Best cryptocurrency wallet to use
Cryptocurrency Wallets: What are they?
So you’ve done your research on what cryptocurrencies to buy, and found which exchange you would use to purchase your desired crypto. That’s great! But, how do make sure your cryptocurrencies are safe and how do you interact with the rest of the DeFi ecosystem with the crypto you just purchased?
Well, cryptocurrency wallets are the answer. A cryptocurrency wallet is essentially digital proof that you own how much of a specific cryptocurrency. Contrary to popular belief, you don’t keep cryptocurrencies within your wallet, as they are instead stored in the blockchain. Your wallet simply tracks what you own, and interacts with the blockchain according to what cryptos and how much of it you have.
In every wallet, each cryptocurrency has a different address (i.e. Ethereum, Dogecoin, and Litecoin would each have its specific address within the same wallet). So for example, if you want to send Ethereum from an exchange to your wallet, you would then copy and paste the Ethereum address in your wallet into the withdrawal page in the exchange.
These addresses are known as “public addresses” which can be shared publicly without the fear of someone hacking your wallet. However, when you create a wallet (e.g. Those listed below), you would often be given a “private key”, or a secret code, which you should never share with anyone if you wish to keep your crypto safe.
Now, there are 2 main types of cryptocurrency wallets: Hot and Cold. Some of the more popular ones I would talk about in this article are:
Hot wallets: Metamask, Phantom, Exodus, Trust wallet.
Cold wallets: Ledger Nano, Trezor.
Hot or Cold: Which is the best?
Hot wallets
The term “hot wallets” refers to cryptocurrency wallets that have an Internet connection, such as browser-based wallets, desktop wallets, or even mobile wallets. Hot wallets are generally more convenient and more widely used as they are always connected to the Internet, and they help track what cryptos and how much of it you own.
Surprisingly, despite terming it a “wallet”, you don’t store your cryptos in the wallet. A wallet simply tracks and verifies ownership of your cryptos within the blockchain, and the cryptos never actually leave the blockchain. When you want to transact, the wallet verifies that you own the cryptos, and the cryptos would then move about within the blockchain.
One crucial thing to note is that if you own a large number of cryptos and don’t intend to utilize decentralized applications (dApps) often, hot wallets are less ideal for keeping your cryptos safe as they are more prone to hacks compared to an offline cold wallet (which I would explain later on!).
But, if you want to explore the various dApps in the DeFi ecosystem, then hot wallets are ideal, just make sure you don’t store all your funds in the same wallet for added safety. This is a comparison of some of the more popular hot wallets I can think of, and that I have personally used as well:
Metamask: The best cryptocurrency hot wallet out there?
As one of the more popular cryptocurrency wallets out there, especially based on its large userbase, Metamask is a great option for a crypto wallet for anyone who wants in on the Ethereum or Binance DeFi ecosystem. As a user of Metamask myself, I would say it is relatively easy to use and interact with dApps on the Ethereum or Binance network, and to be fair the only pain point for me would be the transaction fees.
How to install Metamask
- Downloading Metamask is pretty simple, all you have to do is download the wallet extension from the chrome store.
- Open up Metamask and select “Create a wallet”. Follow the steps through, and when you reach the secret recovery phrase part, remember to write the words down (ideally on paper since it’s not connected to the Internet), and never share them with anyone. If anyone gets access to your recovery phrase, your cryptos may be stolen.
- Click on the Metamask extension to open up the wallet and view your cryptos and public addresses. At the bottom, you would see “Import tokens” where you can add a new token to track within your wallet.
Connecting Metamask to ETH/BSC-based dApps
Now that you have set up your Metamask wallet, you can finally explore the various dApps in the ever-growing DeFi ecosystem! Personally, my favorite is Pancakeswap. There is a separate article on earning passive crypto income which covers how you can earn using Pancakeswap, which you can check out as well! But in this section, I would go over exactly how to interact with dApps using Metamask.
- You need funds. Depending on which dApp you intend to use, you would need to transfer the appropriate funds to your wallet. For example, Pancakeswap is built on the Binance Smart Chain, and you would need Binance Coin (BNB) in your wallet. If you intend to use Uniswap (Ethereum network), you would transfer Ethereum.
Let’s say you want to use Pancakeswap, you first have to add the Binance Smart Chain to your Metamask wallet. The option should show up by default, but if it doesn’t, select “Add Network” and key in the following information:
- Now that you have added the Binance Smart Chain, it’s time to add some funds. Head over to any exchange that lists Binance Coin (BNB) and purchase as much as you’d like, just make sure you have money for food. In the Metamask wallet, you would see your public address which you can copy and transfer your crypto to:
- With funds in your account, you can finally interact with dApps. Head over to the Pancakeswap website and click on “Connect wallet”, you would see a “Metamask” option which you would then select. Log in to your wallet and you are ready to use Pancakeswap. (You may be prompted to switch to the Binance Network in Metamask which is normal!)
- Do remember to always keep some BNB in your Metamask wallet (you don’t need a lot, you could keep around 0.05 BNB) to pay for transaction fees, or what they call “gas”. Otherwise, your transaction wouldn’t go through:
How to use Phantom
Metamask is a great wallet to use for ETH/BSC-based dApps, but it cannot be used for Solana-based dApps. So if you want to use dApps like solanart to buy Solana NFTs, then Phantom wallet is a great starting option. Here’s how you can use it:
- Similar to Metamask, you can download Phantom directly from the chrome store for free:
- Select “Create a wallet”, and similar to Metamask, you would receive a 12-word secret recovery phrase which you should never share with anyone, and you should write it down on paper as anyone with access to the phrase can access your wallet and funds.
- Click on the Phantom wallet extension in chrome or whichever browser you downloaded it on, and you can view cryptos and even NFTs stored in your wallet. Adding tokens to your wallet is also pretty simple, just click on “Manage token list”. Your public wallet address can also be seen at the top.
Connecting Phantom to Solana-based dApps
Now that you have a Phantom wallet installed in your browser, you can finally explore the wide range of dApps on the Solana blockchain! If you are unfamiliar with Solana, I have an article exploring Solana which you can check out too. The upside of using Solana-based dApps is of course the low transaction fees, so you don’t need to keep much SOL in your wallet just to pay transaction or “gas” fees.
For this example, I would use Solanart (an NFT marketplace based on the Solana blockchain):
- Open Phantom wallet from your browser extensions, and log in. From there, you would see a public address, similar to Metamask, to which you would transfer Solana to. (This address is completely fine to share):
- On most dApps, there would be a visible “Connect wallet” button which you would click on, and for this example, select “Phantom”. There would be a pop-up requesting access to your Phantom wallet like this which is normal, just click on connect:
- Now that you are connected, you can view NFTs you own on Solanart by selecting “Dashboard”. Whatever NFTs you purchase on Solanart would appear in your Phantom wallet. Similar to Metamask, be sure to keep some SOL in your wallet to pay for transactions or “gas” fees. But since it is Solana, fees are pretty low so you don’t have to leave much.
Cold wallets
As you’ve probably guessed, cold wallets are the complete opposite of hot wallets in the sense that it is disconnected from the Internet. Being disconnected from the Internet provides a major advantage: Security, so if you own as much crypto as Warren Buffet’s entire stock portfolio, cold wallets are your best bet to ensure they don’t get stolen.
I do not own a cold wallet since I’m not a Dogecoin millionaire, but they are very similar to how hot wallets function, just as an offline version.
Trezor and Ledger are some of the most popular cold wallets. In terms of ease of use, both are relatively similar. The difference comes in Price and their respective features:
Price of cold wallets
Ledger
Ledger is one of the most popular cold wallets, with the Ledger Nano S coming in at SGD$99, and the Ledger Nano X coming in at SGD$237.
Trezor
Trezor also has 2 models, the Trezor One coming in at 59 EUR (around 90SGD), and the Trezor Model T coming in at 189 EUR (around 280 SGD).
Features
Ledger Live
Ledger Live is Ledger’s desktop/mobile interface that allows you to track your portfolio, swap, send/receive cryptos, use dApps (much more troublesome compared to using hot wallets), and even stake cryptos. Ledger allows you to stake the popular cryptos such as Ethereum, Polkadot, Cardano, Polygon, etc.
Trezor Suite
Trezor Suite is Trezor’s desktop/mobile interface which offers similar functions as Ledger Live, but the main difference is Trezor doesn’t allow you to stake directly on their interface and you have to link it to an external staking pool.
Ledger or Trezor?
I do not own a cold wallet, but my opinion leans in favor of Ledger due to it having more vast functions, especially staking, and Ledger also supports more popular coins compared to Trezor, such as Cardano.
Conclusion
Ultimately, when it comes to versatility and convenience, I still prefer the Metamask wallet over the others due to its relatively large number of tokens supported (but most of the time, you would only need to store the few main cryptos). Interacting with dApps is also relatively simple, and since I don’t hold an absurd amount of cryptos, creating a few hot wallets and spreading out my funds is secure enough for me.
The main downside for me would be the fact that Solana-based tokens are not supported and I’m unable to interact with dApps on the Solana network. But if Metamask can integrate with the Solana network in the future like how it did so with the Binance Smart Chain, then I think Metamask has the potential to remain as one of the top cryptocurrency wallets.
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