How to choose the right wallet?

A few recent years the crypto was booming everywhere: from media to random Reddit threads, people still want to be a part of it just because so many stories of success are out there. But the stories of being scammed by random ICOs and CEO dying without sharing the private keys are told too. But that’s the price you pay for an attempt to become rich, especially with this kind of a new technology having a pretty volatile market and low overall awareness of masses about the blockchain and crypto.

Let’s differentiate wallets first by the online/offline state.

Offline or online wallet?

Offline wallets seem to be useful for long-term storage and claimed to be safe just because you put the private keys on the hardware device like the flash drive and keep it deep in your table drawer. From one point of view it is kind of ‘old school’ and could’ve been used back in the days when people hid their paper money under the mattress: it is safe, but you can’t actually use it if you need it and in crypto world the chances are quite high that you will need to get your coins/tokens just today to exchange, otherwise tomorrow it will be worth nothing.

There are much more options to choose from when it comes to online wallets. You can choose from the installable software for your PC/laptop, there are plenty of web browser-based wallet applications and the last but not least the mobile apps that have been increasing their usage in last few months. Thus, having an application installed on your smartphone gives you an option to check the coins (if you care that much) every time you pull it out and still keep them safe. The thing is developers came up with a bunch of ideas on how to protect one’s funds: 2FA (randomly-generated codes that are changing in a pre-set timeframe and you are the only one who has access to the application that generates them), all kinds of PIN-codes and confirmations of the actions taken via the SMS or Email. Probably, you have the same way to protect your Email so the wallet you’re using has multiple layers of protection so you won’t need to store your money in a paper or hardware wallet.

It’s totally up to you what kind of online wallet to choose, some people like to work with their laptops or spending time in front of the PC, others are more mobile and prefer smartphones: both variants are practically equal, the difference lies only in the service you prefer and the functionality it provides, so do your own research first, before making a decision. Some people tend to keep their coins separated between the applications for more safety or better usability.

Do you actually want to be in control of your private keys?

A holy war goes on for quite a while on this subject. There always will be those who want to keep their private keys and those who don’t feel confident enough to be in full responsibility for their funds. The ability to manage private keys is like a litmus test for the skilled users and those who are not aware of how to use the private keys or the mnemonic phrase.

Another thing, the real people’s stories. If you are a proud Reddit user and you are interested in crypto, then you might already know a lot of them. Some people say, if you do not have private keys for your online wallet, that’s the red flag and you should have never used that service just because it is a scam, which is actually not true. Any wallet relies totally on the number of active users because they are basically their income guarantor. The more coins/tokens people are moving in and out the more money the service is making and being a scam via providing a service that does not allow users to keep their private keys on the phones is nonsense. They are basically trying to keep them under higher level protection: in a scenario when you lose access to the wallet and have the private keys you cannot lose them either or make a mistake while copy-pasting or writing down otherwise you won’t see your funds ever again. But when the service is holding the private keys to your wallet all you need is some proof that you are the actual owner of the account you’re trying to restore access too, that’s all.

Talking about a possibility to import/export your wallet is basically the same thing as making a transaction, the only case it can come in handy when you lose access to the wallet you’re importing and having only a mnemonic phrase or PKs. Anyway, you can still combine both variants or choose the one that fits you better.

Wallet or exchange?

This is a minor issue, but anyway, sometimes people think about what is safer: to keep money in the wallet that you are used to or leave them in the exchange you’re currently using. Well, this depends on how often do you trade, if you are an actual trader that makes money by doing so, then you would keep your coins/tokens on the exchange just to get your hands on them as fast as possible when you see an opportunity and use wallet only in cases of long-term holding.

If you are trading casually, then I think you would prefer using a wallet as a storage for your money just because there are apps that feel more comfortable and easier to use than the exchange. Anyway, the service should be used for what it was originally aimed at: exchanges were made for trading and wallets were made to keep your money safe and sound while you are doing something else.

TIP: whatever people say or do, you will always need to do your own research and often as the time passes you are going to change your mind about the services you were used to and the needs for the future.