With the incoming Constantinople Ethereum hard fork, many traders rush to take advantage of the new coins being created; that is why it is very important to first know what is Ethereum wallet, how to use them, and what differentiates them.
What is Ethereum wallet?
To explain what is Ethereum wallet, first of all you need to understand what is cryptocurrency wallet. Its main use is to store users’ public and private keys, interacts with various blockchains to enable users to send and receive BTC, ETH, other cryptocurrencies, as well as manage their balance. Some cryptocurrency wallets only deal with one specific cryptocurrency, but some others can be used to store multiple coins. With hundreds of cryptocurrencies in existence, it is generally more advisable to set up a multi-currency wallet, but this article will focus on Ethereum wallets.
The main differences with traditional digital wallets is that cryptocurrency wallets do not keep your coins but instead keeps them stored in the blockchain. The wallets just help you manage your keys, show your balance, and most importantly execute your orders: send or receive, to whom or from whom, the amount, etc.
Now that you know a bit more about what is Ethereum wallet, let’s get familiar with the different types of wallet that are currently used.
Several types of Ethereum wallet and some recommendations
There are several types of Ethereum wallets you can use, each of them has a way to help you manage your ETH, or other coins, and offer clear advantages or disadvantages to their users. They are mainly divided into three categories, as are all cryptocurrency wallets, namely paper, hardware and software wallets. Furthermore, software wallets include online, desktop, and mobile; each of these have different functions and operations with their own advantages and disadvantages. We will explain each of these and give some recommendations.
Online wallet — Web wallet
As mentioned before, the basic function of an Ethereum wallet is that it keeps your private keys and public keys, and saves your time to download the full client. Online wallets, also called web wallets, run on the cloud and can be accessed regardless of your location. Along with the convenience it brings, there are also security risks. Because it’s managed by a third-party, so think twice before you choose a trustworthy online wallet without technological problems or other internal issues for the sake of your asset security.
Coinbase is one of the most frequently used web wallets. It is a cheap and fast way of storing, and is more suitable for short term storage.
In the case of desktop wallet, you need to know that the wallets are installed on your computer, and you can only access to them through this particular device. Sure it highly increases the security level, for there is no third-party included, and it offers complete control of the wallet to users. However, you have to maintain the security of your desktop wallet yourselves, and if your device is hacked, you may lose your coins forever.
Atomic Wallet is a Universal Multi-Assets Wallet, you can manage your ETH and other cryptocurrencies in a single interface. It encrypts your private keys on your device and give you full access to your coins. Moreover, atomic wallet is available for most desktop operating systems.
Just as its name implies, a mobile wallet is set on your mobile phone, in other words, they operate through an APP. It allows users to quickly access their coins and do transactions. In general, there are two kinds of mobile wallets, one stores your information locally on the phone, and the other one only helps you gain access to online servers.
A good Mobile wallet to use would be TrustWallet. It is a fast and secure Ethereum wallet that's easy to use, stores your private key, locally and protects it with many layers of security.
A Hardware wallet stores users’ private keys on a hardware device like a USB. You can plug them in whenever you want and wherever you are, enter a pin, and make a transaction. Since your keys are kept offline, it greatly increases the security, as nobody can track it online as long as you don’t keep the USB plugged in.
Trezor is a hardware wallet and it was the first one designed to store BTC. It has since been improved, redesigned, and upgraded to store other currencies such as ETH. It is light, so you can carry it anywhere, and you only have to activate it with your password. While rising in popularity it is important to note that hardware wallets have a cost associated to them either as a flat purchasing fee or as a monthly subscription if not both.
A paper wallet refers to a physical copy of your public and private keys such as writing them on a piece of paper or sewing them on your favorite pillow; it can also refer to a software that generates your keys and then prints them. It is considered as the safest way to keep your ETH for a low price but necessitates certain precautions to be taken as it could still easily be stolen/observed if one is not careful.
This concludes today’s article about the several types of Ethereum wallets that are available, as well as the advantages and disadvantages you should know about. The recommendations present in this article are based on the research and tests from different traders that was compiled to offer this guide. Right now you must have a general idea of what is Ethereum wallet and how to use them. We hope you learned a lot, enjoyed the read, and stay tuned for more great content.