Digital wallets are a must-have when investing in cryptos because they provide a secure way of storing your coins. You should avoid storing ethereum on your exchange because exchanges can be hacked. The only ethereum you should have on the exchange is the one you are using to trade. With so many wallets to choose from, you would easily get confused on which ethereum wallet to use. However, there are some minimum requirements that a good wallet should have.
Here are 5 essential features to consider when choosing an ethereum wallet:
This is the most important feature in any ethereum wallet. You want to ensure your ethereum is as safe as is practically possible. Hackers are working day and night to steal any ethereum that is not stored securely and the last thing you want is to be a victim of a hack. Check the security features on the wallet to ensure it is secure enough.
Common types include paper, online, software, mobile and hardware wallets. The type to choose largely depends on the reason for storing your ethereum. For instance, if you are looking for a balance between ease of use and security, software wallets would be great. Paper and hardware wallets would be ideal for someone working from a shared computer while online wallets are best for someone using a personal computer.
If you intend to use your ethereum for trading, it might be beneficial to go for a wallet that supports other coins as well. Most ethereum wallets support ERC and ETC but there are many other multi-currency wallets that support lots of other coins and tokens.
The question to ask before settling on an ethereum wallet is, «where will it be stored?» This is a very important security consideration. For instance, paper wallets need to be under lock and key because anyone that accesses it can move your ethereum. The same is true for hardware, mobile and online wallets. If your computer isn’t secure, then an online wallet would be a bad idea.
Most exchanges give you a free wallet but then charge some fee for withdrawing it. If you add this to the gas (a fee charged by ethereum miners for executing a transaction) needed, the overall cost of moving the ethereum could be significantly cheaper on other wallets. It is therefore important to find out if there are any hidden charges associated with your wallet.
Whichever ethereum wallet you pick, it is important to ensure you have access and control to your private key. The thing to recall is, whoever has access to your private key can move your ethereum as they please. This is the main reason why it is not safe to store all your ethereum in your exchange. If you don’t need it for trading, then remove it from your exchange and store it in your wallet.