In the last few years, blockchain technology alongside its upgraded solutions has brought digital currency transactions to a new level of functionality and usefulness. Therefore the number of people investing, trading, selling, or buying cryptocurrencies increases at the speed of light. And this tendency, in its turn, leads to an unavoidable demand for highly secure cryptocurrency wallets, which have already become an indispensable element of crypto transactions and an essential part of the digital assets ecosystem.

Go on reading so that we can explore the best crypto wallets and their types together.

Top-5 Safest Cryptocurrency Wallets in 2022

There is a long list of cryptocurrency wallets you can choose from according to your needs, experience, activity, and purpose. The options and forms of storage are also different and are mainly divided into three categories:

Now let’s review the best crypto wallet providers and their services.

The 5 most secure cryptocurrency wallets in 2022

1. Coinbase Wallet

The best crypto wallet for digital novices and beginners, without a doubt, is Coinbase. The mobile wallet app can connect to significant bank accounts and offers an easy-to-use interface consisting of a three-tab layout and simply identifiable functions.

This hardware wallet supports over 550 crypto assets and can store NFTs or other digital collectibles. It’s also important to mention that the Coinbase wallet is non-custodial and can be used without an account on one of the significant cryptocurrency exchanges. 

2. Exodus

According to crypto experts’ opinions, Exodus can be considered the best software wallet designed for desktops due to its speed of transactions, various functionality, and easy-to-use nature. And though, initially, it was a desktop-only wallet; currently, Exodus has applications for both Android and IOS devices.  

One of the core advantages of this desktop wallet is the number of currencies the wallet supports: over 150 assets are available for crypto users. The cryptos include such established altcoins as Litecoin, Ether, Bitcoin Cash, and XRP and popular meme tokens like Shiba Inu and Dogecoin.

3. Mycelium

Mycelium is one of the best crypto wallets created for mobile devices due to its leading transaction history information and strong security system. It is also known as the best hardware wallet that supports Bitcoin.

The transactions and security options that Mycelium provides are the core distinguishing features of this wallet provider. In addition, its application is entirely reproducible, which means the wallet code can be copied and then compared to the original to detect potential security issues.

Moreover, Mycelium has multiple pin protection levels and custom transaction fees. The fees can generally be classified into four levels: standard, low priority, economic, and priority. 

4. Electrum

Often considered the best Bitcoin wallet, Electrum is indeed a name worth mentioning. This wallet provides a high degree of customization and extensive security features. 

Electrum is also one of the oldest crypto wallets, well-known even today. Currently, it hosts a wide range of powerful security features compared to other Bitcoin wallets and enables users to regulate their fees according to the transaction duration. Faster results require more fees. Other advanced features of this wallet cover customizable transaction fees, two-factor authentication, and multi-signature support.

Additionally, the Electrum wallet uses a lightweight client, which occupies less space on your computer than traditional wallets. The wallet uses only the parts of blockchains through simple payment verification, which increases the speed of transactions without complying with protection and security.

5. Crypto.com

A great example of a decentralized wallet is indeed Crypto.com. The provided wallet services include various decentralized finance tools, a robust security framework, and an excellent onboarding process. 

This decentralized crypto wallet fits the best for users who want to enter the Defi field. It gives the wallet owners full control over their private key and digital assets and enables them to swap cryptocurrencies on a 1-1 basis. Additionally, the users of the Defi wallet can access a wide variety of tools and earn additional income through the cryptos they already own.

However, most decentralized wallets and services carry greater security risks and threats compared to other hardware wallets. That’s why it’s essential to engage them prudently. 

How Do Crypto Wallets Work?

Typically, a digital wallet empowers the user to securely store the crypto portfolio and investments. It will connect to the blockchain network, enabling you to receive and send tokens at the click of one button. However, when you send bitcoin or any other digital currency to another user’s cryptocurrency wallet, you aren’t actually transferring the tokens. What you are doing, in reality, is signing off the ownership rights thereof to the wallet address.

You will need two codes to complete this procedure: private and public keys. Typically, a public key is a line of numbers and letters automatically created by a crypto wallet provider. On the contrary, a private key is available only for the owner, so that no one else can access it.

In general, the way the cryptocurrency software wallets operate is very similar to that of conventional checking accounts. The only difference and distinguishing factor are that you store bitcoin or other currencies instead of flat money.

Cryptocurrency Wallet Types

Crypto or Bitcoin wallets can be broadly divided into two groups: hot and cold wallets. The core difference between them is that cold storage wallets compared to hot wallets are stored offline. Let’s review each of them in detail.

Cold Wallets

Cold storage wallet providers keep the user’s digital keys offline on a sheet of paper or a piece of hardware. Most hardware crypto wallets are in the shape of a USB drive allowing you to sell, buy or trade crypto when connected to a computer. In the case of Paper wallets, the keys can be accessed via QR codes, engraved on metal, or written on paper.

Cold storage wallets are relatively secure and tough to attack. In most cases, hackers have no way of stealing or obtaining the user’s keys remotely unless the owner himself hasn’t fallen into a hacking trap like phishing or malware.

However, strict security policies like the two-key system used by a cold crypto wallet make the recovery process almost impossible if the user loses the key or USB drive.

Hot Wallets

This group of wallets can be defined as digital mechanisms whose connection with the Internet should not be cut off. Hot storage wallets are mostly pieces of software that you can access from your desktop computer or phone to monitor and trade the crypto exchange. The core advantage of these wallets is their convenience. The wallet’s private keys are stored on the respective website or app, which means you can access them from anywhere through the Internet.

However, as hot wallets are easily accessible online, they are an excellent target for cybercriminals. And this is especially dangerous for web wallets, which are hosted by crypto exchanges.

FAQ

What is a crypto wallet?

If briefly, a cryptocurrency wallet is designed for storing the public and private keys of digital transactions. So, any user who wants to enter into the crypto space and buy, sell, or keep digital assets needs a crypto wallet. 

What is the safest crypto wallet?

Generally, the most secure are cold wallets, as they offer advanced protection compared to custodial wallets. It’s best to use a cold wallet if the amount of storing tokens is large.

How to set up a crypto wallet?

In most cases, it depends on the type of bitcoin wallet you select. The primary process includes creating a PIN for the newly opened account and writing down the backup passphrase and the wallet’s private key.