In increasing order of security, here is a brief introduction to the types of wallets available, our opinion of the level of security, and their ease of use. As a rule, the greater one's investment in cryptos, the further down this list one wants to be.
Usually when you hold cryptos on a centralised exchange such as Coinbase or Binance, you have delegated all responsibility for the security of those funds to the exchange. Though you have a legal claim to your cryptos, you are relying upon the 3rd party to be honest, trustworthy, and secure. A simple rule of thumb is that no more than 5–10% of your crypto assets should be stored this way.
Ease of use: As easy as they come. Security: Depends on which exchange you are using.
The two most popular web-based wallets are MetaMask and Phantom, both of which have the advantage of being able to connect with a hardware wallet. MetaMask was originally conceived for the Ethereum blockchain and now supports many EVM-compatible blockchains. Phantom was originally conceived for Solana.
Ease of use: There is a set-up process which is important to get right for security reasons. Security: The onus is very much on you — safe storage of your seed phrase is critical.
A paper wallet stores your private key offline on a piece of paper. This method is only as secure as the paper itself. Paper wallets used to be very popular but are now considered outdated and risky.
Ease of use: Prone to errors. Security: Highly dependent on physical security of the paper.
The most frequently encountered hardware wallets are manufactured by Ledger and Trezor. Resembling a USB drive, these devices have been specifically designed for handling private and public keys. Your private key NEVER leaves the device and to all intents and purposes it is un-hackable.
There is a 24-word seed which is used to create your private keys. If you lose or break your hardware wallet, you need the 24-word seed to recreate your private keys on a new device.
Ease of use: Very intuitive. Security: Safe storage of your seed phrase is paramount.
The core idea is to engrave your seed phrase onto a metal sheet or rod, making for a far more robust means of storing your seed phrase than paper.
Ease of use: Not that simple for many of the options on offer. Security: That is up to you.
Please feel free to contact us with any questions.