Different wallets often have different advantages and disadvantages. When deciding which wallet is right for you, it’s important to consider the following:
Long-term investment: Are you holding the majority of your cryptocurrencies as long-term investments? If so, you may prioritise security over quick accessibility to your cryptocurrency in which case you might consider a hardware wallet over a mobile wallet.
Transactional: Do you regularly use your cryptocurrency to pay for goods and services? Those who use their cryptocurrency more regularly might prefer a mobile wallet or a web wallet with a QR scanner. Of note, mobile wallet users will typically still have the bulk of their cryptocurrencies held on a hardware wallet for security.
Trading: If you’re a trader, you will most likely need quick access to your cryptocurrency. Traders might even keep a certain amount of cryptocurrency in their exchange wallet to be able to take advantage of changes in trend or momentum.
Features: The wallet you choose can heavily depend on the features you want. For example, do you want Bluetooth support or extended security features? You might want a wallet with a built-in portfolio manager or greater access to a wider range of cryptocurrencies.
User-friendliness: It is essential you choose a wallet that makes sense to you. You might not want a complicated layout but instead something that’s simple and easy to use. Typically, mobile or web wallets are more user-friendly but are considered less secure. Wallets have come a long way in the past decade, but user-friendliness still has a long way to go. Most wallet interfaces take some time to get used to, but it’s worth learning and testing several to understand what works best for you.
You are placing a lot of faith in the software and/or hardware of a wallet provider to keep your cryptocurrency safe. It is important to do your due diligence by looking at the creator of wallet and their reputation. Consider asking yourself the following questions:
Most wallets are free to download but hardware wallets come with a small price tag. Typically, the more expensive the hardware wallet, the more feature-rich it is and the more cryptocurrencies it supports.
Consider how much a hardware wallet will cost as a % of your entire cryptocurrency holdings. For example, if you have A$1,000 worth of cryptocurrencies to store, a hardware wallet may cost roughly 10% of the value of your portfolio, whereas if you have $10,000 worth of cryptocurrencies, the cost of a hardware wallet may cost roughly 1% of your portfolio. This may be an important consideration depending on your level of investment.
Ultimately, you must assess how valuable secure cryptocurrency storage is.
Do you want to store popular cryptos like bitcoin (BTC) or ether (ETH)? Or are you looking to store a more diverse range of cryptocurrencies? No single wallet is compatible with every cryptocurrency that exists. Some wallets only support one cryptocurrency, while others support thousands.
For cryptocurrencies that are native to non-Ethereum blockchains, you may find that popular hardware wallets do not support them. In these cases, the project behind the cryptocurrency will typically offer its own wallet—or be closely affiliated with another entity which maintains the wallet.