Ethereum has the second highest market cap in the cryptocurrency world so it’s no surprise that there’s been a major influx of attention from investors.
With this increased attention comes the need for a secure place to store ether.
So we’re going to talk about Ethereum wallets. Think about what you really need for storing your ether. A few questions to mull over:
- Do you need a wallet that can hold several currencies, or just Ethereum? There are plenty of wallets that allow you to hold different cryptos, as well as some that are strictly for Ethereum.
- Do you plan on frequently trading your Ethereum? Some wallets make it easier for frequent traders, and others prioritize security and can be a bit of a hassle to frequently trade with.
- Do you want access to your wallet from anywhere at anytime, or only from one location? There is often an inverse-relationship between accessibility and security.
By the end of this guide, you’ll know the most popular Ethereum wallets and which one is perfect for you.
Table of contents:
- 1 What is Ethereum Wallet?
- 2 Hardware Wallets
- 3 Software Wallets
- 4 What to Look For in an Ethereum Wallet
- 5 The Best Ethereum Wallets of 2019
- 6 Ethereum Gas (transaction fee)
- 7 Final Thoughts
What is Ethereum Wallet?
An Ethereum Wallet allows you to store your Ethereum-based cryptocurrency in a secure, private location away from hackers. When you buy Ethereum, keeping it on an exchange can be a risky move because there have been many times where these exchanges get hacked, or even shut down, taking your cryptocurrency with them. The most secure method of storing your coins is in a Wallet.
Ethereum Wallets have many different types and features, so choosing the best one can become a bit confusing, especially if you are new to the cryptocurrency world.
The most popular wallets for cryptocurrency Ethereum:
How Does a Ethereum Wallet Work?
A digital currency wallet is different from the conventional wallet as digital wallets do not store a physical form of currency. An online blockchain ledger helps users to interact directly with the blockchain and then enables them to send and receive digital currency – making transactions. When someone transfers Ether coins, they are transferring their ownership of these digital coins by sharing them to another person’s wallet. Kept in these wallets are private keys. To unlock the coins (send coins), each unique public address and private address (keys) contained in the wallets, should match. This transaction is then logged or shared on the blockchain.
Hot and Ethereum Cold Wallets
There are two kinds of wallets, hot and cold.
A wallet is known to be hot if it stores your keys online. These can be accessed easily from any place as long as you have internet. However these are not the best option since they can be hacked and your coins can be stolen.
Cold wallets on the contrary are those that are stored offline, i.e. the private keys are within the hardware. These are more secure as they will only be connected online when you want them to be and have far less chance to be hacked.
Now that we have covered hot and cold wallets, let’s talk about hardware vs software wallets.
Let’s start with hardware wallets which as the name suggests are in tangible form. They are like your conventional, portable hard disk but designed for cryptocurrency. They are what we call cold wallets in this business.
Hardware wallets are better as they offer more security, are not connected to the internet 24/7 and can be kept securely wherever “you” like.
Designed like USB devices, they can be plugged into the computer you are using to make a transaction and can generate keys on the go.
Pros of using hardware wallets:
- They are protected from various malwares that come creeping into your computers as they generate the keys while they are offline.
- Convenient, easy to use interface and better option for those that are new to cryptocurrency.
- Most come with backup options to ensure you never lose your coins.
- Can be secured with pin passwords on the hardware itself.
- Can be stored in any place you like, your dog’s kennel or under your pillow, you decide.
Cons of using hardware wallets:
- More expensive compared to software wallets.
- Can be tricky to find as they are mostly sold out.
Software wallets on the other hand come in three varieties: Mobile, online and desktop. These are known as hot wallets.
To use desktop wallets, you have to download and install them on your preferred laptop or personal computer.
They can be used from only one computer where they have been downloaded. In terms of security, desktop wallets are the most secure wallet but only if you can ensure your computer is not hacked or infected by malware.
Pros of using desktop wallets:
- They are very easy to use and great for newbies.
- Third party servers are not used to store your private keys.
- By combining it with “TOR Network”, you can create a more secure and private wallet.
Cons of using desktop wallets:
- Being connected to the internet, it becomes vulnerable to hackers.
- Since it’s based on your computer, it can get stolen, even by those that are repairing it.
- If you don’t back it up, you might lose your keys in case your computer crashes.
Online wallets use cloud and can be accessed from anyplace. This does make them convenient but also increases the risk as they are going to store your private keys online. This makes them susceptible to cyber-attacks and hackers.
Pros of using online wallets:
- Online wallets are superfast compared to other wallets.
- They are great if you are working with smaller amounts of coins.
- Some of the online wallets offer integration with exchanges and also offer you the chance to easily manage multiple currencies.
Cons of using online wallets:
- Since you are accessing them online, you can lose your wallet through malicious malware, DDOS attacks, hacking and also phishing scams.
- Your wallet is basically not your wallet as it is stored somewhere by the company you are using and its security is out of your hands.
- Computers are not the most secure way to access online wallets as you might be using one that has a keylogger or even viruses.
Mobile wallets as the name points out, are apps on your phone. They are great because wherever you go, your mobile goes. This means you can easily check your balance, share coins etc. The UI is also simpler to ensure they don’t take more space on mobile devices.
Pros of using mobile wallets:
- Having a wallet in your phone makes it practical and incredibly easy to use. Send or receive coins or make payments while on the move.
- You get more features in apps compared to other wallets.
Cons of using mobile wallets:
- It’s in your phone so if you lose it, you might lose all your coins.
- Android phones can be hacked or get malware that can result in you losing your wallet.
An Ethereum paper wallet is perhaps the safest option available for storing your Ether. Essentially, it’s just a piece of paper with a code written on it. It’s the biggest advantage is that it’s neither connected to the Internet nor does need to be stored on your computer. That piece of paper can be with you at all times. It can be in your safe deposit box or even buried somewhere in your backyard. It makes your funds immune to hacker attacks as well as most kinds of physical theft (depending on how well you hide it).
To set up a paper wallet, create a new wallet on MyEtherWallet, download the keystore file and hit the ‘print’ button provided for you. A piece of paper that will come out of your printer will contain both your public and private keys as well as QR-codes to scan them.
Alternatively, for added security, you can use other generators available online and disconnect from the Internet before generating a new wallet address. This is a safety precaution in case the website is transmitting the wallet information to a hacker.
What to Look For in an Ethereum Wallet
Finding the perfect Ethereum wallet shouldn’t be difficult, but it does require a general understanding of how cryptocurrency storage works.
In broad strokes, there are generally four different wallet types:
- Hardware wallets: These wallets are physical wallets that have your private keys encrypted into them. These are the most secure type. Gringotts Wizarding Bank level. Hardware wallets allow you to keep your cryptocurrencies in “cold” storage—offline–so your coins are inaccessible to Internet hackers.
- Online wallets: These wallets exist online. Duh. While they are still considered extremely secure, the fact that they are connected to the Internet exposes you to a small amount of risk. You can use these wallets on a variety of devices.
- Desktop wallet: These wallets are downloaded and installed on your computer (PC or laptop). Once installed, only that specific computer can access the wallet.
- Paper wallets: These wallets are pieces of paper with your private keys on them. These are extremely risky because if you lose this piece of paper, the chance of accessing your coins in the future is extremely slim. Goodbye mulah. Additionally, most paper wallet generation sites are actually phishing sites preying on novice crypto traders. Paper wallets for Ethereum are particularly inadvisable since there is a substantial lack of good options.
When looking for a secure cryptocurrency wallet, keep an eye out for the following four features:
- Private keys: You want to have a private key that only you possess. This is essentially the keys to accessing your coins, and security here is non-negotiable.
- Development community: Since Ethereum wallets are relatively new, reputation is huge. Look for an active development community that has a promising future.
- Simple user interface: Look for something that is easy to use. You also want to ensure that your wallet is compatible with different operating systems.
- Security and backup: Minimize your exposure to human error. Don’t be the person who makes the news for losing a million dollars in crypto by displacing their hardware wallet and forgetting to backup your information.
Save yourself the trouble and find a wallet that has the above four criteria.
The Best Ethereum Wallets of 2019
By now you must be fully versed in what wallets are and why they are important for you. But now let’s get into what really matters the most: the best Ethereum wallets in 2017.
To choose the one that you like best, it’s recommended to have a criteria. Here’s what we follow when choosing a new wallet for Ethereum or any other digital currency that we are using.
- Private Keys: These are very important as we told you earlier that they match with public keys and confirm the coins for you. So you need a wallet that lets you control where you store them.
- Easy to use interface: Cryptocurrency can be tough for many but even if you are a veteran, you need a smooth and easy to use user interface in your wallets.
- Solid track record of development and support: It’s important that you get a wallet that is supported by a development team. There have been instances where wallets have been abandoned by the company and you really don’t want to lose sleep over bad companies.
- Security and backup: We are all humans and we can lose our wallets due to myriad of reasons. So choose one that offers security and backup features.
So without much further ado, let’s get into the best Ethereum wallets.
TOP 10 Ethereum Wallets
Ledger Nano S
The Ledger Nano S is the most popular cryptocurrency wallet and for good reason. It asks for a PIN Code upon accessing the device, ensuring only authorized users can access its funds. In the event the PIN Code is guessed incorrectly several times, the device is “wiped”.
Don’t worry, your funds are safe, and can be accessed using the next level of security: the backup phrase.
If the device is lost, stolen, or wiped, you can access all contents of the wallet by entering the backup phrase included in the box. The backup phrase is typically between 12-24 words, which makes an enormous pool of possible phrases due to the way permutations in mathematics work.
To use the wallet, plug it in using the USB cable included in the box. The device only turns on when plugged into a computer. The Ledger Nano S works with all operating systems, so there is no need to worry if it will work on your computer.
On the top of the device are two buttons, that can be used to navigate its menus. The buttons are used to cycle left/right or up/down. By pressing both buttons, this is kind of like clicking “confirm” or “ok”.
Never purchase a Ledger Nano S from anyone or anywhere that is not the official website. Here’s a preview of the wallet:
Trezor was mainly proposed for Bitcoin storage initially, but later on, it started supporting other currencies, of which Ethereum is one of the majorly traded cryptos. It also supports other ERC20 tokens such as Ethereum Classic (ETC), Litecoin (LTC), Dash (DASH), Zcash (ZEC), Bitcoin Cash (BCH) and many more.
Trezor is one of the best Ethereum hardware wallets. To control the stored Ether in Trezor wallet, you’ve to use a web wallet, probably MyEtherWallet, which will feature Trezor integration.
Hence, if you want to interact with smart contracts in MyEtherWallet, you’ve to work in conjunction with the web wallet.
The biggest advantage of Trezor is that it is one of the most secure wallets. Other than having the common advantage of an offline wallet, it offers other features like advanced cryptography, 2-factor authentication, and the final screen allows you the revise the transaction before confirming.
Visit here to get more details about Trezor wallet .
KeepKey is also a USB enabled hardware wallet, that allows you to store not only Ethereum but other cryptocurrencies as well as Bitcoins, Litecoins, and other altcoins. Keep Key was launched in 2015 with a Hierarchical deterministic(HD) feature, which can generate an unlimited number of private keys.
Like Ledger Nano S, even this has an OLED display screen where you can recheck and confirm the transactions.
The setup process is very easy and simplified, you’ll have to download two chrome applications- the first one generates a wallet and the second one keeps you connected to Keep Key through chrome.
Visit here to get details about KeepKey hardware wallet .
MyEtherWallet is probably the most popular Ethereum web wallet. A web wallet is a wallet that works like an account on any other website. It lets you login on any device using a username and password.
Web wallets, however, are not secure at all and should really not be used at all. Just a week ago, there was an issue with MyEtherWallet where its DNS got hijacked. The attackers were able to steal $13,000 worth of ether and ERC20 tokens.
It’s also possible to get phished where you give a fake website your login credentials which they use to login on the real MyEtherWallet to steal your funds.
MyEtherWallet is a decent option if you decide to use a web wallet as it gives you the ability to access and write smart contracts. It also allows you to connect with Ledger Nano S or Trezor to access your Ether safely within MyEther platform.
Visit here to use MyEtherWallet .
Metamask is a very popular Ethereum wallet for desktop. It has received funding from the Ethereum Foundation and Consensys. It allows you to easily store Ether or ERC20 tokens.
There are a few issues to know about with Metamask.
One is that by using Metamask, nearly any website you browse can see that you have it installed and therefor understand that you are a cryptocurrency user and owner. While this does not sound too bad, it is simply a privacy leak that could make you a target for targeted hacking or malware.
Also–this goes for all wallets–but there are many fake versions of Metamask. Make sure you are downloading it directly from Metamask’s website.
Visit here to install MetaMask on your browser .
Mist is the official Ethereum wallet, and is also a wallet client that supports multisignature addresses. This can be quite convenient for advanced users. It is important to note that it does require you to download the entire Ethereum blockchain. This can be a bit of an issue for people using computers with less free hard disk space. When Mist is installed, it takes a while to get started because it synchronizes with all Ethereum nodes. After the sync is completed, it prompts you to set a secure password, which you are required to remember. If you forget this password, there is no other way to access Mist.
After that, the process is pretty typical as in any other wallet, and in the wallet, you will have access to a pair of public and private keys to perform transactions.
Your private keys are on the device itself, which means that you don’t need to worry about security. Supported platforms are Windows, Linux, and Mac. Mist also has ShapeShift built in. This allows you to exchange other currencies.
Visit here to install Mist .
Exodus wallet has become a very popular wallet in the cryptocurrency world. The main downside, though, is that its code is not open source. This means the wallet code has not been checked by devs from around the world and you have to place more trust in the Exodus developers.
Regardless, the Exodus wallet has a number of nice features. It supports a ton of coins so you don’t need to create a different wallet for each new coin you buy.
It also has a cool portfolio feature that allows you to see your crypto holdings in an easy to understand way.
Lastly, it has integration with ShapeShift which allows you to swap assets and coins from directly within the wallet.
Visit here to download Exodus wallet .
Jaxx was created in 2014, which believes in simplifying the blockchain and attracting the masses to its unique selling proposition. Jaxx is a multi-chain wallet which offers support for seven cryptocurrencies, namely Ethereum, Bitcoin, Dash, Ethereum Classic, DAO, Litecoin, Bitcoin Cash, REP and many more.
It is one of the best Ethereum wallets for ios and android users. Jaxx gives you full control over the wallet, which is highly accessible with desktop and mobile compatibility. It allows you to quickly convert between bitcoin, Ethereum, and DAO, and will also work for all the coins, and the Jaxx developers integrate in the future. It has been tagged as one of the best multi-currency wallets in the cryptocurrency wallet review.
Its available in the form of a desktop app, Android and iPhone apps and Chrome extension. Hence, it has all the features required to be one of the top Ethereum wallets-2019.
Visist here to install Jaxx wallet .
Coinbase (Web Wallet)
Coinbase’s wallet is simple to set up and very easy to use, and is one of the most popular Bitcoin web wallets. Coinbase has served 8.2M customers in more than 32 countries and has appeared in major publications such as Bloomberg and Time.
Coinbase has also included Ethereum support this year. One important thing to note is that they do not support Ethereum Classic (ETC).
Coinbase is a well-established option that offers instant currency conversions, recurring investments, and multi sig support. It is a cheap and fast way of storing Ethereum, and Coinbase’s mobile wallet is available on Android and iOS.
Follow these steps to use Coinbase:
- Register at Coinbase, and once you open a Coinbase account you’ll immediately see an ETH wallet appearing under the “accounts” tab.
- Click on “wallet address” in order to get your Ethereum public address.
- Transfer your ETH to the wallet’s public address.
- Store ETH on Coinbase.
Check here if their service is available in your country.
It is important to note that the private keys are not in your control because they are stored on Coinbase’s hosted servers. This is a huge drawback.
Coinbase is a decent way to store your ETH for short term. However, you should use a hardware wallet like Ledger Nano S or use Paper wallet method if you planning to hold Ethereum for long term.
Coinomi (android app)
The Coinomi wallet is a multi-currency wallet, which is fast and convenient to use. Their android app allows you to store hundreds of tokens and coins, including Ethereum, Bitcoin, Bitcoin cash, Ethereum Classic and 200 more tokens.
Coinomi is also an HD wallet, which provides you easy backups so that you can retain the ownership of your private keys. The best part is that you can protect your identity here as no personal information is required in the signing up process.ShapeShift integration is another prominent feature, providing for faster exchanges between your crypto holdings.
You can download Coinomi wallets from here.
Ethereum Gas (transaction fee)
In Bitcoin, to send a transaction we need to add a miner’s fee to it. This way, we incentivize the miners to include it in a block. In Ethereum, we must keep miners incentivized as well, for their contribution of computing power to the Ethereum supercomputer.
Just like a car, the Ethereum network runs on Gas. Each line of code that needs to be executed by the network will take up a certain amount of gas. Run out of Gas and the code stops running.
You specify how much Gas you’re going to use upfront, and you can’t refuel on the way. If your contract runs out of Gas because it’s written inefficiently or you miscalculated, it will just stop in the middle of the road. This system motivates Smart contract programmers to keep their code lean and optimized, since Gas costs money as we will soon learn.
Who collects this Gas?
Well, it goes to the miners as they are the ones investing computing power in order to update the ledger of Ethereum transactions (similar to what goes on in Bitcoin).
How do I get gas?
Gas isn’t something you can own, it’s just a unit of account to measure how much work is needed to run a line of code. Think of it as the equivalent of hours of labour.
Gas is paid in Ether, Now I know what you’re thinking – why not just price execution of smart contract in Ether, why do we need another virtual currency?
Well, Ether’s price is constantly changing, and if we priced contracts in Ether the price would be different each time we calculated it due to the fluctuating exchange rate. Imagine we’d price painting our house at 2 Ether, sometimes it would cost us $1000 and other times $2000. With Gas, running the same contract several times will always bring back a fixed amount of Gas to be paid just like painting the same house takes the same amount of hours every time.
How gas is calculated
So how much gas do you need to run a line of code? Easy…there are predefined amounts for each action you want to run in your code (an example can be found here). For example, sending Ether from one address to the other requires 21,000 gas units.
How much Ether does a 1 gas cost?
Now comes the tricky part. The price of 1 gas unit changes all the time depending on how crowded the network is. The same way an hour of labor would cost more if many people are looking for employees the Gas price rises when the network is crowded.
The “standard” gas price is around 0.00000002 Ether (or 20 GiGa wei). You can consider this the average salary on the market for an hour of labor.
If the Ethereum network is very busy and you want your contract to get priority in execution over other contracts you may over bid the gas price so that miners will have an incentive to include your contract in the next block. You’re basically saying I’m willing to increase your pay per unit of labor so you’ll give my work priority.
This is similar to how Bitcoin transaction fees rise when the network is crowded. You can check the current standard Gas price of the network here.
When sending out transactions in Ether you must specify a gas limit – meaning how much gas are you willing to pay at max for running our lines of code. This is done in order to protect you from depleting your funds in case your code has an error and runs endlessly and inefficiently.
You pay the gas limit upfront and there’s no option for “refueling”. If you overpaid you’ll get refunded, if you underpaid the contract will just stop in the middle.
So you choose how many units of gas and how how much to pay for each unit. If you don’t use enough units no miner will pick up your transaction since it doesn’t have enough gas from the get go. If, on the other hand, you choose enough units of gas but underpay for them it may take a lot of time for your transaction to go though.
In Ethereum, fees are a general term that refers to the gas used multiplied by the gas price you were willing to pay. In other words – the hours of labor times the wage per hour. The higher you’re willing to pay for gas the more Ether the miners will compete for running your code and the faster your transaction will be included in the blockchain.
Keep in mind that if an operation ran out of gas mid way it will halt (just like your car) and no Ether will be returned to you (just like a gas station doesn’t refund you even if you didn’t have enough gas to get where you want to go). This can happen if for example your contract needs to do some recurring function that keeps on consuming gas and finally runs out.
Before setting you free into the world of Ethereum wallets, let’s go over a few closing words of advice. Make sure you pay attention because these tips could end up saving you a ton of time (and coins) in the future.
- ALWAYS back-up your wallets. Many of the above wallets present the option to use a pneumonic or seed phrase just in case something happens to your wallet. This is pretty standard, but be sure to check if it’s not explicitly stated. It’s silly to lose all your coins because you lost your phone or fried your hard drive.
- Add extra security. Simple extra security measures such as 2 Factor Authentication through Google Authentication could save you from being hacked in the future. Keep in mind that text message verification isn’t as secure a method since phones can be cloned.
- Keep your software updated. This is why it’s important to look for an active development community for whatever wallet you choose. These communities are dedicated to not only making wallets more robust and user-friendly, but they also prioritize security. Take advantage of this. Make sure your software is up to date.
Ethereum is only 3 years old and is still pretty young in the market. That’s why the wallet ecosystem has very limited options right now.
But I am very sure as the technology matures, new Ethereum wallets and will be available for each type of user.
Be on the lookout for exciting Ethereum news!
I hope this list of Ethereum wallets will help you make the right decision when choosing where to store your Ether tokens. I would love to hear your experience if you have used any of the above wallets or any other Ethereum wallet.
Do let me know your thoughts in the comments below!
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