How can you recognize a good wallet?
A wallet is required to receive, save and send cryptocurrencies. This does not save the coins themselves, because they are located on the blockchain of the respective crypto currency at all times. Instead, the cryptographic keys that are required to access the coins are stored in the wallet . Whoever has this key can dispose of the associated coins and transfer them to other users. Therefore, when comparing wallets, particular care should be taken to ensure that the keys are well protected , otherwise the credit could be irretrievably lost.
A wallet is required to use cryptocurrencies
Cryptocurrencies have many advantages over the established fiat currencies, because they are independent of banks or other institutions and are accessible to users even without a bank account. They can be sent quickly and easily and their management is decentralized, which means they are forgery-proof.
In order to be able to use a cryptocurrency to the full extent, a so-called wallet is required. This is like an electronic wallet, which offers the owner several functions:
- Receive crypto money
- Send coins to other participants
- Keep crypto funds
- Check balances
To interact with other wallets, it is not necessary for the sender and recipient of the coins to have a wallet with the same provider. The wallet addresses are universal so that a cryptocurrency can be sent to any participant in the network .
Different types of wallets are offered. Except for hardware wallets, these are usually not associated with any costs. However, there are clear differences in security and anonymity. Ease of use also plays a role, which is why it often makes sense for newcomers without wallet experience to opt for an easy-to-use wallet.
Especially when managing larger amounts, security should play the most important role , which is why experienced users prefer the so-called cold wallets.
IQ Option crypto wallet
In our wallet provider comparison, the broker IQ Option was able to convince
Fees: Most wallets are free
In our wallet test report, we could see that hardly any reputable provider charges fees for an online wallet. This means that users can use the offer to send and receive crypto currencies completely free of charge.
However, the so-called mining fees apply regardless of the selected wallet . These are paid as an incentive for the participants in the network, who provide computing power for finding new blocks and thus for processing the transactions. The amount of the mining fee can be determined by the users themselves. Of course, the larger the amount voluntarily paid, the higher the incentive for the miners to process this transaction quickly. In the case of low mining fees, however, a correspondingly longer waiting time must be expected.
While the management on a hot wallet is completely free , there are costs when purchasing hardware wallets. Besides paper wallets, this variant is one of the safest ways to manage crypto currencies. For the long-term storage of the coins, it is worth purchasing the necessary hardware, especially since this is already available at low prices.
For information about the usability of various storage media, reports from other users who have already gained experience with the corresponding hardware wallet are helpful.
Different cryptocurrencies can usually not be stored on the same wallet. The cryptographic keys of the individual currencies differ, and a separate public key is required for each crypto currency .
When sending cryptocurrencies, you should always ensure that they are sent to the correct wallet. For example, if a user sends Bitcoin to a wallet for Bitcoin Cash , the credit can be irretrievably lost in the worst case.
If you want to use and manage several crypto currencies, you do not necessarily need many wallets, because as our wallet provider comparison has shown, several crypto currencies can now be managed with one provider . Here, too, when sending and receiving cryptographic keys, you must always ensure that the correct wallet address is given for the respective cryptocurrency.
If the crypto currencies are to be used primarily for trading against other crypto currencies, they can also be managed on a crypto exchange or exchange platform . No wallet is required for the digital money stored here in the form of credit, as the user does not have the cryptographic key himself. However, this type of storage is considered comparatively unsafe and should therefore only be used to store credit that is required for trading within a short time.
Manage credit at crypto exchanges or exchange platforms?
If you want to exchange crypto currencies for fiat currencies or other crypto currencies, you will find several suitable platforms for this on the Internet. Some of these work differently:
With many providers, credit must first be paid in, which can then be exchanged directly for the other specified currencies. These are also saved in the form of credit and can be paid out if necessary.
With the express purchase, cryptocurrencies can be purchased directly with the credit card without a prior deposit being required.
In direct trading, the buyer sends the payment to the seller, who in return sends the agreed amount of coins to the wallet specified by the buyer.
Trading with credit stored at the provider has the advantage that transactions can take place directly . This makes it possible to always receive the coins at the currently offered price.
Some users only pay out the stored credit to their own wallet if they need it for other transactions outside the platform. However, this is not recommended by experts, as in the case of credit on a platform, the users themselves do not have the cryptographic keys required to control the coins . They are therefore dependent on the provider and can lose their credit in the event of a hacker attack or through fraud, for example. Splitting a blockchain (hard fork) can also have negative effects under certain circumstances if the cryptographic keys are not checked themselves.
In our wallet provider test, we therefore present good alternatives to long-term storage of cryptocurrencies.
Hot or cold wallet? Safe storage of cryptocurrencies
Cryptocurrencies are stored directly on the blockchain. They can be transferred to other owners using a cryptographic key. Whoever has these keys also controls the associated coins and is in fact the owner of the digital money. Therefore, the cryptographic keys must be well protected and must never be passed on or be publicly visible.
The hot wallets are connected to the Internet. This makes them particularly convenient to use, because cryptocurrencies can be sent with just a few clicks. However, even with the best online wallets from our wallet provider comparison, there is a risk that hackers can gain access to the data and thereby gain possession of the keys. Since transactions with cryptocurrencies cannot be reversed, the coins are permanently lost if the hacker has sent them to his own wallet.
On the other hand, cold wallets, in which the cryptographic keys are stored without a connection to the Internet, are much more secure . The simplest form is the paper wallet. Here the cryptographic key is noted on paper or printed out and can then be entered manually if necessary in order to send the coins. When displaying or printing the key, you should make sure that there is no internet connection at this point in time.
The hardware from our wallet test report offers a more convenient method for cold storage of crypto-coins. The keys are also saved offline here and can be called up if necessary.
Security on your own computer: what users should pay attention to
Regardless of the results in the wallet comparison, there are also various security gaps that users should be aware of and avoid. This includes your own computer. If hackers manage to smuggle in so -called keyloggers or other malware , they can gain access to personal data. When using a hot wallet, it is therefore possible that unauthorized persons can log in and send the stored cryptocurrencies to another wallet. Since transactions cannot be reversed, this means the irrecoverable loss of their credit balance for the original owner. Therefore, only PCs should be used to operate hot wallets that have good virus protection and are free of malware.
With hardware wallets, the keylogger problem is usually circumvented by not entering passwords on the computer keyboard, but directly on the hardware. This usually only has two or three buttons and is thus safely protected.
In addition to offline storage, hardware wallets are also one of the most secure storage options for cryptocurrencies because they only have a small amount of storage space and therefore do not offer the necessary space for harmful software.
The offline management of passwords and recovery phrases should also be done in a safe place. For example, longer phrases can be stored in two or more separate places.
Privacy: which wallet is really anonymous?
Cryptocurrencies offer the advantage that they can be sent and received anonymously, because apart from the cryptographic keys, no data has to be passed on.
However, anonymity also has limits, because since transactions on the blockchain can be completely traced , conclusions can be drawn about the owners under certain circumstances. A new wallet address should therefore be used for each transaction to improve anonymity. A new wallet does not have to be opened every time, because many providers automatically create new public keys for each transaction . This means that newer transactions can no longer be associated with the old ones.
The old public keys were usually still valid in our wallet comparison. This also makes sense and can be important for the user. For example, if a customer wants to send a second payment to someone and simply uses the wallet address they already know, this ensures that this payment actually arrives. Even if the public key is given publicly, as is often the case with fundraising campaigns, for example, it is important that it can be used multiple times.
For anonymity, it was also important in the wallet provider test that the platform operator did not receive any private data from the wallet users . These are well protected, but have the disadvantage that the account can usually not be restored if the access data is lost.
Support: the developers behind the wallet
Regardless of whether it is a hot or cold wallet, it is advantageous for users if a dedicated and active development team is continuously working on the wallet. This can avoid problems and keep the wallet up to date:
- Fast elimination of errors and security gaps
- Adaptation to changes in the individual crypto currencies
- Support the user with questions or problems
- Ensuring fast and smooth transactions
When looking for a suitable wallet, the background of the respective operator should therefore also be taken into account. If it is an established offer, wallet experiences from other customers are also available. These not only concern general usability, but often also show how problems have been addressed and managed in the past .
Regardless of the operator, problems and challenges arise with cryptocurrencies especially in phases in which demand increases sharply. Splitting off the blockchain can also pose a major challenge, which wallet providers deal with differently. It can therefore be worthwhile to take a look at the past when comparing wallet providers. This enables a better assessment of how the individual providers deal with problems and how these are communicated to the users.
Backup and backup: what happens if the data is lost?
Cryptocurrencies are largely sent and received anonymously. Even if this is a frequently mentioned advantage, there are also disadvantages associated with anonymity. For example, transactions cannot be reversed , which can lead to problems in various cases:
The wrong wallet address is entered by mistake.
The amount sent is entered incorrectly.
The user pays for goods that are not delivered or for a service that is not provided.
An unauthorized person has gained access to the wallet and sends the coins to his own wallet.
The problems mentioned should be avoided at all costs, especially with larger amounts. The correct entry of the target address can be ensured by not entering it manually, but by transferring it using copy-and-paste.
Another problem arises when a user loses their login information. As a rule, these cannot be easily restored even by the wallet providers, since they themselves do not have the user’s personal data.
The providers compared in the wallet provider test enable their customers to secure their data in different ways. Especially with hardware wallets, but also with some hot wallets, security phrases can be created through which the account can be restored . Another possibility is to set up a simple security question, which, however, carries a corresponding risk of unauthorized access.
Which digital wallet suits me: The wallet comparison shows it
Although different wallets can be compared with one another based on defined criteria, which wallet is best suited for the individual user, it must always be decided individually. Different people have different requirements and the requirements for a wallet can also differ significantly . While it is important, for example for occasional users without previous experience, that the stored cryptocurrencies can be managed particularly easily, owners of larger amounts place a correspondingly higher value on security and often prefer more complex offline solutions.
We have set ourselves the goal of showing the advantages and disadvantages of each wallet in each individual wallet test report. At the same time, with a good wallet provider test, it should always be taken into account for which users the tested offer is suitable , and when it makes sense to look for other alternatives.
If the individually most suitable wallet is not selected when starting to use cryptocurrencies, this is usually not a problem, because users can easily switch to another provider at any time. However, it should always be ensured that the access data cannot be lost or forgotten, as otherwise there is no longer any possibility of accessing the stored cryptographic keys and thus the coins.
Security should also not be neglected when using a wallet. The PC used should have good virus protection . The private key cannot be managed by unauthorized persons and must not be passed on either online or offline.
Conclusion wallet comparison: A good wallet is characterized by various criteria
Cryptocurrencies can be managed in different ways. Storage without a connection to the Internet has proven to be the safest. So-called cold wallets can be purchased as special hardware , but cryptographic keys can also be securely managed on a simple piece of paper.
The hot wallets harbor a higher risk potential , as it can never be completely ruled out that hackers gain access to the stored data. Thanks to extensive security measures, several services were able to do well here in the wallet provider comparison.
Permanent management of the credit balance at a crypto exchange is not recommended, however, since the users do not have the important cryptographic keys here. However, the platforms are well suited for short-term use. Some exchanges now also offer an integrated wallet. If the users have full control over their private key , these services can often be recommended.
Each user has to decide individually which wallet is best suited for their own needs. Our objective wallet experiences can help to get an overview of the individual providers and to find the most suitable wallet .