Safe and sound: top 5 web3 wallets to HODL your digital assets

Web3 wallets are multifunctional crypto wallets where users can not only store cryptocurrency but also work with smart contracts , NFT, interact with the community, and even trade coins. Given the rapid growth of web3, we decided to tell you more about web3 wallets and why they are needed. We also made a list of the best of them. So, let’s start.

What is a web3 wallet?

Wallets are vital to entry into cryptocurrency because they perform several essential functions in the Web3 space, but before we discuss their importance, let’s introduce a definition.

Web3 wallets are digital platforms that provide access to the Internet of the third generation. In such applications, as in classic cryptocurrency wallets, storing cryptocurrency and conducting various operations with coins is possible.

First of all, web3 wallets are essentially digital wallets; thus, they can store digital assets. This includes everything from interchangeable to non-fungible tokens. Secondly, the web3 wallet also opens the door to the world of cryptocurrency, allowing users to interact with dApps (decentralized apps) on various blockchains. In turn, wallets help customers access the vast ecosystem of dApps.

It is also worth mentioning that when creating web3 wallets, there is no need to go through KYC  verification and AML (anti-money laundering) procedures.

A crypto-purse consists of three main components:

• A private key. This is a unique code that allows you to access your digital assets. It is essential to keep this key safe and sound, as it can be used by someone else to access your holdings.
• Public key. This is a unique code that allows others to send you digital assets.
• Seed phrase. This set of 12 words allows you to recover your wallet if you lose your private key. It is essential to keep this phrase safe, as it can be used to access your digital assets if you lose your wallet. 

Why do I need a web3 wallet?

If you are considering getting into crypto, the first step in your journey is to get a web3 wallet which is essential for accessing the web3 space, DeFi, and digital assets. Let’s be more detailed.

• the first option to use a web3 wallet is to have complete control over your crypto assets;
• the second reason you need a web3 wallet is that it is more convenient;
• cryptocurrency wallets allow you to access different blockchain networks;
• as a result, web3 wallets allow users to access decentralized applications simply by storing crypto-assets;
• users can authenticate themselves using their wallets, ensuring they have the necessary means to complete a transaction using digital certificates.

Depending on the ability to connect to the network, there is also a distinction between hot and cold cryptocurrency vaults.

• Hot. These wallets are connected to the Internet and can be used for blockchain transactions. They are generally considered less secure than cold wallets because they are more vulnerable to attack.
• Cold. These wallets are not connected to the Internet and can only be used for transactions once connected to the web. They are generally safer than wallets because they are less vulnerable to attack.  

There are the following types of wallets: 

• Web3 wallets. These wallets can interact with decentralized applications (dApps) and make transactions on the blockchain.
• Software wallets. These wallets are installed on a computer and can be used for blockchain transactions.
• Hardware wallets. These wallets are physical devices that can be used for blockchain transactions. They are generally safer than software wallets because they are harder to hack.
• Paper wallets. These are wallet addresses printed on paper. They are generally safer than software or hardware wallets because they are invulnerable to hacking.
• Desktop wallets. These wallets are installed on a computer and can be used to make transactions in the blockchain.
• Mobile wallets. These wallets are installed on a mobile device and can be used for blockchain transactions.

You can find more information about crypto wallets here. 

Benefits of using web3 wallets

Is it safe to use cryptocurrency wallets?

In cryptocurrency systems, the security and consistency of your account are guaranteed by a network of agents (segmented file transfers or multi-source file transfers) that miners check. They protect the network by maintaining high-speed processing algorithms.

Hacking the existing security in cryptocurrency is mathematically possible, but the cost of achieving it is unacceptably high. For example, an attacker attempting to cheat the BTC blockchain and conduct a “double-spend” would need processing power that exceeds that of all the miners in the system. But even then, he won’t have all the control capabilities. A hacker must cross the 51% power threshold to reach that goal.

To simplify, hacking is possible but difficult. Unfortunately, we have seen increasing numbers of successful hacking attempts. Read more about that by following this link. 

Benefits of using

Web3 wallets provide various control options and greater flexibility in transaction management. The following are some of the benefits of using these wallets. Let’s consider some of them.

User-friendly

Because users have complete control over their assets, web3 wallets are easy to use. Customers can easily manage different holdings because they have direct access to details about each asset. In addition, most web3 wallets are easy to set up, which is a significant advantage for users new to the cryptocurrency space.

The setup process only takes several minutes. Once you create an account, you can start making transactions and easily access new web3 products. It is straightforward to use compared to other traditional digital wallets. 

Privacy and anonymity

Protecting user privacy is one of the best features of web3 wallets. With these wallets, your personal information is safe and protected. As long as you make a transaction to another address, it’s virtually impossible to know the recipient. 

Enhanced security

The security of your funds is another significant benefit you get from using web3 wallets. They ensure the safety and security of your investment during transactions. In addition, your information, identification, and access to your funds are all secure. Most wallets use an encrypted registration/log-in process that requires you to enter your details. This ensures that no hacking will occur, and others will not be able to access your wallets. 

Top 5 web3 wallets 

MetaMask

MetaMask is a hot wallet that lets you store, send and receive Ethereum and ERC-20 tokens. It is a browser extension for Chrome, Firefox, Opera, and Brave. MetaMask allows you to buy ERC-20 tokens directly through the app and gives you control over your private key, making it non-storage-related. 

It’s also open source and can be used with various customizable chains such as Binance Smart Chain and dual-layer technologies such as Polygon. MetaMask allows its users better control over their public and private keys. Finally, it can connect to most decentralized applications thanks to MetaMask’s appeal and extensive developer community.

Because MetaMask is an online wallet, there is a higher risk of hacking than cold wallets because it allows users to conduct online transactions. The browser you use to access MetaMask can collect user information about how often you use the extension, compromising your privacy. In addition, MetaMask only works with Ethereum and other ETH-based cryptocurrencies.

Coinbase Wallet

Coinbase is a centralized exchange that offers a web3 wallet for storing, sending, and receiving different types of tokens. The tokens supported by each wallet will differ depending on the exchange. For example, Coinbase Wallet currently supports: 

• Bitcoin (BTC);
• Ethereum (ETH);
• Bitcoin Cash (BCH);
• Ethereum Classic (ETC);
• Litecoin (LTC);
• 0x (ZRX);
• USDC.

It uses biometric security or PIN code to protect your assets, and its level of protection has been tested.

Coinbase is one of the most popular cryptocurrency exchanges that allow users to buy and sell cryptocurrencies. Coinbase also supports buying and selling through its mobile app. However, Coinbase has been one of the minor private exchanges due to KYC and anti-money laundering requirements.

Exodus

Exodus is a desktop wallet that supports a variety of tokens, including:

• Bitcoin;
• Ethereum;
• Litecoin;
• Dogecoin.

Exodus also allows users to buy, sell and exchange cryptocurrencies from the wallet using cryptocurrency exchange ShapeShift. In addition, Exodus offers a one-click backup solution and 24/7 customer support.

Exodus is a popular wallet because it is easy to use and has a user-friendly interface. However, because it is a hot wallet connected to the Internet, there is always a risk of hacking. Also, Exodus does not support as many cryptocurrencies as some of the other wallets on this list.

Also, Exodus lacks two-factor authentication, which is now required in the business industry, but it does provide a recovery phrase and a built-in backup feature.

Trust Wallet

Trust Wallet is a mobile wallet that supports Ethereum and over 20,000 different Ethereum-based tokens. It is available for Android and iOS devices. Trust Wallet allows users to buy, sell and exchange cryptocurrencies from the wallet using Changelly or Binance exchange. In addition, Trust Wallet offers a one-click backup solution and 24/7 customer support.

Trust Wallet is a popular mobile wallet because it supports various cryptocurrencies and is available for Android and iOS devices. However, Trust Wallet does not have as many features as other wallets on this list. For example, it does not have a built-in exchange or support for multiple languages.

Argent

Argent is an Android app that allows users to interact with decentralized applications without running a full Ethereum node. Argent can also connect to various wallets, including MetaMask, Trezor, and Jaxx. They initially integrate dApps and protocols into their application to provide features such as lending and borrowing directly.

There is no desktop or computer platform for Argent. At the moment, it supports iOS and Android mobile apps. The official explanation reads, “This wallet only supports Ethereum-based apps and tokens,” which is a deal breaker for first-time users.

Which one do you use and why?