Software Wallets You Can’t Live Without
Today we are going to talk about wallets; and its’ not your Grandpa’s old musty leather wallet, either. Cryptocurrency wallets can be compared to traditional wallets in the sense that; just as one stores physical cash the other stores cryptocurrency (which can be thought of as the digital cash of the Blockchain).
The two most popular types of wallets are software wallets (not tangible and connected to the internet) and hardware wallets (tangible hardware that is not connected to the internet). While all cryptocurrency wallets are encrypted and require a specific sequence of characters (called a private key) in order to send or receive funds; the user experience is very different for each.
It’s’ a good thing you came to this site because we are going to give you the scoop on cryptocurrency wallets; the best software wallets and hardware wallets money can buy… because you know us, we only cover the crème de la crème (Impressed? I’m 2% fluent in French).
I have also typed into Google the phrase “Best software wallets” before when I was just starting to get into Cryptocurrency; the truth was, at the time I did not even really understand what a software wallet was! A software wallet is a type of crypto wallet that (1) has no physical body and is composed of code (2) runs on the operating system of a personal device (be it a computer or smartphone) and (3) is connected to the internet.
To put it all together, software wallets are basically computer code that, when run on an operating system, are expressed as applications that can interface with Blockchain wallet addresses that store cryptocurrency. This type of wallet is extremely user-friendly, can be easily restored and are typically free.
Top 5 Best Software Wallets
This popular cryptocurrency software wallet has been free for download since 2011 and has a responsive interface with small installation requirements; making it an option for people with older computers or limited storage. Electrum is available for Windows, Android and Linux users and offers 2-factor authentication (which is a huge security deal…in a good way). It also allows for multi signature transactions and runs on decentralized servers; meaning, the wallet has no one point of attack so it will never be unavailable for use.
Due to its ease-of-use and stunning visual appeal the Exodus wallet has proved to be very popular application with the crypto community (I use it). Exodus is actually (1) a cryptocurrency wallet (2) portfolio that displays the amount of money (per coin) you have stored in your wallet based on current market values and (3) an exchange where users can use built in Shapeshift integration to seamlessly swap between coins. The wallet is very easy to use and has an intuitive flow which will make even a crypto novice feel like a pro. The main downside is that Exodus is only available on desktop and does not have a mobile application at this time.
Created in 2014 by Anthony Di Iorio (Ethereum co-founder), Jaxx, is a perhaps one of the friendliest software wallets available. It is particularly known for the ability to storage a plethora of cryptocurrencies (25 to be exact). Jaxx shares a similar feature with Exodus in having integrated Shapeshift functionality; allowing users to trade Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, Dash and Zcash for various other Cryptocurrencies. A 12-word “Masterseed” is generated to help you manage the private keys for digital assets. Jaxx is available as a chrome extension for both Windows and Mac and also has a mobile app that can be used by both Android and iOS users.
MyCellium, the functional Bitcoin wallet, is a mobile application that that allows users bank-grade security and privacy. It was the Winner of the prestigious Blockchain in “Best Mobile App” award in 2014; hereby making it one of the most innovative and safest cryptocurrency software wallets currently on the market. It has its haters because it does not have a desktop interface; however, that seems like making a mountain out of a mole hill. This software can also integrate with a Trezor wallet to transact funds with the added security of a hardware wallet.
GreenAddress is a software wallet provides a variety of valuable features for new and seasoned crypto investors alike. Users can use their created custom username and password to quickly check your Crypto balance without exposing your wallet; which comes in handy when you are in a hurry or on an unknown third party computer. It has been dubbed “the best way to begin for for beginners” because it is considered the wallet with an extremely user-friendly/flexible interface. GreenAddress also offers 2-factor authentication which provides an added layer of security when transacting online.
Dangers of Using a Software Wallet
Let it be known, just like cash, Cryptocurrency transactions are irreversible; so users are always advised to be extra careful when carrying out any transaction. This not only means that any transaction you willingly authorize is finale but so are the transactions initiated by a Hacker should they come into possession of your private key (so guard it with your life).
The main criticism we have is that, while free, Software Wallets are applications that are run on an operating system which interacts with the world wide web. Due to this fact, the device on which the wallet application is run can either (1) become infected with malware, spyware or key loggers that can be used to steal your authorization password (2) is already infected with such malicious code.
Software Wallet security and resiliency to cyber attacks, in programming terms, are ultimately at the mercy of its developer code. It is a universal truth that all code is not created equal and while the software wallets referenced in this article have been widely reviewed and determined to be robust by its users, it still does not completely address the main issue; the risk of an infected personal device.
If you do decide to download and use a Software wallet please make sure to invest in a robust antivirus program and internet VPN (shout out to my Windows users)!
You Are Not Alone
Look, we have all been there before. You probably heard about Cryptocurrency, bought some from an online exchange and decided to let it sit there on the wallet address provided by the exchange service you initially used. After doing some research you learned that centralized third-party exchange servers hold your private keys and are at risk for being targeted by hackers due to the large amount of cryptocurrency they hold.
In an attempt to further protect your investment you download a free software wallet hoping that would solve all your issues; only to be disappointed by learning that hackers can STILL get to your nest egg by compromising the device on which your wallet is run on. Before you curl up in the fetal position, whispering to yourself “Is anything safe? When will the madness end?”; just keep reading.
Having Hacker Nightmares? Get a Hardware Wallet!
This is the second type of wallet is more in line with the individual that is looking to sacrifice some convenience for improved security. A hardware wallet is an encrypted physical device, that directly interacts with blockchain wallet address(es) and has a separate screen in which a wallet pin is inputted. What this really means is that your pin and private key are never exposed to the internet or can be compromised by an already malware infected personal device. Sounds too good to be true? Well I hate to break it to you; but, its’ not.
Why You Need A Hardware Wallet
I bet you are thinking “Software wallet? Hardware wallet? I just want my crypto to be safe!”. Let’s put it this way, Hardware wallets are heavyweight champs of the world when it comes to protecting your crypto funds. In addition to being never exposed to the internet they also require manual actions to confirm transactions (such as physically pressing buttons on the device). This makes them much harder to hack remotely so they are best for storing the bulk amount of your crypto stash.
Hardware wallets are immune to computer viruses, requires physical authorization for each transaction and never exposes your private key to anyone (even you). When connected to your computer though a USB cable the secure encrypted element within the wallet still maintains a boundary and keeps it offline. While they are expensive, when compared to the free software wallet option, they are well worth it for the peace of mind you get for knowing your Cryptocurrency is safe and sound.
Okay, Get To The Point!
It is no secret, cryptocurrencies are taking the world by storm and are posing themselves to be a global payment system for personal and business transactions alike. Due to the fact that cryptocurrency is proving to be an extremely lucrative investment it is more important than ever to exercise caution and invest in secure storage solutions. Each day the price of cryptos grows makes your funds more and more of a target; don’t fall victim to cyber theft and get a wallet that will actually keep you safe.
There are some quality software wallets out there and they perform their intended functions very well; however their success is largely based on you. The million dollar question is how well can you keep you personal device’s operating system clean from viruses and malware? If you are a computer Scientist then chances are you might be able to save a few buck by sticking with a software wallet. For the rest of us (myself included) it may be a wiser idea to use a hardware wallet; because why worry if you do not have too?