Bitcoin, Ethereum, Litecoin and other wallets: what’s the best?

Bitcoin, Ethereum, Litecoin and other wallets: what’s the best?

Changelly works rather simple. You create a transaction and enter the wallet address generated by your wallet application to which we send your exchanged money. To buy Ethereum, Bitcoin, Litecoin or other crypto on Changelly , you should have an appropriate wallet. In this article, we are going to guide you through big variety of cryptocurrency wallets, so that you will know what to choose.

Core wallets (full node)

This is what true decentralization stands for. Core wallets allow you to become a full member of the decentralized blockchain network. These are open-sourced applications you can download from the official coin web page. Once downloaded and installed, the wallet requires blockchain downloaded to your computer. It means that you will need enough space to store the entire blockchain on your drive. It gets hard sometimes, as blockchain may take hundreds gigabytes. Core wallet is an ultimate tool for storage and managing your funds you have full control over. Regardless of one is completely safe, a core wallet is difficult to use. When you send or receive coins, your wallet should be synced with blockchain, in order to reflect the actual balance in its interface. Core wallets are suitable for those who don’t trust any other wallets and prefer their own machines to store all the data. You should remember to make a backup of your wallet and private keys in safe place. In case you miss that, nobody will help you to recover your funds!  

Pros

All the data, including blockchain and private keys, are stored on your computer. You fully control your funds and no one has access to them.

Cons

Requires too much free space on your hard drive. Needs to be synced with blockchain each time you send or receive money.  

Lite (lightweight) wallets

This wallet type is rather popular and makes your cryptocurrency experience smoother. Term ‘Lite’ means that you don’t need to download the whole blockchain to your computer wasting drive space on it. Lite wallets store blockchain on their servers and broadcast all transactions to the network. Some of lite wallets have a built-in exchanger allowing you to switch between currencies. You can use browser versions of ones, as well as you can manage your funds via your smartphone. You still have your private keys or a passphrase stored on your computer. It means that you have full control over your funds. You should store the keys/passphrase in a safe place. Don’t lose it, otherwise you will not be able to get access to your wallet.

Pros

Easy to use, no need to download blockchain, realtime syncing, you have access to your private keys.

Cons

Once private keys are lost, access to the wallet will be denied.

Custodial wallets

All of users, who have ever had a crypto wallet, know about the vital importance of private keys. Once these are lost, all money in the wallet is gone forever. In many cases, private key storage becomes a serious problem, especially if your computer is hacked. Custodial wallets aim to resolve it by controlling your private keys. You don’t have to worry about ones, as you won’t lose them anymore. As well as lite wallets, custodial ones keep blockchain on their servers and sync with it in real time. This is an easy solution for transfer, conversion and managing your coins. You can use it either in your web browser, desktop or your smartphone without downloading additional stuff.

Some consider custodial wallets untrustworthy due to the fact that a user doesn’t fully control his or her wallet. However, large and reliable wallet providers safely store the keys offline and don’t actually have access to your funds.

Pros

Easy to use, no stress caused by private keys storage, no need to download blockchain.

Cons

You don’t control your private keys. Not suitable if you are looking for a wallet that provides you with full control over your funds.

Hardware wallets

Rather than being a wallet to store coins, hardware wallet store your private keys.If you’re afraid of losing your keys, you may assign a hardware wallet (such as TREZOR) to your wallet and store all the private keys there. Hardware wallets keep your keys offline and provide you with the keys anytime you need to make a transaction. You can also backup your private keys to your computer which is quite convenient and safe.

Split transactions

Some of wallets have an option to split (divide) transactions. Say, you are going to exchange 1 BTC on Changelly. You can send this amount partially by dividing it into several smaller transactions. It can be useful when you send large amounts, as smaller parts will be exchanged faster. But if you send the amount less than 1 BTC, we suggest you to send it in one transaction, otherwise there will be a high risk, that the split transactions of small amounts will fail.

Security features

Apart from importing private keys to a computer, there are also several ways of wallet protection being largely implemented in crypto wallets. Each of them causes heated discussion about security. Let’s look at them closer.

Hierarchically deterministic (HD) wallets

Some wallets generate addresses and keys randomly, changing them at regular intervals. This helps improve wallet security, but now so convenient for a user, since there is always need to keeping up to date with backups having wide array of addresses. Rather than generating wallet addresses randomly, hierarchically deterministic wallets generate them in accordance to a certain algorithm based on a so called seed. The seed represents a sequence of random words that are impossible to be guessed. This is a ‘master key’ that helps generate private keys and restore a wallet. HD wallets remain secure, there is no need to backup your wallet after each transaction.

Multisig (multisignature)

This feature requires two or, more typically, three private keys shared between a wallet and user. The crucial advantage of multisig wallets is that even in case a key is lost or stolen, you still can recover your funds.

Some examples

Each wallet type has its unique features. Core wallets is an ultimate solution for those who are looking for true privacy and full control. In turn, some custodial and lite wallets support a wide range of cryptos or tokens and have a built-in exchanger that allows to easily swap between them.

Here is a tiny table of comparison between the most prominent cryptocurrency wallets, so that you will better understand what option suits you best.

Type Name Multi or single currency Protection Changelly integrated Interface
Core Bitcoin core Bitcoin Private keys backup Desktop
Litecoin core Single Litecoin Private keys backup Desktop
Lite Myetherwallet Ethereum and tokens only Recovery key files Web
Gatehub Single (Ripple) Recovery key, 2-step verification Web
Jaxx Multicurrency HD, 12-word security phrase + (upcoming) Desktop, Android, iOS
Coinomi Multicurrency HD, Public cryptography + (upcoming) Desktop, Android
Electrum Bitcoin Multisig, secret phrase Desktop, Android
Nanowallet XEM HD,Password/passphrase + Desktop, iOS, Android
Bitpay Bitcoin HD,2-step verification Desktop, iOS, Android
Custodial Coinbase Multicurrency Mulitisig, cold storage in vault, 2-step verification Web, iOS, Android
Freewallet Multicurrency Cold storage in vault, 2-step verification + Web, iOS, Android
BitGo Multicurrency Multisig, 2-step verification Web, iOS, Android
Coinpayments Multicurrency Multisig, cold storage + Web, iOS, Android
Xapo Bitcoin Multisig, cold storage, 2-step verification Web, iOS, Android

No matter what you choose, Changelly accepts all wallet types. After installing and getting a wallet address, you can exchange cryptocurrency on Changelly in just a few clicks. You can also do it right in the the interface of wallets marked with ‘+’.
Have any questions? We’re always ready to help you out at support@changelly.com

 

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