HomeCryptoTop wallets for Bitcoin and cryptocurrencies

Top wallets for Bitcoin and cryptocurrencies

There is a lot of talk these days about non-custodial wallets for Bitcoin and crypto. 

Indeed, the FTX case, which caused all its users to completely lose possession of the tokens they were storing on the exchange’s wallets, has brought back to the forefront the issue related to the risk of entrusting third parties with the custody of Bitcoin and cryptocurrencies. 

As for fiat currencies, the only way to digitally store them is to entrust them to a third-party custodian, but for cryptocurrencies, there is also the option of self-custody, which is exactly what is done with fiat currency bills. 

Non-custodial wallets for Bitcoin and crypto

In order not to have to entrust third parties with the custody of your Bitcoin and cryptocurrencies, it is possible to use so-called “non-custodial” wallets, in other words, wallets that do not require you to trust others with the custody of your tokens. 

To be precise, these wallets allow the user to have full and exclusive ownership of the private keys of the public addresses on which the tokens are deposited within the blockchain, or of the 12-, 18-, or 24-word seed with which these private keys are generated. 

A wallet is defined as “non-custodial” only when the user exclusively owns all of the private keys, or the seed with which they were generated. 

It is important to point out that whoever owns them can use the tokens at will, so it is most important for those who decide to entrust custody of their cryptocurrencies to a proprietary wallet to make sure that they store and guard the private keys themselves, or the seed, in the most secure way possible. 

The different types of non-custodial wallets for Bitcoin and cryptocurrencies

There are basically three types of non-custodial wallets. 

The most widely used by far is software that can be installed on computers, or apps that can be installed on mobile devices. 

These are precisely programs that do nothing more than custody keys and allow tokens to be sent using the very same private keys. 

Also part of this category is software that allows managing the P2P network nodes on which a cryptocurrency is based, such as the Bitcoin Core software for Bitcoin.

It is worth mentioning that these pieces of software are not primarily used as a wallet to store and send cryptocurrencies but to be able to control the entire blockchain, and thus the validity of all transactions. 

Apps that allow a non-custodial wallet to be installed on mobile devices are by far the most widely used non-custodial wallets, partly because they are extremely convenient to use. However, they do not guarantee a high level of security, so it is not recommended to use them to store large amounts of money. 

The second type, which is the most widely used for storing large sums in crypto, is the so-called hardware wallet. 

It is no coincidence that there has been a veritable explosion of hardware wallet purchases since the closure of FTX. 

These are physical devices consisting of individual USB sticks that store private keys inside them. They are used through software that must be installed on the computer to which they are connected, but which can only operate when they are. 

These are also called “cold wallets” because once they are disconnected from the device used to connect them to the Internet they store the private keys offline, in a way that is absolutely inaccessible to anyone. 

For this reason, however, they are more inconvenient to use. 

The third type is that of so-called paper wallets, which are sheets of paper on which private keys and public addresses are pinned. They can only be used to receive cryptocurrencies, because in order to send them, one must have a software wallet like those belonging to the first type above. 

Paper wallets are also cold wallets, but they must be stored with extreme care because anyone who gets hold of them can in fact get hold of the tokens stored on those public addresses as well. 

Software wallets

One of the most widely used non-custodial software wallets is Trust Wallet. In fact, not only is it software now owned by Binance, but it was the exchange’s own co-founder and CEO, Changpeng CZ Zhao, who promoted its use via Twitter just after the collapse of FTX. 

As far as Bitcoin is concerned, Electrum is also widely used, and lately Wasabi is increasingly used because it natively supports a mixer to obscure the senders of transactions. 

It is worth noting that Electrum also supports Lightning Network transactions. 

However, the latter two wallets support only Bitcoin, while they do not support other cryptocurrencies. 

However, in addition to Trust Wallet, there are many other non-custodial software wallets that also support cryptocurrencies. 

Widely used is My Ether Wallet (MEW), designed specifically for Ethereum. 

Perhaps the most widely used, however, is MetaMask, because it is a browser extension that allows users to connect to many crypto platforms, including, for example, the NFT marketplace OpenSea. 

One wallet that supports several blockchains and NFTs is Eidoo, which originated for Ethereum and Bitcoin, but is now widely used for other networks such as Polygon. 

Hardware wallets

Although there are many different hardware wallets out there, this market is dominated by two industry giants: Ledger and Trezor. 

Trezor was by far the first hardware wallet to come on the market. It has been around since 2013 and is produced by a specialized company from the Czech Republic. 

Precisely because it was the first to hit the market it still manages to maintain an important share of hardware wallet sales. 

The most famous though, is the Ledger. It has been around since 2014 and is produced by a specialized French company. 

It is currently the ruler of this market, so much so that in the last few days it has literally sold out on Amazon due to excess demand over availability. 

The fact is that many users worried that other centralized exchanges might fail, thus taking away the tokens they hold on their wallets, have decided to rely precisely on Ledger to safely store their crypto funds. 

Paper wallets

While in theory paper wallets could in some ways be considered the safest non-custodial wallets, they do, however, present big risks and huge limitations. 

To create a paper wallet there are several online websites that allow generating private key pairs and public addresses, but they are not recommended because the average user cannot verify with certainty that such sites do not store the private keys they generate. 

The safest solution is to download a non-custodial software wallet, launch it to create a wallet, write down the private keys or seed on a piece of paper, and then uninstall the software by removing all its data, including the folder where it was installed. 

Indeed, to be able to use the tokens stored on a paper wallet you still need to use a software wallet, but the high level of security of paper wallets is precisely in not having your own keys online. 

Thus the software wallet can be used only to create the paper wallet, and then possibly to carry out token-sending transactions by reinstalling it, but it needs to be uninstalled, otherwise the high level of security is lost. 

This procedure makes it rather inconvenient to use paper wallets, and it does not completely solve the security problem. 

Indeed, in order to be truly secure, the paper wallet must be kept in a place that is inaccessible to anyone, such as a safe or a safe deposit box. The fact is that anyone who can read the private keys pinned to the paper wallet can potentially use them to steal all the tokens stored on the relevant public addresses. 

Therefore, the use of paper wallets is recommended only for experienced users. 

Marco Cavicchioli
Marco Cavicchioli
Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".
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