For many people, the cryptocurrency market has recently become closer – many online and offline stores, travel agencies and entertainment centers accept cryptocurrency, which attracts not only young people but also adults. However, not everyone knows how to work with cryptocurrency, in particular how to store it. In this article, you will learn about what a crypto wallet is and the best crypto wallets for beginners. If you regularly conduct transactions with cryptocurrency and currencies, we recommend the Rates.fm service to track currency exchange rates in Ukrainian financial institutions.
What Is a Cryptocurrency Wallet?
Just as we are used to keeping traditional money in bank accounts or payment cards (for example, Bank of America’s Visa and Mastercard), cryptocurrency is also stored in special accounts. There are three most popular ways to save it:
- cryptocurrency exchanges,
- hardware wallets,
- cryptocurrency electronic wallets.
Cryptocurrency exchanges, as a rule, are created primarily for active trading. This is exactly what all their instruments with complex charts, the ability to trade with leverage, etc. are designed for. This method of holding assets is optimal for those who plan to constantly buy or sell crypto.
At the same time, there is a risk here. The cryptocurrency of all clients on the exchange, as a rule, is stored in a single place, and the service only registers who has and how much money. In fact, the exchange has access to these funds. Usually, this does not create problems, but there are cases like the bankruptcy of one of the world’s largest exchanges, FTX when its leaders caused billions in losses to users.
Hardware wallets are special devices that provide access to the user’s account on the blockchain. This is the most reliable way to store cryptocurrency, because without a device no one will be able to access the funds, and it is virtually impossible to block the blockchain. Therefore, when large amounts, such as hundreds of thousands of dollars, are stored in crypto, it is best to use hardware wallets. At the same time, they are inconvenient for everyday use, cryptocurrency cannot be quickly sold or purchased, and worst of all, such a wallet can be lost along with all the funds on it.
Cryptocurrency e-wallets combine the advantages of the two previous tools. These are special applications that are installed on a mobile phone or computer and provide access to individual cryptocurrency accounts. On the one hand, in this case, the funds are better protected than on the exchange, on the other hand, access to them is constantly maintained. If you lose your phone or computer, such a wallet can be restored on a new device, and such wallets provide reliable protection against intruders.
Trust Wallet
This wallet is considered the most popular in the world – about 25 million people use it. It was developed by the Binance crypto exchange and is therefore integrated with some of its services.
One of the advantages of Trust Wallet is its support for a large number of blockchain systems, there are 65 of them, including the most popular Bitcoin, Ethereum, Solana, Cardano, etc. Accordingly, tokens created in these systems can be stored in the wallet.
This wallet is non-custodial, which means that it does not store its clients’ passwords on its own. Therefore, you need to be as careful as possible when registering. When you open an account, Trust Wallet will give you a seed phrase – a combination of 12 random words. These words need to be rewritten and stored securely. Since Trust Wallet is integrated with Binance, you can buy currency directly from that exchange, but a number of third-party exchangers are also available.
MetaMask
This is another global player in the cryptocurrency wallet market. The wallet is designed specifically to work with networks based on Ethereum, including, in particular, BNB, Polygon, etc., but it does not support Bitcoin. Accordingly, it can neither be purchased nor stored in it. Therefore, MetaMask is most often used as a link between decentralized services.
Thanks to MetaMask, it is convenient to connect to services that use cryptocurrencies for payments in games, auctions, etc. The wallet gained particular popularity during the peak of interest in NFTs, which were purchased mainly for Ethereum.
MetaMask only recently introduced the function of selling cryptocurrency for fiat money (USD or EUR) and it only works in a limited number of countries. Therefore, it is better to use a wallet for transferring cryptocurrency, but not for traditional investments.
Coinbase Wallet
This is another wallet owned by one of the largest crypto exchanges – Coinbase from the USA.
Like MetaMask, it can be either in the form of a mobile application or a special plug-in for the browser, but the developers gave preference to using it on a smartphone.
This wallet is also perceived primarily as a passport to the world of decentralized services. Coinbase Wallet supports a large number of coins created on the Ethereum network; Bitcoin cannot be stored here.
Since Coinbase Wallet is associated with the exchange of the same name, it is designed for simple transfer of assets from it, but it is not necessary to be its client – crypto can be transferred from other exchanges or wallets or purchased directly on it.
One of the key advantages of the wallet is its stylish design and the ability to hold your NFT collection directly in it, which improves the appearance.
Conclusion
For beginners who are just discovering the world of fintech, including the use of cryptocurrencies, it is better to use the wallet that is most understandable for them and supports convenient methods of payment and withdrawal of funds. For the best experience in converting and working with currencies, we recommend using the Rates service to track currency exchange rates in Ukrainian banking institutions. The service is available 24 hours a day, no matter where you are in Toronto or New York.