Crypto-wallets are essential tools to be able to handle and manage our crypto funds and they require some essential knowledge from all those who wish to develop their finances in this world.Source: theweeklytrends.com
Selecting first and then choosing the most suitable wallets is a task that can be complicated at first. That's why it's a good idea to start with a wallet in the form of an App downloaded to the cell phone, which is custodial, that means that we only need to know our access key and it is not necessary to manage and save the private keys for their recovery done by a beginner user since that involves greater knowledge to manage.
Some of the custodial wallets are developed by Exchanges (trading platforms) that have strict identification rules and can cancel our crypto account unilaterally even without prior notification to the user, even if they return the deposited funds later. This creates some sort of insecurity especially for people who are not used dealing with these tools. In the case of custodial crypto wallets, they are not much different from conventional bank accounts where our money is in their hands with the power of performing certain actions on our accounts unilaterally.
Therefore, for those who are more used to crypto wallets it is recommended to have cold wallets (non-custodial, because it is the user himself who takes care of them), which have a higher level of security but require greater user’s responsibility to manage their crypto funds
Below we will present a very simple diagram that illustrates the different types of crypto wallets in relation to their security and ease of use:Source: Criptonoticias
In the chart above we can see that at the top of the pyramid we have the safer devices but more difficult to use and down at the bottom we have the exchanges wallets that are custodial and more intuitive and user-friendly. In between we see the online wallets that we can connect with them through the browser, and the software wallets that we can download into the computer and run the program every time we need to access our funds.
There are cases where some software applications or online wallets can be integrated with cold wallets so that they can be viewed in these applications even if the USB device is not connected. These are the following:
- The Trezor cold wallet can be integrated with the Exodus software wallet.
- The Ledger Nano cold wallet can be integrated with the Blockchain online wallet.
We therefore have available the following cold wallets in the market which are in order of popularity and market share:1st)Trezor, both model 1 and T, which are available on its official website and in Amazon. It was created by SatoshiLabs. In case of loss or damage 12 or 24 keywords (called seeds) are available to restore the wallet once another device is purchased. Although there is nothing 100% secure, Trezor is the most secure of all, because even if the computer has malware it cannot copy the keys to steal the funds. A large number of cryptocurrencies can be stored, including ERC20 tokens. It supports Windows, Mac and Linux operating systems (OS).
2nd) Ledger Nano X and S, these flash drives are relatively easy to use, and also have a recovery system with keywords or seeds. It can be obtained from their official website or from Amazon. And it is supported by the same OS as the previous device. These devices offer similar features to Trezor but they both are a little less user-friendly to operate and recover the wallet with the seeds. The difference between these two ledgers is the size, the X is larger (128x64) and the S (128x32) smaller. It is highly appreciated if the screen is bigger to see better the transactions.Source: medium.com
3rd) KeepKey, is a device that appeared on the market relatively recently and does not offer many advantages over previous models, the device is heavier and bulkier but with a simpler user interface. It supports the same OS and practically the same cryptocurrencies.Source: keepkey.myshopify.com
4th) Ngrave Zero, a new cold wallet will soon be on the market. It is expected to be launched in October this year with numerous advantages over previous ones. It promises even more security than the other models, since none of the previous ones is infallible, because it works totally offline. In fact, the other ones are semicold wallets since they are not operate totally offline. It uses new nano-technology systems and hardware security. It is presented with an innovative design and with several complements to help certain processes. It also has an app synchronized with the device.Source: ngrave.io
A common feature to all the cold wallets is that the private key and seeds are stored offline, although once they are connected to a computer they are no longer in cold mode, that’s why they are considered semi-cold wallets and therefore they could be "hacked" if they are connected to the computer long enough to be able to break the PIN key by the hackers and the intruders could move the funds to other external wallets in the background without being noticed by the user. This vulnerability is apparently solved by the last device called Ngrave which can work offline totally.
By using these types of devices we take full responsibility for our crypto funds and although we may have a high level of security, cybercriminals have increasingly sophisticated online systems and special programs and can penetrate any device if we give them the opportunity to do so by lowering the security levels of our devices, especially cell phones and computers.