Best Cryptocurrency Software Wallets of 2022

How to Choose the Best Cryptocurrency Wallet

How frequently do you plan to use your wallet?

How frequently you plan to use your crypto wallet plays an important role in choosing a wallet that’s right for you. For example, if you plan to use cryptocurrency to make regular payments, you probably want to hold some of your funds in a mobile wallet. Conversely, if you are looking to invest in and store crypto assets over the long-term, you are better off securing your digital assets offline in cold storage using either a hardware or paper wallet. 

Are you looking to store large amounts of cryptocurrency?

If you are looking to store a large amount of digital currency, it is advisable to use cold storage solutions, such as a hardware wallet or a paper wallet. 

Do you plan to use the wallet to trade cryptocurrencies on an exchange or purchase goods, or both? 

If you plan to actively trade digital assets, you will probably benefit from a multi-platform wallet that allows you to manage your cryptocurrency portfolio on your desktop and on your smartphone. 

Are you interested in the number of cryptocurrencies that the wallet supports?

If you are looking to construct a diversified portfolio composed of a large number of digital currencies and tokens, choosing a multi-asset wallet that supports thousands of assets is probably the right decision. 

Are you concerned about the usability of the wallet’s interface?          

If you are a beginner, you probably want to go for a beginner-friendly wallet with an easy-to-use interface. 

Do you care about the level of customer support?         

Not all wallet providers have customer support. Numerous long-standing open-source wallets, for example, don’t offer any customer support. If you think you will require help with your wallet, choose one that allows you to interact with a human customer support agent via telephone or live chat. 

How important is it for your software or exchange-based wallet to have hardware wallet compatibility?           

Are you looking to store a substantial amount of money in cryptocurrency? In that case, you should consider using a software wallet that offers compatibility with hardware wallets for cold storage. 

How important is security?

Are you looking to store only a small amount of cryptocurrency to test the waters in the brave new world of crypto? Or are you looking to make a substantial investment? Depending on your plans, security will either play a relatively small or a very big factor in choosing a wallet. 

What levels of security are you looking for? 

Are you content with a desktop wallet on your laptop that you secure with an encryption password or do you want the best security that crypto storage solutions can offer? The answer to this question will play a role in choosing a wallet.  

How important is the company’s reputation? 

Do you trust that a wallet’s open-source code has been sufficiently audited by the crypto community or do you prefer to trust a company with a good reputation? If you prefer to download a wallet from a reputable service provider, that will be another factor to consider before choosing a crypto wallet. 

How important is it to have ownership of your private key?

Are you comfortable with a third-party provider holding your wallet’s private keys (and thus having de facto ownership of your virtual assets)? If not, you can choose a non-custodial wallet where you are responsible for managing your wallet’s private keys. 

While these wallets are considered best practice because you have complete control over your virtual assets, if you lose access to your wallet or forget your encryption password, you will lose all funds held in that wallet. 

How important is it to be able to customize fees?

Do you plan to make a lot of transactions and are concerned about spending too much on blockchain fees? In that case, choosing a wallet with customizable fees is the right move. 

How important are the wallet’s backup features?

Regardless of what wallet you choose, backing up your wallet is one of the most important aspects of crypto wallet management. Are you content with writing down and safely storing a recovery phrase or do you prefer to only have to remember a username and password? 

Choosing a wallet with a backup feature that works for you is another essential ingredient when it comes to picking a crypto wallet. 

Frequently Asked Questions

What is a Cryptocurrency Wallet?

A cryptocurrency wallet is a digital wallet that allows you to store the unique digital codes needed to send and receive crypto assets, such as Bitcoin, Ethereum, and Dogecoin. It’s important to reinforce that these wallets don’t store your actual cryptocurrencies, despite what their name may lead you to believe.

Cryptocurrency wallets are actually more of a ledger, since they hold the keys to the owner’s identity, allowing them access to a blockchain network and transaction history. These wallets must locate the cryptocurrency associated with your address across the blockchain, which is why they must interact with it.

What are the Types of Cryptocurrency Wallets?

Software, hardware, and paper wallets are the three major types of cryptocurrency wallets that fall under the two main categories of wallets known as hot and cold wallets.

Cold wallets have no connection to the internet and come in some physical form, such as a hard drive or a piece of paper, making them the most secure wallets possible. Hot wallets, on the other hand, do have some form of an internet connection, which causes them to be more susceptible to security breaches. 

Hot wallets are favored for their flexibility, such as the ability to access your funds or trade on the go. These software wallets come in the form of web wallets, desktop wallets, and mobile app wallets. It’s important to reinforce, however, that this availability comes as the result of a hot wallet’s web connectivity, which inherently leaves your funds open to some form of vulnerability. 

In the case of cold wallets, the only way for your funds to be lost is if the wallet itself is either lost or stolen and no backup procedures have been put in place. Unfortunately, this superior level of security does not allow for your funds to be readily available for trading or commerce while away from your computer. 

Most leading crypto wallets today are hybrid wallets that offer desktop and mobile access, with the option to connect to a hardware wallet for maximum backup protection. 

How do Cryptocurrency Wallets Work?

Cryptocurrency wallets provide public keys and private keys to enable crypto users to interact with their digital assets stored on public blockchain networks. A wallet’s public key is the wallet address you can receive funds to and the private key is what you use to access your funds to make transactions. 

Think of the public key as your bank account number and the private key as your bank account PIN that you use to log in and make payments. 

Methodology

One of the most important things to consider before you transact in and store cryptocurrencies is that you have a suitable crypto wallet in place. To help determine the wallet that works best for you, we conducted a comprehensive review process of the top cryptocurrency software wallets. 

Our review process is built around a quantitative ratings model that weighs key factors like security, costs, privacy, usability, customer support, and features according to their importance. Our team of researchers gathered over 40 data points and conducted extensive research for each of the 19 companies we reviewed. Our team of writers, who are experts in this field, then test drove each wallet to lend their qualitative point of view.

Our model gave preference to companies with the strongest security measures and reputations. Companies with rich features, such as supporting a large number crypto assets, giving users the ability to sync with hardware wallets, and allowing for fee customization, also ranked highly.