out-of-reach for hackers and other less-than-friendly people online.
Level of expertise
There are ways to make an incredibly secure, offline wallet. Are they viable for people who are just getting into cryptocurrency? No, not really. For the vast majority of people, an online wallet is going to be the best option.
You could argue that a cold wallet is more secure, and you would be right. But, the trade-off is that they’re also a lot harder to use. If you’re just getting started, the last thing you want is to have to go through a complicated process just to access your coins.
When you’re a more experienced crypto investor, you will probably want to transfer your coins to a cold wallet. At first, it’s better to use a hot wallet. It’s just more convenient, especially when you want to spend your crypto.
Keeping your seed phrase safe
A twelve-word seed phrase aids you in reaching your wallet in the event of losing your private key.
It’s provided to you only when you create your wallet and acts as your fail-safe mechanism. Make sure to jot it down somewhere safe. It helps to recover your coins if you lose your private key.
We recommend to write it down on paper for better security. It’s wise to have copies stashed in different spots just in case. Make sure you never share it with anyone or you risk losing your coins.
Check the T&C
Depending on what you’ll be using your crypto for, you might want to make sure that your wallet is allowed to do that.
For example, some wallets for Ethereum will block transactions to casinos (yes, even if it is a reputable, licensed online casino). So, if you’re planning on using your crypto to gamble online, make sure your wallet can do that.
The same goes for any other activity you might want to do with your coins. Checking the Terms & Conditions of your wallet before you create it will save you a lot of headaches down the road.
Best Ethereum wallets to use
What are the top Ethereum wallets?
MyEtherWallet (MEW)
Usually, MyEtherWallet is used as an online hot wallet. It allows users to receive, store and send Ether. With MEW you can backup your ether or token with a mnemonic seed or as a paper wallet.
Thanks to its combination of easy use, independence from third parties and a wide range of functionalities MEW has become a top wallet for Ethereum.
Metamask
MetaMask is the perfect example of a hot wallet and one of the best wallets for Ethereum altogether. It’s a good choice for ETH and here is why:
- it’s easy to use, but fulfills basic functions well;
- free to download;
- works on both mobile and desktop.
All of these make it the best option for beginners.
Trezor and Ledger
Trezor and Ledger are two of the most popular cold wallets for Ethereum among the community. However, some people simply choose to use an old USB or a computer with the network card taken out.
Final thoughts
With the tips in this article, you should be able to choose a safe ETH wallet for your needs. Just remember to:
- Consider what you’ll be using your ETH for. If you’re just getting started, a hot wallet for Ethereum like MetaMusk is going to be the best option.
- Look for a wallet with strong security features, like 2-factor authentication.
- Store your seed phrase in a safe place. You’ll need it if you lose your private keys.
