When it comes to cryptocurrency, security is of the utmost importance. If you are going to be investing in digital currencies, then you really should make sure that you are doing so through a wallet that you can trust.
There are a few different kinds of crypto wallets available on the market: Hardware wallets, software wallets, hosted wallets to name a few.
Not all of them offer the same features. In this blog post, we will discuss the features that you should expect from a good unhosted crypto wallet. We will also provide some tips on how to choose a wallet that is right for you!
How do unhosted crypto wallets work and what are their benefits over hosted wallets?
To put it simply, an unhosted cryptocurrency wallet is a digital wallet that can be used to store, send and receive digital currencies by any individual, privately, without signing up for an account anywhere.
The equivalent of unhosted storage in traditional banking would be keeping your money in cash. But unlike traditional finance, crypto is not centralized and therefore unhosted storage does not prevent you from accessing advanced financial services such as lending or investing (at least not technically).
Some of the benefits of using a crypto wallet include:
- More control over your funds: With a traditional bank account, you are at the mercy of the bank’s policies. With an unhosted crypto wallet, you are in control of your own funds.
- Increased security: Crypto wallets are in some ways more secure than traditional banking methods. With a traditional bank account, your money is stored with a third party that speculates with your money. The profit of that speculation makes a large part of the profit of banking institutions. With a crypto wallet, your money is stored in a decentralized location that nobody except you can access unless you give away your private key.
- Privacy: Traditional banking methods do not offer the same level of privacy as crypto wallets. With a traditional bank account, your personal information is stored in a central database along with your transaction history. With a crypto wallet, your transaction history is public but it is extremely difficult to link it to your personally identifiable information.
Of course, there are also some disadvantages to using a crypto wallet. For example,
- They can be difficult to use: Crypto wallets can be difficult to set up and use for people who are not too tech-savvy.
- They are not insured: Unlike traditional bank accounts, crypto wallets are not insured by the government. Some crypto trading platforms have private insurance for customer funds, but unhosted wallets cannot get insured. This means that if you lose your money, there is no guarantee that you will be able to get it back.
What should you look for when choosing a self-hosted crypto wallet?
As you narrow down your choices for a crypto wallet brand, here are key factors to consider:
- Ease of use. The best crypto wallets are user friendly. It should come easy to you to understand how to get started without reading much of the documentation. At the same time, they should provide clear documentation and FAQs in case users need assistance.
- Security features. Good software wallets offer a variety of security features, such as two-factor authentication, biometric login for devices that support it, and hardware wallet support. Supporting basic security measures such as setting up a strong password goes without saying.
- Supported currencies. There are Web3 wallets like MetaMask that let you import any currency on any blockchain network, but not all software wallets work like that. Most wallets have a predefined set of currencies. Make sure that the wallet you choose supports the cryptocurrencies you want to trade in.
- Customer service. In case you have any problems with your wallet, it’s good to know that there is someone you can contact for help. Even software wallets that are available for free should be available for tagging or messaging on Twitter or have their own customer support system.
- Transparency and fees. Some wallets are more transparent than others about the fees they let you pay when you transact. It’s also important to find out if there are pre-set standard transaction fees that you get charged and whether you can customise the fee settings.
What features can you realistically expect from a good crypto wallet in terms of security and user-friendliness?
If you’re looking for a good crypto wallet, you should expect features like security, ease of use, and customer support. Here’s a closer look at each of these features:
Security is important in any wallet, but it’s especially important in a crypto wallet. After all, you’re dealing with sensitive information like your private keys. A good crypto wallet will have features like two-factor authentication and multi-sig support to help keep your funds safe.
Ease of use is another important feature to look for in a crypto wallet. After all, you don’t want to spend hours trying to figure out how to use your wallet. Look for a wallet with a clean interface and easy-to-understand instructions.
Customer support is the last feature to consider when choosing a crypto wallet. After all, you want to be able to get help if you have any problems with your wallet. Look for a wallet that offers 24/seven customer support in case you run into any issues.
Also, you can just take a look at some crypto wallet reviews. For instance, you can easily find an Exodus wallet review, or a Jaxx wallet review online. These can help you get an idea of what other people are saying about different wallets.
In the end, these are some of the features that you should expect from a good crypto wallet. Of course, there are many other wallets out there with different features. It is up to you to decide which one suits your needs the best.
The most important thing is that you find a wallet that you are comfortable using on the daily and that will keep your coins safe.