Crypto can be overwhelming.
To help kickstart your crypto journey, we’ve created this guide, in which we’ll discuss what crypto wallets are and which ones you should consider.
Understanding the various types of crypto wallets is crucial, as it enables you to select the option that best aligns with your security preferences and usage habits.
Now, let’s dive in.
Different types of crypto wallets
A crypto wallet is a software tool to access, manage, and interact with crypto, NFTs, and decentralized applications (dApps).
Broadly, there are four main types of crypto wallets:
Custodial wallets
Custodial wallets are integrated within centralized exchanges such as Binance, Coinbase, or Kraken. In these setups, the exchange holds and manages the private keys on your behalf, simplifying the overall experience. While this arrangement offers convenience, it requires you to trust the exchange's security measures and policies. Notably, incidents such as the Mt. Gox or Bybit hacks, or FTX meltdown, highlight the potential risks associated with custodial wallets.
Non-custodial wallets
Non-custodial wallets, such as Phantom and MetaMask, grant you full control over your private keys. This autonomy enhances security but also places the responsibility of safeguarding keys solely on you. However, non-custodial wallets are favored by those who prioritize decentralization and personal control over their assets.
Hot wallets
Hot wallets are connected to the internet, facilitating easy access and quick transactions. They can be either custodial or non-custodial. While their online nature offers convenience, it also exposes them to potential cyber threats. Therefore, you should exercise caution and implement additional security measures when using hot wallets.
Cold/hardware wallets
Cold wallets, or hardware wallets, are physical devices that mostly remain offline, providing enhanced security by isolating private keys from the internet. They can be custodial or non-custodial, depending on who controls the private keys.
Choosing a crypto wallet: What you need to know
Selecting the right crypto wallet depends on various factors, including security needs, frequency of transactions, and technical proficiency.
Hot wallets are suitable for daily transactions due to their accessibility, while cold wallets are ideal for long-term storage of significant assets. However, both solutions come with trade-offs between convenience and security.
We've compiled a list of the best hot crypto wallets below, ensuring you choose one that aligns with your specific requirements.
Best hot crypto wallets
Phantom
Since launch, more than 15 million people have chosen Phantom (that’s us!) as their dedicated wallet, making it one of the most proven and popular wallets in crypto.
Some of our most popular features include multi-chain capabilities, Cross-Chain Swapper, NFT experiences, and security measures.
Multi-chain capabilities
Although our wallet originated on Solana, we also support the Bitcoin, Ethereum, and Polygon blockchains as well. This means you can experience Solana, Bitcoin, Ethereum, and Polygon hassle-free through one single interface—your Phantom wallet.
Token Pages
With Token Pages you can easily search and discover tokens that are trending within the Phantom community, enabling you to stay updated on emerging trends. Also, Token Pages display key metrics such as market capitalization and trading volume, offering a transparent view of a token's performance and facilitating strategic trading decisions. Plus, individual Token Pages can be shared with your family and friends via iMessage, Telegram, and Instagram—giving you a seamless and fun way to get everyone involved in crypto.
Crosschain Swapper
Assets such as tokens and NFTs are exclusive to the blockchain they were created on. For example, Ether (ETH) or Bored Ape Yacht Club (BAYC) NFTs are native to the Ethereum blockchain, while SOL and Claynosaurz NFTs are Solana-specific assets. Other assets such as stablecoins—USDC or USDT—are available on multiple blockchains, however, USDC on Ethereum uses different tech than USDC on Solana.
But what if you’d like to use the USDC you have on Ethereum to trade coins, tokens, and NFTs on Solana? That’s where our Crosschain Swapper comes into play. Cross-Chain Swapper allows you to convert tokens from one chain to another—fast and with low fees.
Security measures
One of the founding pillars of crypto is self custody, the notion that you, the user, should maintain total control of your assets at all times. In order to uphold this vision, we’re committed to all things security. Some of our security features include:
- Scam detections for malicious transactions
- Open-source blocklist to avoid phishing sites
- Non-tracking of personally identifiable information
- Code audit by Kudelski Security, a top software auditing firm trusted by technology companies worldwide
- Bug bounty program for white-hat hackers.
Exodus
- Intuitive design: Exodus prioritizes user experience, providing a clean and accessible interface suitable for both newcomers and seasoned traders—enabling you to manage your crypto assets with ease.
- Multi-chain capabilities: Exodus also supports multiple blockchain networks—including Bitcoin, Ethereum, and Solana—eliminating the need for multiple wallets, streamlining asset management.
- Integrated exchange services: Exodus features built-in exchange functionality, enabling you to swap between various cryptocurrencies directly within the wallet.
MetaMask
- Consensys backing: MetaMask is developed and maintained by Consensys, the backbone of the Ethereum blockchain. Consensys was founded by Joseph Lubin, who contributed heavily to Ethereum in its early days.
- MetaMask Snaps: Snaps are in-wallet applications built by third-party developers for MetaMask. Snaps can connect to blockchain protocols beyond Ethereum, show insights about transactions, display notifications, add new privacy and identity features, and much more.
- Open source: MetaMask's software is open source and accessible to the public.
Backpack
- Multi-chain support: Backpack is available for Solana, Ethereum, and other blockchains.
- NFT collection locking: As soon as this feature is activated, transaction signature requests for selected NFT collections in users' Backpack wallets are automatically rejected, thwarting wallet drains and keeping assets safe at all times.
- Backpack Exchange: The Backpack wallet is the most compatible wallet for the Backpack exchange, as both are built by the same team.
Trust Wallet
- App access: With Trust Wallet, you don't need to browse the internet to access different blockchain apps, you can access them right from your browser extension or mobile app.
- Better swaps: You can swap tokens and coins in your Trust Wallet with greater choice and better prices than would be the case with MetaMask.
- Open source: Trust Wallet's software is open source and accessible to the public.
Best cold/hardware crypto wallets
Ledger
Ledger is one of the most widely-used hardware wallets. It offers models such as Flex, Stax, and Nano X, all renowned for their robust security features. The devices support a wide range of cryptocurrencies and integrate with various hot wallets such as Phantom, providing a secure environment for managing digital assets.
Trezor
Trezor is a pioneer in hardware wallets, offering models such a sSafe 5 and Model One. These devices are acclaimed for their security, user-friendly interface, and support for numerous cryptocurrencies, making them a popular choice among crypto enthusiasts.
Keystone
Keystone is a hardware wallet emphasizing security and open-source development. It features a touchscreen interface and QR code communication, eliminating potential risks associated with USB or Bluetooth connections.
SafePal
SafePal provides hardware wallets that combine security with affordability. With support for multiple cryptocurrencies and an easy to use interface, SafePal offers a comprehensive solution for secure asset management.
KeepKey
KeepKey is a hardware wallet known for its sleek design and straightforward user experience. It mainly supports Bitcoin but has recently expanded its support for other cryptocurrencies as well, allowing for a holistic and seamless user experience.
How to keep your crypto wallet safe?
Beware of scams and phishing attempts when interacting with crypto, NFTs, and DeFi.
To help protect you and your assets, we’ve prepared operations security (OpSec) best practices when dealing with wallets.
- Secret phrase: When you first set up your wallet, a series of 12 (or more) random words will be generated. This series of words is known as the “secret phrase.” It gives anyone access to your digital assets in your wallet—no password required. But it also helps you to access your wallet if you were to lose the device you installed it on. Never share your seed phrase with anyone, no matter what.
- Wallet setup: When you create a hot wallet, connect and link it to your cold wallet (e.g. Ledger or Trezor) beforeyou do anything else. By doing so, you can be sure that the connection between your hot and cold wallets is safe and has not been tampered with.
- Asset management: When you buy digital assets which you'd like to keep for a long time, you should transfer them from your hot to your cold wallet. By doing so, you disconnect your digital assets from the Internet. Now, if your hot wallet is hacked and the perpetrators want to “drain” it (steal your digital asset), they can’t.
- Wallet operations: Always create multiple hot wallets for multiple use cases, such as trading, minting NFTs, and connecting and using apps.
How to set up a Phantom wallet?
If you’d like a friendly multichain wallet for crypto, NFTs, and DeFi, try us out!
We offer browser extensions for Firefox, Chrome, Brave, and Edge, as well as apps for iOS and Android.
To get started, download the Phantom browser extension or mobile app.
How to set up Phantom on desktop:
- Follow the steps in your respective extension store to add Phantom to your browser
- Open the Phantom browser extension and select “Create New Wallet”
- Key in a secure password and select “Continue”
- You will be presented with your “Secret Recovery Phrase” (seed phrase)
- Be sure to store your Secret Recovery Phrase in a safe and secure location!
- Your Secret Recovery Phrase is the MOST important part of your new wallet:
- Whoever has access to your Secret Recovery Phrase will have access to the wallet’s funds
- If you lose your Secret Recovery Phrase, you will lose access to your wallet and its funds
- We at Phantom never have access to your Secret Recovery Phrase
- Phantom team members will never ask you for your Secret Recovery Phrase
- The Secret Recovery Phrase is the only way to recover your wallet
- After saving your wallet password and securing your Secret Recovery Phrase, select “Continue” to proceed
- After successfully setting up your Phantom wallet, you can access it on the top right-hand side of your browser's toolbar
- Don’t see Phantom? Click the icon that looks like a puzzle piece to access a list of your browser’s extensions, where you will find Phantom
- Click on the pin icon next to Phantom to make the wallet visible in your browser's toolbar and easier to find in the future
- To fund your wallet, check out our Apple Pay and Google Pay guide
How to set up Phantom on mobile:
- Follow the installation steps of the Phantom app on your device
- Open the app—you’ll be greeted by the Phantom onboarding screen
- Select “Create New Wallet”
- Enable biometric security and click “Next”. This secures your wallet using fingerprint or facial recognition to ensure you are the only one that can access it. We strongly recommend turning this feature on!
- You will be presented with your “Secret Recovery Phrase” (seed phrase)
- Be sure to store your Secret Recovery Phrase in a safe and secure location!
- Your Secret Recovery Phrase is the MOST important part of your new wallet:
- Whoever has access to your Secret Recovery Phrase will have access to the wallet’s funds
- If you lose your Secret Recovery Phrase, you will lose access to your wallet and its funds
- We at Phantom never have access to your Secret Recovery Phrase
- Phantom team members will never ask you for your Secret Recovery Phrase
- The Secret Recovery Phrase is the only way to recover your wallet
- After saving your wallet password and securing your Secret Recovery Phrase, select “Continue” to proceed
- You can enable notifications to get instant updates about your wallet activity. These can also be customized in the Phantom app via Settings > Notifications
- To fund your wallet, check out our Apple Pay and Google Pay guide
Disclaimer: This guide is strictly for educational purposes only and doesn’t constitute financial or legal advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
