One of the most important concepts to understand in order to start trading in cryptocurrencies is the “wallet”. In the crypto world, a wallet is a system used to receive, store, and send assets. A wallet is similar to a bank account and it contains your private keys. Similar to how a bank account does not actually hold physical money, wallets do not contain tokens. They contain public and private keys. This are codes that allow you to access your currencies and use them for transactions. A crypto wallet can be a website or an application installed on one of your devices. Also a hardware device, or even just a piece of paper on which you have stored your keys for safekeeping.
In this article, we will first explain the different types of wallets. Then, delve into your best options for what is normally regarded as the most advanced and secure type of wallet. This is the hardware wallet.
Types of crypto wallets
As we mentioned before, wallets can take several forms. Different types of crypto wallets have different pros and cons. The decision on which kind of wallet is best for you should be informed by these differences. The first and most important wallet classification is based on one fact. That some wallets are connected to the Internet, and some are not. Wallets that live on or are connected to the Internet are called hot wallets. Those that do not have an Internet connection of any kind are called cold wallets.
As you might imagine, hot and cold wallets have fundamental differences; mainly in terms of security and ease of use. Due to the fact that hot wallets are connected to the Internet, they have the advantage of letting you access your funds easily. But also opens up the possibility for hacker attacks. Cold wallets, on the other hand, store your cryptocurrencies offline. This means that in order to access your funds, you must have physical access to the wallet. Making this type of wallets slightly more inconvenient, but much more secure from hackers.
In general, we could say that hot wallets should be treated as your physical wallet is treated for fiat money. Use them to store only the amount of money you plan on using fairly frequently. Make sure to store the rest of your assets in a cold wallet. In this example would be the equivalent to your bank account.
Now we know the differences between hot and cold wallets. We can analyze the different types of wallets that fall in these two classifications. We will learn about paper wallets, physical tokens, mobile wallets, desktop software, online wallet services and finally hardware wallets. These are the most secure, and we will focus on them by discussing the 10 best options you have.
Paper wallets (cold):
As you probably already guessed, paper wallets are no more than a simple piece of paper on which the public address and private keys to a wallet are imprinted. They normally contain a QR code with the information. You can scan this code and the information is quickly and easily entered into a software wallet. Then, you can spend the funds.
This kind of wallet is cold, since the piece of paper is completely offline. It retains the hack-proof advantages of all cold wallets. Having the advantage of being very low cost and easy to use. The disadvantages it presents are inherent to the medium. The paper is fragile. The security of your assets depends entirely on your ability to keep this piece of paper intact and away from prying eyes. Some people laminate their paper wallets and keep them in a safe or a safety deposit box. This is great for security, but makes your funds more difficult to access yourself.
Physical tokens (cold):
Physical tokens are similar to paper wallets. They are material objects that contain the keys to a wallet containing crypto assets. The main difference they have with paper wallets is the fact that the private key needed to access the funds is stored behind a tamper-evident seal of some kind. Frequently a holographic sticker that has to be destroyed in order to reveal the key. This means that physical tokens can be traded offline. The funds are safely stored in that physical object as long as the seal appears intact.
The first iteration of this kind of wallet was shaped like a credit card. Subsequent products of this category are usually shaped like common coins. Some of these new coins are even minted in precious metals. They actually have a physical value in addition to the digital assets they store.
Physical tokens have similar advantages and disadvantages to the material forms of fiat money. They are immune to online attacks and their security completely depends on your ability to keep them safe. They are more secure than paper wallets because even if someone else handles or is able to look at them. The funds are inaccessible until the seal is broken. This has an obvious trade-off in practicality. Assets stored this way are not easily accessible. Production of physical tokens has been highly regulated and decreased because they are considered money transmitters. Most of the existing coins are more valuable as collectors’ items than as an actual crypto-asset storage medium.
Mobile wallets (hot):
This type of wallet consists of an app that runs on your mobile phone. It also stores the public and private keys for your crypto assets. Most people carry their phones with them all the time and everywhere. This type of wallet is the most convenient if you plan on using cryptocurrencies in your daily life. The disadvantages of mobile wallets though, are plenty. Firstly, your phone is constantly connected to the Internet. Assets kept in mobile wallets are not safe from hackers. Moreover, losing or getting your phone stolen is sadly a very common occurrence. This kind of wallet is also vulnerable to physical robberies.
Due to their nature, mobile wallets are excellent for people who use cryptocurrencies in their daily lives. Their use should be restricted exclusively to a small amount of money that is intended for everyday use. For long-term storage and for large amounts of money, other more secure if less convenient options are always preferred.
Desktop wallets (hot):
Desktop wallets are very similar to mobile ones. The only difference is that the app runs on your computer instead of doing it on your mobile phone. This means that most of the advantages and disadvantages of mobile wallets remain, but with a couple of differences. Firstly, the convenience of keeping access to your assets most of the time is reduced. Most people carry their phones on their person more often than their computer. On the other hand, computer theft or loss, while still common, is less probable than that of a mobile phone.
Online wallets (hot):
Online wallets store your private keys on a server which is constantly online. They frequently have the option to then replicate your information in desktop or mobile apps. Then, you can access your funds from practically any device that has an Internet connection. This makes online wallets even more convenient than mobile or desktop wallets. But it also makes hacking even more probable. Many of the online wallet services also serve as crypto exchanges. The ease of use for traders is high. Our recommendation is to use these wallets only during actual transactions and not as value storage media. This recommendation stems from the fact that several exchanges’ wallets have been previously hacked. Leaving large sums of currencies in this type of wallet is a risky practice.
Hardware wallets (cold):
We finally come to the focus of this list: hardware wallets. This type of wallet regularly looks similar to a USB thumb drive and it stores your private keys in a secure encrypted internal memory. The wallet is kept cold (offline), so your keys are not vulnerable to hacking.
When you need to perform a transaction, you connect the hardware wallet to the device you are making the transaction with (a computer or smartphone). Once the wallet is connected, the device sends the information of the transaction to the hardware wallet, the wallet awaits confirmation from the user directly on the wallet’s interface and after receiving this user confirmation, the wallet itself signs the transaction and then sends this digital signature to the device completing the transaction. This whole process means that your keys never leave the hardware wallet, so they are secure to use even with vulnerable devices and once you finish the transaction there is nothing to worry about in terms of hackers.
The 10 best hardware wallets
Now that we know what hardware wallets are and the basic differences they have to other kinds of wallets, we can focus on specific wallet products that you can use to safely store your cryptocurrencies and make transactions with them. The following 10 models are all great options, but their differences make some of them better than others depending on each person’s use case. Read along to decide what hardware wallet is the best for you.
10. Pi Wallet
We rank this in the tenth spot since it is more of a novelty project for tech-inclined individuals than a great alternative to have a hardware wallet. Pi wallets (short for Raspberry Pi Wallet) are small single board computers that have been adapted to run either an OS that works as a crypto wallet or a version of Linux on top of which a wallet emulator runs. Either way, to get your hands on one of this you need advanced technical knowledge since it is a DIY project that requires buying the hardware (which can range from only the board to a full system that can include a battery and a touchscreen) and then programming this hardware to run the wallet software.
Normally, Pi wallets are more cumbersome than dedicated commercial hardware wallets both in form factor and in ease of use, but you might feel a sense of accomplishment from building one. You also need to be wary of the software you use, since there is a possibility of people posting online guides that will only lead you to installing software designed to steal your funds.
Site: There is no specific website since this is not a commercial product. Some people have tried to sell kits or finished products, but they are normally not really successful. There are several subreddits and forums you can find if you are interested in building one.
Pros:
- Fun to build
- Customizable
- Cheaper than other commercial alternatives
- Easy back-up (just clone the SD card)
Cons:
- Sort of difficult to build and use
- Less portable than most alternatives
- Uses SD cards for storage, which can have a high failure rate
- You really need to know your way around computers
Verdict:
While they might be a fun project for some people, we would not recommend this option for beginners. If you decide to build one, make sure that you know what you are doing and get your source code from a trusted site.
9. Coolwallet
On its website, Coolwallet describes itself as “the world’s best Bluetooth hardware wallet for Bitcoin, Ethereum, Litecoin, XRP, Bitcoin Cash, and ERC20 Tokens.” This product works with 38 coins and tokens plus any ERC20 token, which means that some obscure altcoins are still not supported. It retails for 99 USD.
The device is shaped like a credit card and it is flexible, heat and water and tamper proof; it also has an e-paper display and a metallic button. The battery should last about two weeks making two transactions per day and it charges in two hours. The package includes a charging cable, the charger, a recovery card and the device itself. To use this wallet, you just have to charge it and then connect the device to its proprietary iOS or Android app.
When you need to make a transaction, you just have to open the app and connect the device via Bluetooth. The transaction will be shown on the device’s e-paper screen and you will need to verify it with what CoolBitX calls 2+1 Factor authentication. This authentication mode is one of the most secure in the industry and it entails unlocking your mobile phone or tablet, unlocking the app itself (with the fingerprint reader, a PIN or a pattern) and finally pressing the authentication button on the wallet itself while it shows the transaction details on its own screen. This protects you from almost any form of hacking attempt. Even if someone accidentally downloaded and installed a fake app, the final on-device authentication makes it virtually impossible for hackers to access your funds.
Site: coolwallet.io
Pros:
- Innovative form factor
- Excellent triple layered security
- Compatible with the most common currencies
- Excellent display
- Uses an eAL5+ secure element chip
Cons:
- Software is not open source
- Could still improve the number of currencies supported
- Can not import other wallets via QR code
- Only works with mobile devices (iOS and Android)
Verdict:
The Coolwallet S is an excellent device for people who need cold storage on the go. Its encrypted bluetooth connection helps cut on cable clutter, and its flexible tamper proof form factor means carrying it around is a breeze. For us, the missing feature that would give this wallet a much higher rating is working with other non-mobile operating systems.
8. Coldcard
Produced by a company called Coinkite and retailing for around USD 120, Coldcard is a great cold wallet alternative that works for the most popular cryptocurrencies: Bitcoin and Litecoin. It features a lot of advanced security characteristics, which include:
A true secure element: The most important data in your wallet will be stored and processed in a completely separate encrypted chip from the main processor of the unit. This chip can not be replaced or tampered with, so your data is secure even if someone had access to your wallet and tried to physically hack it.
Open Source: The code that runs on the device is publicly available, so everyone can see exactly how it works and verify that there is no malicious code running on people’s devices.
True air-gap operation: It claims to be the only wallet in the market that can function without ever being connected to another device. This means that everything from setup to transactions can be done entirely on-device removing one major attack vector.
PIN
Duress PIN: If you are ever in a position where someone is forcing you to enter your PIN, you can have a secondary valid PIN that will open a duress wallet. This wallet can contain any amount of Bitcoin you are willing to lose while still being convincing.
Brick-me PIN: This programmable PIN will render the device completely useless. You will lose the device, but it can save the funds you have stored in it.
PIN safe words: The device uses an 8-digit PIN that is divided into two 4-digit blocks. Each device has a different randomized dictionary of two words per each unique first block (10,000 possible word pairs). After you enter the first four digits of your PIN, the device will show the preset word pair for that block and you should only complete the PIN if the words are correct. This means that even if someone made a lookalike device to fool you into entering your PIN, their device would have no way of knowing your preset wordpair.
Login countdown: If you enable this option, any wrong attempt at entering the PIN will render the device useless for a preset amount of time.
Genuine and caution lights: The firmware of the device is signed with a factory key. This means that even if someone has access to your Coldcard and tries to mess with the firmware, you will be alerted by a light telling you the firmware has been altered. The physical wiring to these LEDs is visible through the case of the wallet, so even physical tampering with this system would be evident.
Physical security: The secure element is completely encased in resin in the factory, and even the case of the device is a security feature; it is clear so you can see if anything inside your wallet has been physically altered.
Site: coldcardwallet.com
Pros:
- Has plausible deniability and self-destruct features
- One of the most secure wallets on the market
- Bright legible screen
- Compact, portable design
Cons:
- Only works with BTC and LTC
- The vast array of functions can make it slightly difficult to master using the device for beginners
Verdict:
All of these features make the Coldcard one of the most secure devices on the market, but its main downside is the fact that it only works with BTC and LTC, so if you are dealing with any altcoins, you are out of luck.
7. Bitlox
Bitlox is marketed as “the Rolls Royce of bitcoin wallets” and we can see why. Its hardware is extremely secure and features characteristics such as an e-paper display, an alphanumeric keypad, titanium casing (optional), support for the main 5 operating systems, 10 languages, open source software, and the ability to create up to 100 wallets in one single device. It retails for USD 100 to USD 200 depending on the version, but it is often out of stock.
Bitlox only supports BTC, but similarly to Coldcard, what it lacks in currencies support, it makes up in features:
Three different models: The basic model (called Bitlox Advanced) has everything you need without extra bells and whistles; the Ultimate version adds a titanium casing and the Extreme Privacy version adds a military grade USB vault and pre-installed TAILS OS that lets you make completely anonymous BTC transactions.
Ultra sturdy construction: Even the basic model is shock, dust and water-proof and the e-paper screen is not only energy efficient, but also superior in durability OLED and LCD displays.
Three preset security levels: Depending on how much security you need at the expense of convenience, you can set the device to operate with three different levels of security. The first uses a mnemonic passphrase of 12 words with a 4-8 digit PIN, the second one ups the seed length to 18 words and adds “Anti Evil Maid” measures. The most secure method increases the length of the mnemonic to 24 words and requires a PIN for every single transaction.
Site: bitlox.com
Pros:
- Virtually indestructible
- Extended security measures
- Multi-language support
- Open source
- E-paper display shows your public address and QR code at all times
- Compatible with all the major operating systems (Android, iOS, Windows, MacOS and Linux)
Cons:
- Slightly difficult to use for begginers
- Only supports BTC
- Five-year warranty
Verdict:
This wallet is similar to the Coldcard in terms of security, ease of use and currency compatibility, but it is sturdier. If you are not interested in altcoins and only need a secure BTC wallet, this is one of your best options. The only downside besides only working with one currency is that it might be difficult to find this wallet on stock.
6. KeepKey
KeepKey is probably the cleanest looking crypto wallet you can find. The back of the device is an aluminium panel and the front is plastic, which hides a bright screen; there is also a button on the top surface and a USB-C port on the bottom. The retail price for one unit is USD 79, but you can generally find them with a discount bringing the price down to around USD 50. This makes KeepKey one of the most affordable crypto wallets in the market.
This device supports unlimited wallets and works with over 50 cryptocurrencies and ERC-20 tokens. This ample compatibility, in conjunction with its low price and excellent design, makes KeepKey one of the three most popular wallets (being Trezor and Ledger its main competitors). It might not have all the security features other wallets offer, but its PIN protection and 12-word recovery seed should be more than enough for most users.
Shapeshift acquired KeepKey in 2017, which means that users of that exchange will benefit largely from the seamless integration between the service and this wallet. The only compatibility downside is that it only officially works with desktop operating systems (Windows, MacOS and Linux), but if you don’t need mobile support, KeepKey might be your best option.
Site: shapeshift.io/keepkey
Pros:
- Very easy to use
- Affordable
- Clean industrial design
- Compatible with most cryptocurrencies
Cons:
- Security features are not the best
- Hardware looks less durable than other options
- Connection to a computer is necessary
Verdict:
For most regular crypto users, this wallet is more than enough and its price makes it a very attractive option. The vast array of currencies that it works with and its seamless integration with the Shapeshift exchange makes this offering very compelling for users of this service, traders on a budget or novice users in general.
5. Trezor One
Trezor One is one of the most popular crypto wallets in the world and it is also probably the oldest model of commercial hardware wallet still in production. It is produced by Satoshi Labs. which is a well regarded company in the crypto world. The device is shaped like a key fob, and its entire interface consists of a small OLED screen, a USB connector and two buttons. It is PIN protected and uses a 24 word seed for recovery to which you can add an additional passphrase for increased protection.
Trezor one also includes a nifty plausible-deniability feature, with which you can add a secondary passphrase that will open a different wallet where you can store a small amount of assets. With this feature, even if you are being physically threatened to give up your passphrase, your loss will be limited to the funds stored in the secondary wallet and not to your main wallet.
Compatibility of the Trezor One is wide, both in terms of cryptocurrencies and operating systems. It works with most altcoins including XRP, which was previously unsupported. The only major operating system it does not support is iOS, but it will work on any device running Windows, MacOS, Linux or Android. The device does not have any wireless connectivity, so you will need a USB cable to connect it to your computer, but this comes with the added advantage of keeping your wallet completely immune to wireless hacks.
Site: trezor.io
Pros:
- Open source firmware
- Can be used with more than 500 different assets
- Very easy to use
- Inexpensive
Cons:
- Small screen
- Not as physically robust as other offerings
- Still uses micro-USB
Verdict:
The One is the least expensive option from Trezor, and while it shows its age in some hardware aspects (no USB-C and small monochrome screen), it is still a very solid competitor especially for beginners. Its low price, excellent customer support and ample compatibility justify its place as one of the most beloved crypto wallets among the community.
4. ELLIPAL Titan
Ellipal came relatively recently to the market, but that does not mean that their offerings are not competitive. The Titan is a truly air-gapped wallet, meaning that it features no real data connectivity, whether wired or wireless. All the information exchange between the wallet and your main device is made through a camera that reads QR codes, which means that most attack vectors are suppressed. Its body is made from a single milled block of aluminium that is chemically bonded to a color touchscreen, meaning that disassembly is impossible without damaging the internal components. This has the added benefit of making the wallet impervious to water and dust.
Adding to the previously mentioned physical security measures, the circuitry of the device can detect any attempt to take the device apart and will immediately erase all the sensitive data it contains in case of this happening. The Titan is compatible with most cryptocurrencies, but it only supports iOS and Android through their proprietary apps. The biggest downside of this product is its price of USD 170 which, while fully justified by its superior construction and excellent screen, is higher than that of the average hardware wallet.
Site: ellipal.com
Pros:
- Fully air-gapped
- Solid metal construction
- Supports a wide variety of cryptocurrencies
- Probably the best screen on the market
Cons:
- Larger than most of its competitors
- Only works with mobile devices
- More expensive than most alternatives
Verdict:
While the Ellipal Titan is one of the most secure and beautiful crypto wallets, its price might be a large pill to swallow for most enthusiasts. The fact that it only works on mobile might not be for everyone, but traders who need to be on the move and value security over everything else might find that the Titan is their best option.
3. Ledger Nano S
The Nano S is the entry level product from industry-leading manufacturer Ledger. The device looks very similar to a USB thumbdrive, consisting of a rectangular plastic body with a small OLED screen, two buttons, a micro-USB port and a swivel metal cover; but don’t let its simple looks deceive you. The Ledger Nano S is a very capable device and is one of the most popular options on the market today. It comes in 6 fun colors and it can be yours for only USD 59.
The Nano S supports more than 1000 assets and makes use of a proprietary operating system that works with a secure element chip. This means that unlike other products, each wallet is an app on your device and is therefore isolated from the rest of the wallets on it while your keys and other important data are safely stored in a specially designed cryptographic chip. The Nano S can store anywhere from 3 to 20 apps depending on size, which means that although more than 1000 currencies are supported, you will only be able to use some of them concurrently.
Ledger Nano S works on desktop operating systems and an integration with the Android app is being developed (you will need an OTG USB cable for that). Users of iOS are out of luck though, since that OS handles external USB devices in a very specific way that makes it impossible for Ledger Live (Ledger’s app) to connect to the wallet.
Site: ledger.com
Pros:
- With over 1.5 million units sold, this is one of the most widely supported crypto wallets in the world
- State of the art security features
- Inexpensive
- Easy to use
Cons:
- Does not work with iOS
- No water or dust resistance
- No USB-C port
Verdict:
The Ledger Nano S has very few drawbacks and many advantages. It is a great option both for advanced and beginner users, especially if you are on a budget. There are only two groups of users to which we would not recommend this model: iPhone users that want a mobile hardware wallet and traders that need to have many different wallets for altcoins in a single device.
2. Trezor Model T
The Model T is the evolution of Trezor’s One, and that is evident from the moment you first see them. The form factor is almost identical to its predecessor, but instead of bearing two physical buttons, the Model T’s user interface is entirely contained in a small color touchscreen. The similarities go beyond the physical appearance, since all of the characteristics of the One are replicated in the Model T. Additionally, you get an SD card reader that is not yet functional but is expected to bring many improvements, a USB-C connector and support for some altcoins that are not functional in the previous model.
When compared to Trezor’s basic offering, the Model T is definitively superior, but the added features come with a relatively hefty price tag of about USD 165. The added features might not be enough to justify the price increase for your current use case, but Trezor themselves have described the design of the product as focused on future-proofing, so only time will tell how far this wallet can go.
Site: trezor.io
Pros:
- Open source firmware
- Can be used with more than 1000 different assets
- Very easy to use
- Excellent color screen
Cons:
- Significantly more expensive than the One
- No shock,water or dust resistance
Verdict:
Coming from one of the most respected companies in the crypto world, the Model T is an excellent offering for users with high expectations and deep pockets. If you plan on trading in the newest altcoins or if you need the added accessibility of the touchscreen for frequent transactions, the Model T might be for you.
1. Ledger Nano X
For our top spot, we decided on the Ledger Nano X. It features everything offered by its sibling, the Nano S, plus several additions that make it the all-around best option for most users. Instead of supporting only 3-20 apps, the Nano X can handle up to 100 apps, and its main advantage is that it can connect to your phone (whether iOS or Android) via bluetooth. Physically, it is very similar to Ledger’s base model, but it features only one button, the screen has twice the number of pixels and it connects via a more modern USB-C instead of the old-fashioned mini-USB.
With an asking price of USD 120, the Ledger Nano X is not as expensive as other top-of-the-line products such as the Model T while offering an expansive feature set and being able to be used on the go with any operating system. It is probably not the best option for every single user out there, but for the average trader, this wallet will definitely not disappoint.
Site: ledger.com
Pros:
- Encrypted Bluetooth connection
- Secure CC EAL5+ bank grade chip
- Open source apps
- Reasonably priced
- USB-C connection
- Over 100 assets supported
- Supports every major OS
Cons:
- There are more affordable options
- The apps are open source, but not all the code is
- No touchscreen
Verdict:
While not perfect, the Ledger Nano X is one of the best options for a secure, feature packed hardware wallet. Even though it is a premium offering, its pricing is sensible and unless you have a very specific use case (such as needing a rugged device), it is highly likely that the Nano X will fulfill all your requirements without breaking the bank.
Conclusion
As we discussed in the introduction, a hardware wallet is essential when dealing in crypto assets, and the peace of mind you will get from using one is invaluable. Even though we listed these products in order, that does not mean that you should automatically go for our number one choice. As with most things in life, the answer to the question “which is the best hardware wallet for me?” depends on many factors and you should consider all your needs and wants when choosing which one to buy. Some people will even decide to have several wallets and use them differently, so the choice is completely yours.
Having said that, it is important to stress that you should only buy a crypto wallet from trusted sources to avoid ending up with a compromised piece of hardware (never buy from eBay or similar sites). We hope you enjoyed our analysis and that it helped you on your path to crypto success.
