By Megha Parvathy | |
Ethereum is the second-largest and most valuable cryptocurrency in the world, despite it being only 6 years since it was launched in 2015. Let’s get our basics right before we dive in.
According to Wikipedia “A digital wallet, also known as e-wallet, is an electronic device, online service, or software program that allows one party to make electronic transactions with another party bartering digital currency units for goods and services.”
Let me simplify it again.some people spend money and hoard gold, as it is precious, and they might resell it when the price is high and might store it and wait for a better price to sell it and make a profit. similarly, instead of gold, we buy virtual coins like Ethereum, bitcoin dogecoin, etc, and money. The wallet facilitates the process.
This rise in popularity leads many investors to buy this Ethereum currency and make a fortune out of it. When you buy a digital currency like Ethereum, you’ll get a private key representing your ownership of it.
To manage these transactions and keys associated with each coin, crypto wallets are used. A wallet is a software application or electronic chip used to store, buy, and manage your cryptocurrencies.
Wallets store details associated with each transaction and keys which can be used to exchange the currencies.
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What is Ethereum?
It’s an open-source Blockchain platform that comes with its cryptocurrency known as Ether(ETH). Ethereum is a blockchain network where users can create, monetize, and use Ether, the cryptocurrency for payment.
This decentralized public ledger was launched by Vitalik Buterin and Joe Lubin in July 2015. They developed Ethereum based on Blockchain technology that makes it difficult or almost impossible to hack, change, or cheat the system.
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What is Ethereum Wallet?
Similar to an internet banking app, the Ethereum wallet is an application that allows you to manage your Ethereum account. Ethereum is the second most popular and valuable cryptocurrency after Bitcoin and is now accepted as a form of payment by various merchants around the world.
The Ethereum account is like an email account with some balance and is used to send funds to other accounts. The wallet allows you to manage your Ethereum account and perform operations like view account balance, do transactions, etc
There are different types of Ethereum Wallets such as hardware wallets, software Ethereum wallets, paper wallets, and web wallets.
How do Ethereum Wallets Work?
Every Ethereum wallet in which you’re holding your coins is a private key that gives you access to the coins. There are two keys here, public and private. The public key is the address you get while transferring money from one account/wallet to another. While the private key proves your identity to the network, meaning it tells that you are the owner of those coins.
The wallets having the private key are password protected, which should be available with you to access the Ether coins. Ethereum keeps a record of the amount of ETH coins associated with every private key on the blockchain. Therefore, as a user, you only have to hold that password-protected key to access your coins.
The secure wallet for Ethereum keeps these keys encrypted which can be decrypted with a password decided by the user. Because there doesn’t any ‘forget password’ feature.
It’s important that you do not forget your password or write it somewhere in a book and keep it safe. You can also take a backup of the private keys and save it on a USB drive, piece of paper, another server, or in another digital ledger.
Top 7 Best Ethereum Wallets of 2021
Below is the best Ethereum wallet list with all the prominent wallets with some unique features used by millions of people around the world:
1. Trezor One
Trezor is the oldest hardware wallet used to store cryptocurrency on a secure electronic chip. The chip can be activated with a unique PIN that protects your private keys from being compromised. It’s one of the best hardware wallets for cryptocurrencies as it keeps them away from the internet.
This single-purpose computer chip will keep your funds safe even if you’ve connected to an infected computer. Trezor supports multiple currencies like Bitcoin, Ethereum, Litecoin, Nash, Dash, etc, and can be connected with other hot wallets for better accessibility.
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Trezor One’s security code system makes it impossible to perform brute-force entering. Whenever you type in an incorrect PIN code, the waiting time for entering a new code increases by the power of two. Also, it generates a random PIN every time you connect it to the system. The new PIN will be displayed after you’ve entered the correct one.
2. Metamask
If you’re new to the crypto-world and don’t know how to buy, sell, and manage Ethereum or other coins, then Metamask will be a great option for you. You can download it both as an application and browser extension and interact with the Ethereum network and other cryptocurrencies.
Here, the private key is stored on your computer, which you extract with the help of a password. Unlike Trezor, Metamask allows you can create your password, in case you forget it or tell someone else.
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If you’re a developer and have Metamask, you can interact with Ethereum test networks and develop blockchain applications. Apart from Ethereum, Metamask can also access other cryptocurrencies, which lowers the barrier for people who wants to buy or do transactions in multiple currencies.
3. Ledger Nano
Ledger Nano is probably the best Ethereum wallet for mining and storing your Ethereum coins. Similar to Trezor, it’s a hardware wallet that allows you to store the private keys of your coins in a physical wallet. On ledger Nano, you can have more than 1000 coins such as Bitcoin, Cardano, Litecoin, Ethereum, Dogecoin, Stellar, Ripple Blockchain, and more.
You don’t need to have some technical knowledge to access and use Ledger Nano. Even a person with little or no experience can access and use other applications on this wallet.
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The main highlight of Ledger Nano is its security. It provides you a recovery sheet which you’d require in case you forget the PIN. And because it’s a hardware wallet, you don’t have to worry about hacking or other issues.
4. Exodus
Exodus is another beginner-friendly crypto wallet that comes with a simple interface and built-in exchange features. Exodus is compatible with multiple operating systems including Windows, macOS, and Linux. Also, you can download its mobile application and check the value of your currencies in real-time.
Exodus allows you to synchronize your Trezor wallet with its interface and use your hardware wallet as software. Also, you can have an additional security option to make sure your keys are safe and secure from external threats.
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On Exodus, you can swap between different cryptocurrencies and also exchange them with regional ones like USD, INR, etc. With Exodus, you can have full control over your data and private keys, which you can export and store a copy on other sources to avoid any data loss.
5. Electrum
Launched in 2011, Electrum is one of the oldest Bitcoin hot wallets, where you can manage your cryptocurrencies and connect with hardware wallets like Ledger, Trezor, and many more.
It’s not the best application for beginners because of its complex options and bare-boned user interface. However, Electrum is famous among medium and advanced users as it excels in primary functions like custom transaction fees.
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Create standard or multi-signature wallets with 2-factor authentication and make them more secure.
6. Coinbase
Coinbase is another hot wallet where users can buy, sell, store, and transfer their digital currencies. It’s an open financial system helping people around the world to convert their local currencies into digital ones and vice-versa
Coinbase makes it easier to buy and sell cryptocurrencies including Bitcoin, Ethereum, Cardano, Dogecoin, and more. It’s a one-stop solution for all crypto wallets as you can link your hardware wallets, exchange different currencies, and do payments from a single interface.
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Take backups for the private and public keys of your cryptocurrencies and keep them secure in case you lose your account or are unable to access the wallet.
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7. Mist
Mist is the official Ethereum wallet created by Ethereum developers, where users can buy Ether or Bitcoins directly through flat currencies. There are several benefits as well as drawbacks of this hot wallet.
It’s available for free in the form of a desktop application, where you can have the entire blockchain of the Ethereum network. However, it only supports ERC20 and ETH tokens and takes a lot of time to load as it syncs with the entire blockchain.
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The only highlight about Mist is that it’s an open-source application and allows you to download the entire Ethereum Blockchain of more than 1TB on your device.
Future of Ethereum
In recent years, Ethereum has become the second most valuable cryptocurrency in the world after Bitcoin Blockchain. From the year it was launched in 2015 to the present day, the price of Ethereum has kept growing from a mere USD1.25 to over USD2500. This means if you’ve bought USD5 worth of Ether coins, it would have been worth more than USD12,500 at present.
It’s predicted that one Ethereum coin will be worth more than USD14,000 by the end of this decade. So, if you’re thinking of buying some Ethereum coins, now is the perfect time to do so. Unlike Bitcoin, For the time being, Ethereum does not have an issuance limit or a clear monetary policy. Ether set a restriction of 18 million per year in its inaugural presale in 2014.
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Conclusion
So in this blog, we got to know about the Ethereum wallet and the bright future of Blockchain Technology. Almost every Ethereum wallet discussed above has some pros and cons. Some of them are hardware-based, while some are hot wallets or software applications.
It depends on your preferences and needs which wallet works best for you. Hot/software wallets provide an easy way to manage various cryptocurrencies from a single application for free. While cold storage/hardware wallets cost some amount of money and accept only a few cryptocurrencies.
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