Cryptocurrencies are probably one of the most exciting developments to come along in recent years. Despite being immensely volatile, the high rates of return and excellent liquidity have made cryptos an extremely popular investment in recent times.
Amidst all of this, Bitcoin and Ethereum have emerged as being the two most popular cryptocurrencies in the world in terms of market cap and valuations.
Besides being great investments, cryptocurrencies have changed the way that we think about money and how it works. As they are fully decentralized, cryptos are not issued by any governments or central monetary authority.
Thus meaning that transfers made with cryptocurrencies do not need to make use of existing financial infrastructure. All of this has been made possible thanks to the blockchain – a digital ledger that records all transactions and ownership claims.
This is why cryptocurrencies are instead stored on specialized crypto wallets that fall into two categories – hot and cold wallets.
The most common type of crypto wallets are known as hot wallets. Hot wallets allow their owners to store, send and receive cryptocurrency tokens online.
A lot of the time, new crypto investors make the mistake of assuming that hot wallets store actual cryptocurrency. Crypto wallets actually hold the encryption keys needed to access cryptocurrency stored on the blockchain.
If an owner loses his/her encryption keys, it will be impossible to gain access to the lost cryptocurrency.
Hot wallets are extremely practical as they provide the owner with quick access to his/her cryptos. Some individuals choose to spread their crypto holdings over several hot wallets for several reasons.
One is to reduce the likelihood of falling victim to a cyber attack that could potentially wipe out all stored crypto keys.
Given how valuable cryptocurrencies have become, hot wallets are a favorite target of hackers looking for an easy mark. Due to their nature, it is impossible to determine who is the rightful owner of a specific cryptocurrency – making crypto thieves difficult to track.
To offset this risk, many have taken to making use of another type of crypto wallet known as a cold wallet.
In contrast to hot wallets, cold wallets do not need to be connected to the internet. That’s because they store their contents on a physical medium.
Also known as hardware wallets, cold wallets come in a variety of types – from a simple piece of paper to an external hard drive. Paper wallets are basically a piece of paper with various encryption keys printed on it. While cheap and easily secured, paper wallets can be easily destroyed or stolen.
Because of this, the most common cold wallet used nowadays are small, discreet USB sticks that are easily secured.
As they do not require an internet connection, cold wallets are nearly immune from cyber attacks of any kind. However, when connected to a computer with internet access, there is still the possibility of a hacker gaining access to your keys.
And this is why users prefer to minimize the time in which their cold wallets are connected to their machines. When not in use, cold wallets are oftentimes secured physically – something that helps to reduce the risk of theft.
So if you’re looking to store your crypto holdings, it’s always prudent to invest in a cold wallet.
Let’s now take a look at a selection of the best cold wallets you can use to keep your cryptos safe.
Best Cold Wallets in 2021 for Ethereum and Bitcoin
- Ledger Nano S
A great starter wallet for any crypto enthusiast, the Ledger Nano S is one of the most popular hardware wallets on the market.
The Ledger Nano S supports both Bitcoin, Ethereum, and a whole selection of popular cryptos – making it a great choice if you’re looking to invest in just more than Bitcoin and Ethereum.
Compatible with Windows (7+), Mac (10.8), and Linux, this wallet interfaces with your computer via a USB port.
Besides that, you can also make use of the Ledger Live app to keep track of your assets on your smart device. If you’re concerned about security, you can rely on 2-factor authentication for extra safety.
The only drawback here is that the computer used to interface with your Ledger Nano S needs to be connected to the internet for everything to work properly.
- Trezor One
Created by the team over at SatoshiLabs in the Czech Republic, the Trezor One provides support for Bitcoin, Ethereum, and more than 500 other altcoins.
With it, you’ll get an LED display for easy interface, 2-factor authentication, and PIN protection for wallet access.
The Trezor One is compatible with Windows, Mac, and Linux OSs. All you need is a computer with internet access and a USB port and you’re all set to go.
- Trezor Model T
Another offering from the developers at SatoshiLabs, the Trezor Model T offers users increased levels of protection for their crypto assets while retaining the functionality of the Trezor One.
These new security measures include requiring users to input a PIN code when connecting their devices to a computer. Keying in the wrong passcode will result in users being locked out for a set time period.
As a safeguard, there is a 12-word seed recovery card that allows users to back up their coins should they lose access to their Model T.
- SafePal S1
The SafePal S1 is a sleek, futuristic device that lets you bring your cryptos on the road with you. Equipped with state-of-the-art security sensors and even a self-destruct mechanism, you can rest assured knowing that your cryptos are safe with the SafePal S1.
For easy transfer of coins, there’s the SafePal app that uses a local QR connection – thus eliminating the need to be connected to the internet.
And now you have the facts on the best cold wallets in 2021. If you are still not satisfied with the number of wallets presented, check out Tezro more detailed article on the best Ethereum wallets out there.
No matter what wallet that you choose to go with, just remember that there is no substitute for safety.