Hard wallets, mobile wallets, and browser wallets.
Wallets are options of keeping your crypto coins/tokens under your control. Basically, you are your own bank/steward and are solely responsible for what happens to your money. Don’t like your bank? Don’t like/trust your crypto exchange? Then a hard wallet might be an option for you.
Disclaimer: I am not a financial advisor. The information on this site is for informational purposes and isn’t financial advice. I cannot guarantee that you will have the same results as I have nor can I guarantee that the information shared here is appropriate for you. My opinions are my own despite any referral links that may be within the blog. I am not also not a tax consultant or a CPA. As they say in the crypto world, DYOR.
Any good wallet will give you a seed passphrase. It is important to note, that without your recovery seed passphrase, you generally lose access to your money forever. A seed passphrase is a 12 or 24 word combination that will restore or give access to your funds. Anyone with access to the seed passphrase will have control of the wallet. If you share your passphrase, then you are giving someone full access to your money. If you upload your passphrase or get it stolen or have it recorded digitally and it gets hacked, then your money will probably get stolen. A good practice is to write down your passphrase as you make the wallet and double check that you wrote down all the words correctly and save and store the passphrase in a safe secure location (like a safe!).
Personally I have only used one, Metamask. Metamask is an Ethereum based wallet that can also handle other chains like Binance Smart Chain. It is generally accepted thanks to the Uniswap popularity of 2020. Metamask is installed as a chrome/firefox extension. Basically you go to the website, download the extension, save the passphrase, set up a password, and you are ready to start trading. The password you set up is only for that computer, so if you upload your seed passphrase onto a second computer/device then that specific password will not automatically convert over. It is a local password in order to secure your wallet from people accessing your account on your specific computer. If someone has your passphrase, then it doesn’t matter that they do not know your password because every device will have you make a new password. You are able to use a credit card and buy crypto straight on your Metamask but generally people recommend buying crypto on an exchange and importing Ethereum in. Metamask is one of the better options for buying crypto on Uniswap on a computer (and probably BSC too). Some people are very skeptical of browser wallets because they think it is less secure but I am not aware of any hacks of Metamask accounts so take that for what it’s worth.
I haven’t used a couple desktop exchange wallets like ViteX and Waves but focusing on more mobile wallets… You have a crypto specific wallet like a Nano, Banano wallet, or Theta wallet. Then there are general wallets that support a wide range of products, like Coinbase, crypto.com, or Trustwallet. These wallets are decentralized from the exchanges and you are responsible for your keys/wallet. The advantage of a wallet from a leading exchange is often they are linked to your actual exchange account which allows you to transfer to and from very easily. On the negative side, I have read reddit posts of people downloading a fake wallet and losing their money when they go to deposit into the wallet. People are also skeptical of the security of mobile wallets (but in all fairness crypto enthusiasts are skeptical about most things). Then there is the fact that some mobile wallets don’t actually use a seed passphrase but tie it to your phone number which could be good or bad (losing your phone number and not having a way to recover it or getting your phone number phished or even your phone hacked).
Two hardware wallets that are leading in competition are Ledger and Trezor. I am going to focus more on the ledger wallet but I think I’ve seen a more general like towards trezor after the 2020 personal information leak from Ledger. The concept of your Ledger is that you only upload the passphrase once when you go to install the hardware and then your keys stay safe and locked away. The ledger itself (which looks and feels like a USB), keeps the privacy keys hidden and you only authorize transactions using your ledger by inserting a 4 or 8 digit key code when accessing your ledger. Personally, I love my ledger but what are the downsides? I have read time and time again when people download the wrong ledger program and lose all their money. Generally, someone downloads a false program from somewhere other than the main Ledger website and when they insert their seed passphrase they lose everything. The best advice I can give, don’t follow ledger links to download the software. Type in the website carefully which is located in your instruction manual. One downside for Ledger is that they had a privacy leak late summer 2020. Basically, for some stupid reason, Ledger kept a record of people who had purchased a ledger on their website with their private information (phone numbers, email addresses, addresses, etc). Ledger came under a lot of fire for this because as a security company people thought it was very reckless and needlessly to store client information on their database. It is worth noting that the ledger software itself has never been hacked but this was still an issue because it opened the doors for many people to receive extra phishing attacks. Personally, I still use my ledger and I enjoy it but it is a consideration when looking at the history of ledger now.
If you are looking for a Trezor option, feel free to use my referral link
Choosing which type of wallet is a personal decision that you will have to do. Regardless of the type of wallet you choose (look up bitcoin paper wallet on google news feed and you’ll probably see some bad articles), there are always bad stories of people losing their money. It mostly has to do with people not keeping their passphrase secure but there are phishing stories and stories of malicious wallets. Choosing a reputable source to store your money would probably be the safe bet while having multiple wallets. That way, if you do get compromised, not all of your money gets stolen. Why not just keep your money on Coinbase? Has Coinbase ever been hacked? Off the top of my head, coinbase has never been hacked. Popular exchanges like Kucoin and Kraken have been hacked but they had enough insurance to cover their clients accounts. The fear is, what if they didn’t have enough money. Is there such a thing as an exchange that is too big to fail? Obviously the answer should be no but with that being said, coinbase (and some other exchanges) have stopped and saved people from losing thousands of dollars. I have read positive stories of people sending money to a scam off of youtube or something where they are supposed to send in X Bitcoins and Elon musk will send back x2 instantly (or some other person) and Coinbase froze the transfer. These are always scams. Never send your money to another person with the intent of getting more back instantly. Never give your passphrase to another person. Never ever ever. Bottomline, if you want to manage your own money you have yourself to blame for your mistakes. Stories where someone put the wrong ETH gas fee and sent $5 worth of ETH and paid millions in GAS fees? You have to own up to that. It is not hard but if you send money to a wrong crypto address then you will lose your money. If you send money to the wrong wallet, you may lose your money. Luckily a lot of these exchanges have saved people’s money that got stuck in limbo land but not always. Again the point? If you want to control your own money and be responsible for it, then find a wallet that suits your needs. Personally? I have like 20 different wallets/exchanges that I use. It is pretty intensive when I am managing my finances but there is a reason for it. Good luck out there!