Which Crypto Wallet Is Best For You? (+Security Tips)

This video covers the best blockchain/web3 wallet types and best security practices for protecting crypto and NFT assets. I explain the difference between hot wallets like Metamask and cold wallets, also known as hardware wallets, like the Ledger and Trezor. These wallets support Bitcoin, Ethereum, and many other blockchain networks. There are various trade-offs to consider when deciding what wallet to use such as its purpose, what one's experience level is, and how much value they want to secure.

Hot wallets are mostly mobile apps or browser based extensions which is an easy user experience and are free crypto wallets. They are the less secure option relative to others since they work by storing the seed phrase on the device which is often connected to the internet. Hot wallets are the best option as a beginner crypto wallet as they are still secure and can easily be used to store smaller value assets for easy access. Hardware wallets are more secure since they store the private keys, the password for wallets, on the device, separate from an online computer. The best and most popular hardware wallets are the Ledger and the Trezor models. They prevent basically all crypto hacks as long as the seed phrase is stored in a safe place which greatly limits risk of being compromised.

There are also wallet types that allow for better crypto security, easier use, limited responsibility on the owner, or even crypto privacy wallets. Smart contract wallets like Argent and Loopring and better for beginners since they allow for guardian wallets to recover lost access to an account. These smart contract wallets also have integrated smart contract functions so users don’t have to find and figure out the best applications to use since they can use the built-in features on the app. Privacy networks like Monero, ZCash, and Secret Network also have their own wallets which can keep the user's identity anonymous.
Layer 2 privacy solutions like Aztec can also keep wallet transactions private while also providing fast and cheap transactions.

I explain the features of custodial crypto wallets and why they can be a safe option for beginners looking to just have price exposure to the most popular crypto assets without much security risk. These services are regulated and require identification submission, which make them KYC wallets. These are fully centralized meaning records are stored in a database and often don’t allow for transfers to the blockchain. There are degrees to a wallet being custodial. Centralized exchanges like Coinbase act as custodial wallets but allow for transfers to the blockchain for interactions with web3 contracts and apps.

Degen vs vault wallets is a distinction between purposes of wallets for good risk management. For experienced crypto and NFT traders that interact with many unverified contracts, it is a wise security measure to keep high value assets separate from wallets that connect to and sign transactions like minting NFTs and doing other risky contracts from unapproved sources. This is because some contracts are malicious in that they can sneakily have the user approve a transaction that drains assets from wallets by giving themselves permission to transfer all or select tokens. This means vault wallets are best to have as hardware wallets and as an account that does not interact with any contracts aside from simple transfers of assets.