The rapid growth of cryptocurrency has seen more people increasingly use it to buy products and services, swap them with other currencies, or store them for future use. Generally, these crypto wallets allow users to interact with the blockchain, which means they can view and manage their crypto assets, as well as initiate transactions. As such, multiple crypto wallets and exchanges have entered the market to provide crypto holders with these services. Today, crypto users can access dozens of bitcoin wallets to help them manage their digital assets. With the many options available, prospective crypto users may not know what types of bitcoin wallets are in the market today. This may make it hard for them to decide on what type of bitcoin wallet fits their individual needs.
In this article, we’ll break down the different types of bitcoin wallets available in the market today to help you make better choices.
The types of crypto wallets
There are mainly two types of wallets: cold wallets and hot wallets.
Cold wallets are the type of crypto wallets that are designed for cold storage of crypto assets. Cold storage here means that the wallet will store your crypto asset in an offline mode. This means cold wallets serve as vaults that you can use to carry out everyday transactions. However, some cold wallet types can connect to the internet while still retaining their basic working functionality. Cold wallets mostly come in the form of a hardware wallet. These wallets save private keys on a physical device in an offline environment and work just like a flash drive.
Cold wallets are preferred by people with a large amount of crypto assets. This is because cold wallets are known to be more secure than their hot counterparts. Moreover, cold wallets are quite easy to use as you can connect them easily to computers or any other device through a USB drive.
Hot wallets are those crypto wallets that connect to the internet or come in the form of software. Hot wallets are known to offer better accessibility as you can easily connect them to the internet. However, they are less secure as compared to their cold counterparts. That is, hackers or fraudsters can easily gain access to them, and by extension your digital assets. Hot wallets may come in the form of the desktop version, web wallets, and mobile app wallets.
Top 5 wallets to consider
Before you purchase a bitcoin wallet, you need to take a stock of your priorities, including asking yourself what you value most among factors such as compatibility, ease of use, the amount of digital assets you intend to keep, duration of storage, security, or accessibility.
Based on these factors, we randomly list some of the top 5 bitcoin wallets to consider actively interacting with blockchain and your crypto assets.
- Ledger Nano X: this is a cold wallet and can be considered the most modern and functional Bitcoin wallet in the market today. Ledger Nano X is secure, easy to use, highly compatible with many crypto assets, and works with both desktop and mobile.
- Atomic Wallet: a multi-currencywallet that supports over 300 crypto assets. The atomic wallet makes it here as the first crypto wallet with decentralized cross-chain atomic swaps on board, allowing users to exchange Bitcoin, Litecoin, and QTUM without involving intermediaries.
- Trezor Wallet: this was the first bitcoin hardware wallet in the market. It can connect to your PC via a USB. Trezor is highly secure, hence can store your large amount of Bitcoin offline. Trezor supports more than 600 cryptocurrencies.
- Trust Wallet: this is the world’s leading multi-asset digital wallet. With Trust wallet, you can store both bitcoins and altcoins. Even though it supports a small number of crypto assets, currently 13 crypto assets, it's seamless, frictionless, and easy to use.
- Guarda Wallet: this open-source and well-established bitcoin wallet has an active developer community that is constantly working on its improvement. Guarda has one of the best user interfaces.
Understanding different types of bitcoin wallets can help you make informed decisions when investing in one. With the many options available, you can use this guide to make better decision with your purchase.