Ethereum Wallets Explained: A Guide to Storing ETH

Ethereum Wallets Explained: A Guide to Storing ETH

With the full launch of Ethereum 2.0 on the way, it is such a good time to invest in the ETH for good long-term profit. With this in mind as a beginner, you might be faced with the challenge of how to store your Ethereum and some of the best wallets to use.

In this guide, I have clearly explained what Ethereum wallets are and also the safest way to store your ETH, and the best wallets to use in 2022. I have factored them in terms of security, ease of use, and added features.

Ethereum broke its all-time high in 2021 when the price rose to $4,800. Recall that it was sold for about $0.311 back when it did its ICO in 2014. The price surge offered investors a 1,408,903% return on investment.

Apart from the price growth, Ethereum is also regarded as the most valuable cryptocurrency and has also enabled an entire ecosystem of dapps (decentralized applications) to grow from its technology. This goes to show you that investing in Ethereum is a good choice.

What are Ethereum Wallets?

Simply put, Ethereum wallets are pieces of computer application or hardware that store the information you will need to access your ETH funds. A wallet allows you to interact with your Ethereum account. Picture it just like an internet banking app.

Your wallet allows you to check your ETH balance, perform transactions, and also connect to other applications. In summary, it allows you to manage your account on the Ethereum network.

The Ethereum wallet has a private key that could be looked at like a password for your banking app. This private key should be kept safe at all times and should never be shared with anyone.

The wallet also provides an address that could be looked at like your account number for your banking app. The address is a string of numbers and letters that starts with an “0x.” If Ethereum is to be deposited into your wallet, the address is what you provide for that to be done.

A wallet could be either hardware or software. Whichever one you decide to use should depend on what you want and what they can offer. A user can control as many addresses as necessary on the Ethereum wallet.

There are several types of Ethereum wallets available for you to choose from. Some of them are applications on your desktop or mobile, and others are held offline on hardware devices or pieces of paper.

Why is security important in choosing a wallet?

The way the blockchain technology is built makes it impossible to have a reversal or cancelation after sending funds and it can also be very difficult in tracing stolen funds. This reason is enough for you to choose a very good wallet with the best security.

Types of Ethereum Wallets

There are different types of wallets such as:

  • software wallets
  • hardware wallets
  • paper wallets
  • web wallets

Software wallets: A software wallet is an application or a program installed on your mobile or computer. Once installed, the software wallet generates a seed phrase which is usually a series of 12 or 24 randomly generated words. This phrase serves as your proof of ownership of the wallet and can also be used to access your wallet on any device.

Hardware wallets: Unlike the software wallet, a hardware wallet is not installed on your computer, rather it is a small plug-in device and it serves as a portable key to access your crypto funds from anywhere. They are also referred to as cold storage.

Paper wallets: A paper wallet is a way of storing your cryptocurrency offline. It is a piece of paper that has your public and private keys printed on it. Sometimes, they come with a barcode that you can scan by using an app.

Web wallets: These are wallets that run on your web browsers just like any other website with an internet connection. They exist only online.

The safest way to store your Ethereum

All the above-mentioned types of wallets have their pros and cons, but in general, it is safest to store your ether in a cold storage hardware wallet. This is because it is offline and can only be accessed when connected to a computer using a USB cable (as in the case of the Trezor wallet). As a result, it makes it less prone to hacking.

Related: Top 5 Crypto Wallets

Top 7 Ethereum wallets in 2022

I have carefully listed below 7 good Ethereum wallets you can use to store your ETH in 2022.

  • Metamask
  • Trezor
  • Exodus
  • Electrum
  • Ledger Nano
  • Coinbase
  • Mist

Metamask: Metamask is a cryptocurrency wallet that is available on both desktop and mobile. If you are new to the crypto-world and have little or no idea how to buy, sell or manage cryptocurrencies in general, then choosing Metamask might just be a good option for you.

You can create a password on Metamask in case you forget your previous one.

Trezor: This is an example of a hardware wallet. It is the oldest hardware wallet available and probably the safest way to store your Ethereum and other cryptocurrencies. Your ETH is stored on a secured electronic chip.

You can activate this chip by using a unique PIN that protects your private key. Apart from Ethereum, the Trezor wallet supports other cryptocurrencies like Bitcoin, Litecoin, Binance coin, Tether (USDT), etc.

Exodus: Exodus is an example of a software wallet. It is probably the best software crypto wallet available to store your ETH and other cryptocurrencies. The wallet is beginner-friendly and it comes with an inbuilt exchange with a very simple-to-use interface.

It is available on mobile and on desktop too. The Exodus wallet supports multiple operating systems, from windows to Linux to Mac. You can connect your Trezor cold storage with Exodus and run it as software. On Exodus wallet, you can swap other cryptocurrencies as well.

Electrum: Electrum is an open-source wallet and is one of the oldest Bitcoin wallets available. The wallet also allows you to connect with other wallets like Trezor and others.

Electrum is a software wallet that is available on desktop and mobile as well. Though it is not very beginner-friendly, it is very good for experienced users.

Ledger Nano: Created in 2016, it has quickly grown to become one of the best wallets for storing cryptocurrencies. It is the best wallet for mining Ethereum. It is a hardware wallet and it stores your private keys in a physical wallet.

Apart from Ethereum, the Ledger wallet supports other cryptocurrencies like Bitcoin, Litecoin, Dogecoin, Ripple, Bitcoin Cash, etc. The Ledger Nano wallet is very beginner friendly and has very good security.

Coinbase: Coinbase is a cryptocurrency exchange platform that also comes with a built-in wallet. It is a hot wallet that allows users to buy, sell and store Ethereum and other cryptocurrencies like Bitcoin, Litecoin, Ripple, and others.

Coinbase is very beginner-friendly and is one of the first crypto exchange platforms created.

Read my in-depth Coinbase review here.

Mist: This Ethereum wallet was created by Ethereum developers that allow users to buy Ethereum and Bitcoin directly using fiat currencies. It is a hot or software wallet that is available for desktop applications. It allows you to download the entire Ethereum blockchain on your device.

Conclusion

Ethereum wallets are computer applications or hardware devices that enable you to store the information you will need to access your ETH funds. There are different types of wallets which include hardware wallets, software wallets, and paper wallets.

It is very important to carefully choose an Ethereum wallet with very good security as it is almost impossible to reverse or cancel an already completed transaction or recover stolen crypto.

Some of the best Ethereum wallets to use in 2022 include, Trezor, Electrum, Mist, Coinbase, Ledger Nano, Exodus, and Metamask. Choosing a wallet depends on your needs and which one works best for you.

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Victor Nnamdi Igbor "Swaezy" is a crypto enthusiast and founder of 36crypto. He is quite experienced and has been in the blogging industry for 8 years. He is an easy person and when not working, loves to have a good time.

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