With the price of Ethereum and other cryptocurrencies rising quickly with more and more investors Bitcoin mining, ways to safely store Bitcoins are more important than ever. The same features that people love about cryptocurrencies like decentralization and anonymity can also be the greatest dangers when working with these valuable coins.
Theft, fraud, and mismanagement can all affect your Ethereum savings and leave you with nothing. In 2014, Mt. Gox was the world’s leading Bitcoin exchange and held an estimated 850,000 Bitcoins valued at the time at over $450 million. Thousands of hopeful investors went out and began to buy Bitcoins by the bucketload.
Mt. Gox suddenly closed the exchange and filed for bankruptcy protection as all 850,000 Bitcoins suddenly disappeared from the marketplace. Less than a quarter of the coins have been recovered since.
That story is a worst-case scenario for any cryptocurrency investor looking to buy Bitcoins. However, it was also a valuable lesson for users looking at entering the cryptocurrency market and Bitcoin mining. Now, there are a variety of safe and secure ways to protect your Ethereum as the value continues to climb.
Choosing the best Ether wallet, or Bitcoin wallet, can be a daunting task with many web searches leading to outdated or false information that could put your investment at risk. Luckily, there are several trusted solutions that you can turn to when looking for the best Ether wallet, desktop wallet, or blockchain wallet.
The Ledger Nano S has become one of the most commonly recommended cryptocurrency wallets by its users because of it’s incredible security. Unlike Mt. Gox, Ledger offers an offline, hardware solution. Basically, rather than storing your Ethereum in an online wallet or exchange, you can keep your sensitive information on their convenient hardware wallet.
Because everything is stored on a hardware wallet, your keys and information will never be exposed to anyone—including Ledger themselves. The Ledger Nano S is a USB device with a digital display. In order to access the information within, the device requires a 4-digit pin code which offers an extra layer of security in case your hardware wallet is lost or stolen.
Backup and restoration info is exported to a recovery sheet which can be kept in a safe location in case of hardware failure, loss, or theft. If all of that security wasn’t enough, Ledger also offers two-factor authentication through popular services like Google. With all of this security in place, it’s no surprise that you will often see Ledger Wallet mentioned as one of the top cryptocurrency wallets.
In addition to supporting Ethereum, Ledger Wallet also supports a range of other cryptocurrencies. The only downside to choosing a hardware wallet like the Ledger Nano S is the price. These devices are not cheap but the price is worth it when you want the best security available. Click here to buy a Ledger Nano S wallet.
Another wallet that is often recommended is MyEtherWallet. This is a more simple and cost-effective solution than a Bitcoin hardware wallet. Using their web interface, you can generate a Bitcoin wallet, which can then be saved locally on your own computer.
No information or Ethereum is stored on the MyEtherWallet website. Once you have saved your wallet information on your own computer, you can then use their website to send and receive money as well as perform other transactions. To protect yourself, you should backup your wallet information to an external drive.
Since you are the only one with access to this information you have a lot of security but there is also no failsafe in place for cases like hardware errors and data loss. MyEtherWallet is an effective, affordable solution if you take the necessary steps to secure your wallet information.
Jaxx is a relatively new player in the game but is becoming one of the most highly recommended Ether wallets. Like MyEtherWallet, Jaxx does not access or hold funds. That checks off the number one security box that you should be looking for. Additionally, all of the private keys for your Bitcoin hardware wallet are stored client side.
That means, just like MyEtherWallet, you are responsible for your own information. Backing up your information to external hardware is strongly recommended when using Jaxx. If your hard drive fails and you have not backed up your information then there is no way to recover your private keys and your wallet will be inaccessible.
This is not meant to sound scary. After all, you want to limit access to your private keys to reduce the chances of theft or fraud. This feature of Jaxx is what makes it so popular. As long as you do the right thing and back up your information then Jaxx is a great solution.
Coinbase is mentioned last because it should be one of the lowest options on your list. While Coinbase does offer a lot of convenience that convenience is gained in exchange for security. Coinbase holds onto your private keys which means you won’t lose your access to your Ether if your hard drive should fail.
However, that also means that Coinbase has the ability to shut down your account which has happened to people participating in an alleged illegal activity. In addition, if Coinbase is ever hacked or shut down, your information could be gone in the blink of an eye. Coinbase is a nice way to be introduced to Ethereum, but other, more secure options should be considered if you plan on holding a significant amount of Ethereum. Click here to buy Ether at Coinbase.com.
The main consideration when choosing any Ether wallet is security. Mt. Gox taught a lot of cryptocurrency investors a tough lesson. Luckily, many different companies have stepped up to provide security-minded solutions that can all be considered among the best Ether wallets available.
In addition to reading the above information, take the time to do more research yourself and weigh the pros and cons of each option. Choosing the best Ether wallet for yourself should be given the same consideration and care as choosing a bank or credit card. After all, this is your investment and should be treated as such. With prices rising and Ethereum garnering more interest, your best Ether wallet is a secure Ether wallet.