Being able to guarantee the safety of any crypto assets in your possession constitutes one of the most important issues before even considering making investments. Beyond the fact that they are entirely dematerialized, cryptocurrencies also can’t (and most probably shouldn’t) be stored on a bank account. The primary function of an Ethereum wallet or any other crypto wallet is therefore to store your assets as securely as possible.
As crypto currencies are still not widely used as a means of payment, their main interest lies in the eventuality that their value could rise significantly (as was the case for Bitcoin, for instance). For true traders, it’s more about being able to carry out regular transactions as the price of their various assets goes up and down. These more advanced users are the ones who need a storage solution for their tokens which allows them quick access to and optimal compatibility with their platforms of choice.
But before we may ask ourselves about the best Ethereum wallet to adopt, let us take a moment to go over the main characteristics of this cryptocurrency which occupies the second position at the market cap, immediately behind Bitcoin.
What is Ethereum?
Before being a currency, Ethereum is a platform thanks to which developers may create and develop decentralized applications based on blockchain technology. Contrary to the Bitcoin system which relies on crypto transfers, Ethereum invites developers to use an existing blockchain as a base to design various applications. Several computer languages are used within the EVM (Ethereum Virtual Machine) and operations are handled through smart contracts. Every time a smart contract is executed or whenever a transaction is validated, the system calculates the corresponding fees based on gas. Creating blocks under these conditions generates a cryptographic token known as Ether (ETH), which represents the true currency of the Ethereum network. When you buy Ethereum, you are therefore really buying Ether, even though both terms are often substituted.
Why use an Ethereum Wallet
Just as you would need a storage solution for your Bitcoin, a dedicated Ethereum wallet is necessary to store ETH. It is particularly important to note that not all wallets (such as some Bitcoin wallets, for instance) may be used for Ethereum. While some support multiple currencies, others are entirely dedicated to a single crypto asset, which is why Ethereum has its own set of solutions.
Ethereum wallets have much in common with those that support other currencies and possess public addresses which serve as identification, a crucial reference to allow the transfer of assets. These addresses are equivalent to IBAN numbers associated with bank accounts. Wallets are also protected by a private key which must only be known by the owner of the wallet in question as it grants them access to the content of the storage solution.
This is why it is highly recommended to opt for a storage solution which won’t let you run the risk of seeing your private key get discovered, potentially by a hacker.
Software wallets – or desktop Ethereum wallets – are an interesting compromise that many users find ideal. We will see that the other, more single-sided solutions come with specificities which may not be suitable for everyone.
As for the desktop wallet, it offers a software interface thanks to which Ether may be stored on a computer that only the wallet owner has access to. In principle, the private key – which is stored on a personal computer – benefits from an acceptable level of security since it isn’t stored online. Problems may occur if the machine in question is exposer to malware or virus-type threats, which any Internet connection is an open door to.
If you opt for this type of storage, the best way to ensure the safety of your coins is to dedicate a computer to their storage. You will therefore never use it to surf the web or download anything – ever.
Finally, it is paramount to keep your private key somewhere safe, where no one will be tempted to look and where you won’t risk losing it. Obviously, storing your private key on a clearly labeled text document on your desktop constitutes a very high threat for your assets!
The official Ethereum wallet. It requires the installation of all of the network’s nodes. Thanks to this solution, you become an actual node yourself and may participate in maintaining its blockchain. In return, Mist requires more storage space than a simple wallet. Ethereum’s official client is still in its Beta stage, though, and its users therefore need to stay abreast of recommended updates or potential bugs. With that said, Mist is considered an efficient and reliable system to safeguard your Ether. It’s up to you to decide whether it’s worth dedicating so much hard drive space to it.
Exodus is not just an Ethereum wallet. On the contrary, it provides a storage solution for most of the widely known cryptocurrencies. The system even supplies a user interface thanks to which you can view your various assets and your progress in the form of a pie chart. This entirely free software wallet is very intuitive and suitable for those with less experience. Unlike most other desktop wallets, Exodus offers a private key recovery option if you provide your email address. Fortunately, it isn’t an obligation for those who would rather not take the risk, though.
Another multi-asset wallet, Jaxx also boasts a well-thought-out interface and is adequately secured. With over 60 cryptocurrencies supported to date and new ones being added on a regular basis, Jaxx is very popular because it also offers a mobile app. Thanks to the ShapeShift system, it is possible to carry out transactions very simply straight from the interface. Finally, Jaxx is also endorsed by a large community of developers and is planning on developing a hardware wallet in the near future.
The main benefit of mobile wallets is that they combine the portability of physical wallets and a means of accessing your coins without needing to connect to another machine. Once cryptocurrency payments become more widespread, such solutions will be particularly interesting. However, it is important to keep in mind that your assets will not be more secure than any other element stored on your phone. If this solution simplifies user access, it also makes it easier for wrong doers, unfortunately. It is therefore recommended not to store too many tokens that way.
A mobile Ethereum wallet will be particularly useful to handle sending and receiving Ether or to streamline interactions with some decentralized applications.
This iOS wallet gives its users the opportunity to really get into decentralized finance and claims itself to be “the open financial system of the future, today”. One of Dexwallet’s most compelling characteristics is that it connects with decentralized finance platforms through which you can truly “give life” to your investments. This option is especially interesting for those who wish to see their assets be used rather than just stored.
Argent is available both as an iOS and as an Android wallet and is known for its user-friendliness. This wallet relies on Ethereum’s protocol but makes it more accessible to those who do not wish to do any complicated calculations or to risk making a mistake when entering their security key. Once again, this is a wallet for those who are more likely to “use” their tokens.
Bread is available on Android and iOS and, quite uniquely, doesn’t ask its users to create an account. This fully decentralized application is directly connected to the blockchain and secures your assets by generating a 12-word paper key which you must copy down scrupulously. It will allow you to access your data if your device were stolen or lost.
Web Wallets and Extensions
Also called “hot wallets”, these online wallets are usually put at your disposal by open source independent actors or trading platforms. In the first case, they are accessible via a web browser. As for trading platform wallets, they are the default storage option where your assets are kept in order to carry out transactions or to receive payments.
The general consensus is that online Ethereum wallets are not secure enough. They can, however, be very convenient for users to carry out transactions or exchanges over the web. There are also hybrid wallets which offer an online access but provide offline storage solutions for private keys.
Entirely free, this open source Ethereum wallet is especially exhaustive. It allows its users not only to send, receive and store their Ethereum tokens, but also to interact with its blockchain. MyEtherWallet counts as one that doesn’t store their users’ keys.
Coinbase is an exchange platform which offers an online wallet, but the “vault” it provides its users with sets it aside from the competition. You should still note that, if you decide to trust an exchange with your coins, you are giving them full access to your keys.
Hardware Wallets or “Cold Wallets”
For anyone wishing to store Ethereum as securely as possible (and potentially in large quantities), nothing beats physical wallets.
Cold wallets resemble USB flash drives and store your assets offline, under your sole responsibility. The keys are also stored directly on the device.
However, these wallets are sometimes less convenient than connected solutions if you want to do any trading.
Ledger Nano S
This storage solution is very popular due to the excellent level of security and user-friendliness it offers. It boasts an OLED screen which displays information relative to your transactions in progress and demands the push of a physical button to validate them. This model is practically un-hackable.
The first physical wallet ever made has never stopped getting better over the years and now supports several cryptocurrencies, including Ethereum. Much like the Ledger, transactions are validated via the device itself, which prevents any pirating attempt.
KeepKey offers a solution which allows users to exchange currency straight from the device itself thanks to the integration of the ShapeShift platform. Being able to trade from such a device is an undeniable advantage which remedies the only drawback physical wallets seem to have.