Choosing the Best Mobile and Hardware Wallets

Hardware wallets are fast, easy, and cheap to produce. They allow you to keep your private keys separate from the rest of your wallet, but it’s not an ideal solution for storing cryptocurrencies or private keys on a smartphone because these are stored on local storage via a SIM card.

Mobile wallets are more secure than hardware wallets because they don’t require you to be connected to the internet at all times. They can be plugged into a computer and accessed by a mobile browser.

They also require you to have an internet connection, but if that is available then they are much faster than hardware wallets.

This is why I had said before that I would only recommend hardware wallets:

I want people to have a choice between two different types of security: either I trust my smartphone as much as I trust my cash (and I don’t), or I trust my hardware wallet as much as I trust my cash (and I do). Hardware wallets make it easy for me to do one or the other of those things. That makes them better for me, not just for my customers who use them, but for all of us who want some kind of peace of mind when it comes to digital assets.

But then again, this whole “two-partner security” thing may be a distraction from the real business: giving people the option between two different types of security…

So what about buying mobile wallets? Is there any difference between them and hardware wallets? Yes: They may be faster than hardware ones (sometimes). But they aren’t 100% secure — especially if you have another device nearby (like your phone) that can access your wallet at any time — and they may become vulnerable if someone else has access too (or if there is an attack against your wallet provider). This means that while they can still potentially protect your crypto assets better than a hardware wallet, even that isn’t perfect — so you need additional protection when using them in combination with another device (e.g., a laptop). And of course, there are other concerns about mobile and web-based crypto wallets too: What if both websites and apps disappear? What if my apps get hacked and someone steals my data? All these risks exist with any online service today; how safe is yours? How do you know that it is safer than others out there? Does your company have enough money behind it? How will you respond in case something happens? 

How to Pick a Wallet

You have a cryptocurrency wallet, which is a wallet for your digital currency. It is a piece of software you use to store, send and receive digital tokens that are built up from private keys, or cryptographic algorithms and data. How do you pick a good one?

A few weeks ago I wrote an article called “How to pick a wallet” some time ago so I thought it might be useful to update it again with some thoughts on the current state of affairs (and lessons learned along the way).

I am speaking today about:

• Which wallets are safe to use?

• What are the advantages and disadvantages of different types of wallets?

• How to choose between them?

Here’s what I wrote back then:

“After a year in the market, I can say with confidence (though admittedly with some reservation) that there are no “killer” cryptos right now. So let’s just go through some factors that need consideration before we spend our hard-earned money on anyone's wallet:

• Make sure you store your coins/tokens securely so they stay as safe as possible. The best way to do this is to use multi-signature wallets (i.e., accounts with multiple private keys). If you don't have access to backup copies of your private key(s), then you should seriously consider using cold storage, where only you have access to the computer and its operating system — preferably offline. This will allow you to get yourself back into your coin if something happens and make sure that if someone gets into your computer (or otherwise obtains access) they won't be able to gain access remotely by sniffing packets or by running spyware from within your computer system. Don't store coins in random places either! If this is not possible due to cost constraints, consider using 3rd party services such as KeepKey, Trezor, Ledger Nano S, or TREZOR, which offer top-notch privacy protection when keeping coins offline .”

As part of my effort in renaming myself from “Hacker News Writer” (and also because my name change was originally inspired by Hacker News), I am going to update this post every month until March 2018 when I plan on dropping my newsletter completely and focusing entirely on writing only for Hacker News. So please bear with me while I get over all the emotional stuff that has been slowly chipping away at me

Common Threats to Your Crypto and Digital Assets

It is easy for a crypto to be stolen, but it is far harder to protect your cryptocurrency and digital assets.

One of the main reasons for this is the growing complexity of the market — there are too many different kinds of assets to own, too many different types of security, and too much competition. The next challenge will be to power through this and make sure that each asset is owned by an individual or a small group of individuals only.

For many new users, this is a daunting task.

The advantages are obvious: privacy (no more having to give out your private keys), security (you don’t have to trust anyone else with what you own), convenience (you don’t have to store it in a shared safe, or share it with strangers) and an ease-of-use (no matter how you store it, you know that data stays in one place).

The downsides are obvious: redundancy (if someone steals your address they can steal all your assets too), privacy loss and privacy theft (someone could steal all your assets if they simply know your address), complexity (as we’ve mentioned before, there are too many different types of the asset on the market — even if you have selected the right one) and centralization (if someone takes over the network you no longer control what happens in the world around you).

And then there are those who don't understand that even if they understand all these points, they may still not be ready for them.

For example, when I first set up my decentralized wallet on Ethereum Classic I had no idea what properties it had nor how I would use them; once I started using it though I quickly realized that even though I knew how Ethereum Classic works and what its strengths were compared with other platforms such as Bitcoin, I still didn't really understand why my wallet was behaving differently from others on my desktop computer; I couldn't predict exactly what would happen if someone stole my wallet or its funds because everything happened asynchronously within its own implementation. This was due entirely to not understanding how Ethereum Classic actually worked at all. And while this may seem like a relatively minor point of detail compared with some others here, think about it: nobody can ever fully understand what someone else’s code does unless they actually write it themselves. So we need institutional support for software development at every level because nobody has any idea what's going on behind the curtains unless somebody tells them!

Conclusion

If you have an online digital asset that requires you to store it on servers outside of your own, then it is best to keep your cryptocurrency and digital assets inside the country in which you live. This is not a recommendation to store your money in a country with high tax rates or a government that controls the exchange rate or confiscates your savings (although the first two can be helpful).

I’m aware that different governments have different views on this, but I believe it is important to protect yourself from these and similar perceived risks. For example:

● If you live in a country where individual or business taxes are high, it may not make sense to hold assets offshore. On the other hand, if you are paying taxes at a rate that is competitive with other countries, then owning assets offshore makes sense.

● If you think that the exchange rates of currency pairs will change rapidly and dramatically over short periods of time (e.g., gold), then it may not make sense to hold assets offshore. On the other hand, if you are holding real goods for sale on an open market where currencies do not matter much, then owning assets offshore makes sense.

In both cases, there are good arguments for keeping crypto-assets out of tax havens and low-tax jurisdictions. But even here we should be careful about our timing:

● If you want to buy cryptocurrencies because they may represent ownership in private companies or start-ups that will soon become public companies (which seems likely given the recent actions by some lawmakers) then keeping Insure your crypto-assets offshore can help soften any negative effects of those changes sooner than later (i.e., if prices rise quickly after initial token purchase).

● If you want to buy cryptocurrencies because they will represent ownership in holdings held by hedge funds or other institutional investors who might move them around frequently between countries because they’re cash investments and therefore subject to exchange rate fluctuations (which also seems likely), then keeping crypto-assets offshore can help mitigate any negative effects of those changes sooner than later.