Ethereum wallets: How to choose one
Ethereum’s cryptocurrency, Ether (ETH), works just like any other crypto. In order to trade it for other crypto and fiat currencies and use it to purchase things, you should have a proper wallet where you can
keep your cryptos. If you’ve used e-wallets such as PayPal, then you’re familiar with how these things work. Still, there are a couple of substantial differences between online wallets and crypto wallets.
In case you haven’t used any kind of e-wallet/crypto wallet, let’s give a quick overview of how to make transactions using one. Naturally, we will use an Ethereum wallet as an example, after which we will discuss how to select a wallet that will suit your needs.
How crypto wallets and e-wallets work
Crypto wallets and e-wallets have one thing in common – they’re pieces of software that people use to store their money. E-wallets such as PayPal can be loaded with fiat currencies and used for various purposes such as making online purchases.
However, things get a bit more complicated when it comes to crypto wallets. All of them have so-called public addresses. These work just like email addresses. You don’t use them to exchange emails with your
friends and colleagues but rather to send and receive Ether. These addresses are usually random strings of characters that you need to share with someone who wants to make a payment to your wallet.
Any wallet also has something called a private key, which is simply a password the wallet owner should remember to unlock their coins. The name itself suggests that you shouldn’t reveal your private key to anyone. Just think of it as a credit card number: it should be kept secret at all costs.
Get some Ether
Before you select a wallet, you first need to get some Ether, and the best way to do so is to buy it from an online cryptocurrency exchange. Many of these platforms allow you to use fiat currency to buy crypto, which is then transferred to your account on the exchange. Once you have a balance on your exchange account, you will have to choose an online Ethereum wallet to store your Ether in. Let’s now take a closer look at how to choose one.
Different types of wallets
We mentioned earlier that a crypto wallet is usually a piece of software. The truth is, there are many types of wallets you can use to store your Ether, and some of them aren’t software at all. There are also
hardware and paper wallets. Sure, all of this sounds confusing right now. You’ll get a clearer picture in a moment. Read on!
Two most important types of wallets: Hot and cold
Essentially, hot wallets store all keys on the web so you can access your funds whenever you’re online. However, hot wallets come with certain disadvantages as well. Since they are online, hackers can easily
steal your keys and thus money.
Paper wallets: A special type of cold wallet
A paper wallet sounds a bit odd, doesn’t it? How does paper fit into all of this? A paper wallet is a type of cold wallet that’s basically just a piece of paper that has all the important keys written on it. This is one of the safest ways to store your funds, as paper wallets keep your crypto completely safe from cyber attacks. There’s a problem with paper wallets, though: they’re easy to lose, and you can say goodbye to your Ether if you can’t access it. Paper wallets are easily created; all you have to do is use
dedicated software to print one. That also means you can delete all the data about your crypto funds from your computer!
One of the easiest ways to create a paper wallet is to use the MyEtherWallet service.
Crypto wallets on mobile: Using Ether on the go
Mobile wallets sound like something we should have invented years ago. These are basically apps that store your Ether. They can be useful as a type of hot wallet, which means keys to your wallet are not as safe as houses. As previously mentioned, there are good and bad things when it comes to hot wallets, but the ultimate advantage is that a mobile wallet is on your phone and accessible at any time. There are dozens of mobile wallets. Just find one that is suitable for your mobile platform (Android, iOS, etc.). Among mobile wallets that support Ether are Jaxx, Coinomi, Trust Wallet.
Wallets for your desktop
You can also install an Ethereum wallet on your computer. There are two options here. The first is to download the entire client, which means downloading the entire Ethereum blockchain. This turns your computer into a node that validates all transactions by itself. No need to get too technical: all you need to know is that the full client takes a lot of space, but it’s the safer option. The second option is to download a light client, which is a standard wallet that stores your Ether. It’s easier to use but less
secure. There’s a wide range of such wallets available – Exodus, Mist, Atomic Wallet, etc.
Last but not least: Web wallets
Finally, if you’re comfortable with the fact that your keys are stored on a remote server, you can always opt for a web wallet, which is usually browser-based and can be easily accessed from any corner of the
earth. Practically, all crypto exchanges offer an option of online wallet. However, storing your keys on a third-party server means risking it all, since phishing scams, cyber attacks, and other dangers lurk around
the corner. Now that you know more about Ethereum wallets, it’s time to pick one that might be the best choice for you. Mind, however, that the world of cryptocurrency is lucrative for hackers, and they are always
looking for ways to deprive you of hard-earned money. So, take advanced security measures to protect your Ether funds.