What are crypto wallets?
A crypto wallet is, essentially, a means of storing information necessary to complete transactions with Bitcoin and other cryptocurrencies.
One could, of course, keep track of keys on paper – known as a ‘cold wallet’. Physical devices similar to a USB drive, known as hardware wallets, offer a similar solution – they don’t require an internet connection, so they’re considered one of the safer options.
But most of us expect our payments and transactions to be carried out in smoother, easier, and more convenient ways. Both paper and hardware wallets are impractical for frequent use or paying for products and services ‘on the go’.
This is where digital crypto wallets come in. Known as ‘hot wallets’, these apps enable users to store, send, and receive cryptocurrency quickly and easily, just like a banking app enables you to access your traditional bank account.
Features of crypto wallets
From an everyday-user’s point of view, three of the most important features to consider when looking for a crypto wallet are the platform the wallet uses, compatibility with different cryptocurrencies, and whether the wallet is custodial or non-custodial.
Like most apps and software, crypto wallets are often platform-specific. This means they might work on a mobile (iOS and/or Android), on a desktop system, or both. Depending on how you prefer to access your funds, this will be one of the determining factors for your choice of wallet.
Then there’s the issue of whether a wallet supports your preferred cryptocurrency. Bitcoin (BTC) is still by far the most popular one, but there are plenty of other options – such as Ethereum (ETH) or XRP (XRP). Not all wallets support every cryptocurrency and most are limited to a specific one.
Lastly, the issue of custodial vs. non-custodial. This feature is often overlooked when focusing on everyday ease of use, but it’s a crucial distinction that directly impacts the security of your account. In the case of custodial wallets, your private keys are being stored by a third-party – much like a broker service. Transactions are often instant, but at the cost of dependence – you do not have full control over your funds. Meanwhile, non-custodial wallets are not dependent on a middle-man, and are therefore considered safer. Users of non-custodial wallets are solely responsible for their private keys, meaning they are fully in control of their funds.
Choosing a wallet that covers all bases
When choosing a crypto wallet, it’s important to think ahead and make sure it has the widest functionality possible without compromising on security. Let’s take OWNR Wallet as an example, to illustrate the benefits of choosing an all-in-one wallet.
Unlike the official Bitcoin wallet and other third-party options, OWNR supports ten basic coins (BTC, BCH, BCHSV, ETH, ETC, LTC ZEC, DASH, Doge, Omni) and all the 240K+ ERC-20 tokens, enabling you to manage all of your virtual currencies in one place. The wallet also offers the option to purchase cryptocurrency directly through the app, using a debit or credit card – so you can conveniently top up your cryptocurrency balances without having to switch to another platform.
As OWNR is a cross-platform wallet, you can access your account from both your phone and your computer. This provides added security: if something happens to your phone, you can still manage your funds from your computer. Because OWNR is a non-custodial wallet, only you will have access to your private keys – and in contrast with most other non-custodial options, OWNR is easy to use even for a beginner.
Daily use of cryptocurrencies is on the increase. Interestingly, it’s not just large corporations that allow cryptocurrency payments: a 2020 survey by HSB found that one third of small American businesses provide users with the option of paying in cryptocurrencies, not all of them supporting Bitcoin. Choosing a multi-functional crypto wallet from the start will enable you to take advantage of secure payments without having to spread your funds over multiple platforms.