A blockchain wallet is a digital wallet that uses for storage for cryptocurrencies like BTC (bitcoin) and ETH (ethereum). It also allows users to transfer digital assets and convert them to fiat currencies like the US Dollar or Euro. Most preferred by users as one of the safest means to store their virtual assets given its security features that block an attack both from an outsider or someone from inside the organization. What makes it more enticing is the fact that creating one is free of charge and is usually user-friendly. But transactions within a particular blockchain wallet come with a dynamic fee depending on the size of the transaction and the conditions when the transaction was made.
Basically, there are two types of blockchain wallets: the software wallet and the hardware wallets or also known as “cold wallets or storage”. Let’s take a look at the distinctive characteristics of these wallets.
These types of wallets are usually custodial wallets offered by crypto exchanges to their users. Using these wallets, customers can buy and sell cryptocurrencies. The security keys that are used to access the virtual assets are managed by the wallet provider. And since crypto assets stored in these wallets are always connected to the internet, they become vulnerable to hacking which could result in losses. But despite this, web-based wallets are one of the easiest ways of managing your cryptocurrencies which include buying and selling. Examples of web-based wallets are Blockchain, Coinbase, ArcBit, and Green Address.
This type of digital wallet is used to store cryptocurrencies on a smartphone or tablet. And since it is non-hosted, the user is solely responsible for securing and managing their stored digital assets including private keys. Trust Wallet, Coinbase, and Mycelium are top of the line for this kind. Mobile wallets also provide hot storage that can be linked to exchange but may come with added security features to ensure the safety of the customer’s virtual currencies including offline storage or cold wallets.
As the term implies, these wallets are software wallets that can be accessed through your desktop. Best examples for this type are MetaMask, Exodus, and Electrum. Just like its counterpart, the mobile wallets, these wallets offer options for cold storage to their users.
These wallets are also known as “cold wallets or offline storage” since they are not connected to the internet making them free from hacking which is one of the common problems faced by custodial wallet providers. They can be accessed using a USB port or Bluetooth to facilitate crypto transactions including the transfer of your digital assets. Hardware wallets are considered the safest way of securing your cryptocurrencies. NGRAVE is the coldest among these cold wallets since it only uses a one-way QR code communication to share information with the connected devices while keeping offline. Other top hardware wallets are as follows.
- Bitbox02 Hardware Wallet
- Trezor Hardware Wallet
- Ledger Nano X
- Keepkey Hardware Wallet
- Opolo Cosmos
- Safepal S1
- SecuX w20 and v20
Although blockchain wallets are mostly used by most users as a means of storing their cryptocurrencies, some of these digital wallets also offer a way of earning your digital assets through staking. For cold wallets we have Trezor and here’s the APY (annual percentage yield) for staking crypto assets on this hardware wallet.
- ALGO (Algorand) – 4.69 %
- SOL (Solana) – 6.55 %
- ATOM (Cosmos) – 9.67 %
- ADA (Cardano) – 4.91 %
- ONT (Ontology) – 21.43 %
- XTZ (Tezos) – 5.66 %
- VET (Vechain) -1.45 %
For hot storage, one of the best so far is Binance which offers a wide range of cryptocurrencies that you can stake. You can also choose between locked and flexible staking terms. With the former, you will only be allowed to move your digital assets once the staking duration is completed. The latter allows you to transfer your crypto assets anytime you wish. You can check their website to check for APYs of crypto staking.
As an investor, there are a lot of options that you can choose from when it comes to storing your crypto assets. You can choose from any of these wallets but always remember that security should be your topmost concern. With the crypto market still plagued with cases of cyberattacks like hacking, it is always your responsibility to keep your hard-earned money safe by safeguarding your digital assets. Just like the famous line in crypto that goes “ Not your keys, not your wallet”.