After purchasing a Cryptocurrency like bitcoin or Ethereum through a Cryptocurrency exchange, you can either spend it or save it for the future. You may spend it directly via the exchange, or transfer the digital currency to a secure wallet.
Discussed below is a list of the top 5 cryptocurrency wallets for safekeeping your digital currency. Each of the applications permits the creation of private keys by the users, which can be safely stored by the user, instead of entrusting it to an exchange that is at risk of going bust or getting hacked.
All the cryptocurrency wallets mentioned below are referred to as ‘hot’ wallets. This is because their default state is of being always connected to the internet. People who want to store large numbers of bitcoins or other cryptocurrencies should opt for an offline ‘cold’ wallet for storing them.
- Bitcoin Core
Bitcoin Core wallet works with Mac, Windows, and Linux. It is the first bitcoin client and is ‘full node,’ which indicates that it will download the blockchain’s current version when first run and connect to all other participating computers or nodes. It will later continue downloading and computing information about different transactions of bitcoins.
One of the main benefits of this wallet is that it poses great difficulties in linking a particular payment address of bitcoins to a user’s identity due to the fact that the wallet downloads information about all BTC transactions all over the globe. This also offers protection against varied frauds like double spending or making a user think that the funds have been transferred when it has not actually been transferred. Double spending refers to using the same bitcoin for two different transactions at the same time.
Bitcoin Core wallet is predesigned to pass via the Tor network which makes users anonymous. Thus it becomes extremely hard for others to connect transfers of bitcoins to the user’s home IP address, thereby protecting your privacy. The many functions of Core need huge bandwidths; it is also essential for the wallet to connect to the internet on a daily basis to remain updated with the blockchain network.
When the wallet is run for the first time, a wallet.dat file will be generated. It will have the user’s private keys. Anyone can access these keys by default, but users can use a password and thus encrypt protect the wallet.
Launched in the year 2014, Jaxx wallet can help store bitcoins as well as other cryptocurrencies like Dash, litecoin, bitcoin cash, and ethereum. It does not offer support for Ripple virtual currency, but the team at Jaxx are working towards making their app available for Ripple as well in the near future.
When the Jaxx program is first launched, then users can see a twelve world ‘master seed’ which needs to be written down. This seed can be used for restoration of users’ wallets whenever they lose admission to their original wallet.
The interface of Jaxx is really easy to operate. Users can easily and rapidly switch between different balances in the wallet. Shapeshift support is also inbuilt in this program. It works as an integrated system of currency exchange and permits users to exchange cryptocurrency balances very quickly. For example, users can quickly convert bitcoins to ethereum or litecoins to bitcoins. The new balances will be visible to the user after processing of the exchange has finished.
Jaxx wallet works for Mac, Windows, and Linux as well as a Chrome browser extension. It also has a smartphone app, thereby allowing users to check all their cryptocurrency balances from one gadget.
It may be noted that Jaxx has closed source software. Hence, other coders and developers cannot review the software for presence of any security defects or bugs. In June 2017, a bug was found and it allowed others with access to a user’s computer to dig up the master seed and steal the cryptocurrencies.
Electrum is available for Mac, Windows, and Linux and was launched in 2011. It is one of the most widely used ‘thin’ cryptocurrency wallets because of the fact that it does not download the complete blockchain, but makes a secure connection to other servers to execute payments and validate the balance of bitcoins. The electrum wallet client takes minimal hard drive space and users can set it up within minutes.
A ‘deterministic hierarchical wallet’ is used by electrum, which means that when first run the application randomly creates a ‘seed’ of twelve meaningful words, which then get used for derivation of the keys required for transfer of bitcoins. The seed is visible to the user at the time of creation of the wallet and users need to note it on paper or elsewhere. When this account of electrum wallet is lost, then users can simply reinstall the wallet on another computer and make use of the seed for restoration of their bitcoins.
Users get the option of encrypting the electrum wallet file during the process of setup. This option is unavailable with Bitcoin Core wallet, as stated above. Users also have the choice of opting out of encrypting the wallet during setup. The wallet can also be used in the ‘cold storage’ form for generation of a ‘watch only’ electrum wallet. In this mode, users can check their bitcoin balance and get payments, but cannot spend any of their virtual money. Thus, this mode is ideal for users who are purchasing bitcoins as a prolonged investment option.
Since electrum wallet is a thin client, it is dependent on other servers for data about payments. It is thus more susceptible to some forms of hacking, which is not the case in ‘full node’ wallet clients.
Just like Jaxx, Exodus wallet also allows storing of multiple cryptocurrencies. Users can store different assets and currencies. The easy set up process consists of generation of a twelve word ‘master seed’ which needs to be jotted down for restoration purposes. After the set up process has finished, the wallet will ask users to create a password and secure it.
The digital currencies and assets in Exodus are presented in an easy to understand pie-chart form. The interface can be changed by the user as different kinds of skins are provided. The default currency in the wallet is USD; users can access localization settings and change the default option to local currency if they want to do so. The wallet offers Shapeshift support for exchange of currencies and virtual assets.
This wallet does not have 100 percent open source software. As per company statement, opting for 100 percent open source would mean revealing trade secrets thereby allowing hackers easy access for creation of plagiarized copies of Exodus wallet. Users thus need to trust the company that there are no backdoors or bugs which have been built into the Exodus software.
Rippex is available as a wallet for Ripple cryptocurrency. It works on Mac, Windows, and Linux. It may be noted that Ripple is regarded as one of the top cryptocurrencies in the world and it has a huge market capitalization. It was originally created to smooth banking transactions, but is now also being used for making payments as well as for speculation.
Rippex wallet is quite easy to run and set up. Unlike other widely used cryptocurrencies such as bitcoins, the desktop client has been discontinued by the original makers. The community has however taken it over and continued to run it as Rippex.
In addition to being Ripple’s only desktop client, Rippex program has an easy setup procedure. When it is launched for the first time, the wallet creates a ‘secret key’ which can be written down by users for purposes of restoring it, if and when the need arises. Users are also required to encrypt protect their wallet file with a well-thought out password, thereby making it more difficult for others to steal your virtual money.
Users are charged a fee of 20 Ripples for activating their Rippex account. After the activation is complete, an offline ‘cold’ wallet can be created by users for storing their secret keys in an offline node and thus keeping them safe and secure.
Users who do not want to pay the fee but also want to keep their Ripple currency outside a cryptocurrency exchange can instead go for generation of a paper wallet. Users can visit http://ripplepaperwallet.com for creating the Ripple paper wallet. All the essential code will get loaded onto the web browser by this website. Users need to first disconnect their computer from the internet and then proceed to the process of generating the paper wallet.
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