To choose the best Ethereum wallet in Canada, it’s good to learn about how wallets work and what their features are. This way, you can make a smart choice and better protect your assets and account after buying Ethereum.
An Ethereum wallet lets you manage your Ethereum account. A wallet doesn’t actually store your assets. Instead, it’s just a way to send funds, view your balance, connect to applications, and manage what’s yours.
To be clear, here are some definitions:
Common types of Ethereum wallets are:
Let’s talk about each one.
Here you can keep your Ethereum offline. You keep your wallet address offline, which protects it from online attacks (immune from malwares and viruses). It’s a secure way to keep your crypto because your private keys don’t live online.
A physical hardware wallet or a cold storage wallet looks like a USB drive.You can find a quality cold wallet for 200 to 600 CAD. Common features are:
If you plan to invest and keep crypto for years, it’s good to use a hardware wallet. It’s especially the case when you hold a substantial amount of Ethereum. For better security and your peace of mind, keeping it offline will help.
A mobile wallet is a mobile-based application that will store your private keys. It’s an app installed on your mobile device so you can access your Ethereum assets. You can download an app through Android or App Store.
Mobile wallets don’t store the funds. Instead, they just let you access your assets and manage your Ethereum account. Through the wallet you can send and receive some Ethereum and other virtual currencies.
In contrast to physical hardware wallets, mobile wallets require the internet for them to work. Because mobile wallets are internet-powered, they’re viewed as less secure than hardware wallets. As a result, mobile wallets are exposed to online attacks and threats.
Although less secure, mobile wallets make it convenient to buy and sell crypto (easy access anytime, user-friendly, beginners can immediately set it up).
Web wallets also connect online. Using a browser, you can log in to your web-based Ethereum wallet similar to logging in to your email. Because it connects to the internet, a web wallet is said to be less secure than a hardware or cold wallet. The information in web wallets is exposed to online attacks.
To protect your web wallet, it’s good to have multiple authentications for login and transactions. You also have to protect your account information so that only you can access it. Also beware of phishing attacks that attempt to get your login details. It also helps to keep your computer and antivirus and antimalware updated.
You can also use a desktop app to manage your Ethereum account and carry out transactions. You can find compatible desktop apps that support Windows, macOS, and Linux.
To manage your account, you’ll need either a desktop computer, a laptop, or a tablet computer. If you only use your computer at home, there’s less chance of theft and unauthorized access to your Ethereum account and wallet. In contrast, using a mobile app (with an installed mobile wallet) increases the chance of theft and loss (e.g. you might lose your phone in a public place).
Both desktop wallets and mobile wallets can be vulnerable to online attacks. Also, you should always have the computer with you whenever you buy or sell crypto. You also have to regularly update the desktop application and your computer’s antivirus and antimalware.
Keeping it offline will improve security, which is why using a hardware wallet is the most recommended. But for convenience and quick transactions, crypto investors choose other types of wallets (mobile, web, desktop).
If you make regular trades, a mobile wallet is the best option. But if you’ve already accumulated too much Ethereum, it’s now time to move them offline (use a hardware wallet). You can also put most of your Ethereum into a hardware wallet and leave some for your mobile wallet. This way, most of your Ethereum is secure while you still have some to further grow your assets.
When using a mobile, desktop, or web wallet, you should always protect your login information and your device (phone, computer). If you use a hardware wallet, you have to keep it in a secure, safe, and dry place. You should also make sure that the wallet is far or protected from fires, floods, infestation, and other people (they might accidentally cause damage to your wallet or steal it). It’s also good to hide the wallet in a site only you can find (but still easily accessible to you).
Aside from the hardware wallet, you also have to protect your private key. If you lose your private key, most likely you also lose access to your assets. That’s because private keys prove ownership and you need them to sign the transactions.
As long as you take all the reasonable steps to protect your hardware wallet, private keys, login details, devices, and account information, you minimize the risks of losing your assets. It’s especially the case when you’ve already accumulated a substantial amount of Ethereum and other crypto assets. A single incident can wipe out the assets or make you lose access and control over your account.