Ethereum is one of the most popular cryptocurrencies in the crypto world. Just like you store your fiat currency in your bank account, crypto wallets are for storing your cryptocurrency. Each crypto wallet has two keys, i.e. public key and a private key similar to your bank account’s account number and PIN.
If you step foot in the cryptocurrency world, a crypto wallet is a must for making crypto transactions. Ethereum wallet, as you must have understood by now, is a digital wallet in which you keep your Ethereum cryptocurrency. Before diving deep into the Ethereum wallets, let’s look at what crypto-wallets are. Crypto wallets are digital wallets through which you interact with your cryptocurrency. The public key of your crypto wallets are like your bank account numbers that you can share with anyone, and no one can manipulate this information or will be able to steal anything from you. On the other hand, the private key is like the PIN of your bank account, which you must not share with anybody, or there will be risks of stealing or identity theft.
You should always start with hot wallets and then move on to cold wallets. The hot wallets are the software programs, and cold wallets are the hardware. These are hardware devices, and some examples are Trezor and Ledger. The cold wallets are extremely expensive, and for this reason, you should only invest in them when you have enough experience.
The definition of Ethereum Wallet is such that it is a software program through which you can connect to the Ethereum Network and interchange your Ethereum cryptocurrency. Like you use your bank account to make transactions, Ethereum wallets are used to send transactions and record those transactions. The Ethereum wallet will give you access to the Ethereum network through which it will be possible for you to manage your account. But not only this, your Ethereum wallets will keep a record of the current crypto balance, manage all Ethereum addresses to which assets are sent or received, make interaction with decentralized software applications and make small contracts along with many other things.
The address of the Ethereum wallet is like a public strand that consists of numbers and letters. It starts from “0x.” The crypto balance of each Ethereum address is public on Ethereum Blockchain. However, the owner of any particular Ethereum address cannot be visible on the blockchain because the address is in the form of a strand of letters and numbers. That makes it impossible to see that which Ethereum address belongs to whom. To control these Ethereum addresses, wallets are used, and each user can hold as much addresses as he wants.
The private keys or “password” control Ethereum wallets and send or receive the funds in the wallet. As mentioned earlier, the private keys should be kept confidential because they are like pin codes to the bank accounts. Anyone who is familiar with them can have access to your account and your possessions.
There are numerous kinds of Ethereum wallets available in the market. Some are meant for desktop systems, some are meant to keep in your mobile, and some you can keep offline by a bit of titanium, paper, or any other type of hardware.
The Ethereum wallets are discussed below in detail.
Brief Description to Ethereum Wallets
Ethereum is an open-source and decentralized Blockchain, and Ether is the native cryptocurrency of Ethereum Blockchain. There are many types of Ethereum wallets in all sizes and shapes, but the characteristics of each of them are different from others. Some of these wallets will only give the opportunity of Ether transactions between different addresses, and some have smart contract functionality that customers can benefit from. Smart contracts are self-activating coded agreements.
For opening their Ethereum wallet, the customers have to write down or download a seed phrase or private key. Private keys will give customers the opportunity to spend or send their cryptocurrency, and also seed phrase will provide them with access to the private keys kept inside the wallet and complete access to the wallet. The cryptocurrency holders keep all their possessions in the crypto wallet, and private keys and seed phrases are essential for the security of the crypto wallet because they act as the password to the wallet. The seed phrase is also known as the master password, and it is crucial for accessing your crypto assets.
You might wonder about the purpose for storage of private keys inside the wallet because there is also the option of keeping them in another application in their mobile or desktop system. But doing so will put the customers’ funds at risk because if, in any case, the customer’s device gets hacked, then the hacker would have access to private keys, through which he can steal your funds.
The two major kinds of Ethereum accounts are contract accounts and Externally Owned Accounts (EOAs). Externally Owned Accounts consist of a private and public cryptographic set of keys. With the help of private and public keys, the forgeries are prevented because they prove that the person who send the transaction is authentic and actually approved the transaction. That happens because the customers make use of their private keys to control their accounts and funds and make transactions. Private keys are the gateway to the funds of customers, and customers hold the private keys and at the same time, their crypto funds are kept on the Ethereum ledger. The Ethereum ledger keeps record of the identities of customers, records all transactions between customers on the network and ether balance.
In the case of contract accounts, the contract is placed on the Ethereum network. These smart contracts also have Ethereum addresses, and a code manages them.
Although the above two kinds of Ethereum accounts are primarily different, there are four standard features: balance, storage root, codeHash and nonce. A brief description of them is given below.
- Nonce
A nonce is a number that is used for the representation of the total sum of how many times the transactions are send from the address of external account holders. And if we talk about contract accounts, then the nonce represents that how many times the account makes contracts.
- codeHash
The codeHash is the representation of the account’s code on a virtual machine known as, Ethereum virtual machine (EVM). EVM is Ethereum’s computer, and it is a small fragment of that protocol that is responsible for carrying out the transactions. In the case of EOAs, the string of codeHash is an empty text. And if we talk about contract accounts, their code is stored in the form of Hash and saved in codeHash.
- Balance
Each ETH address contains a specific amount of ETH unit of the denomination called Wei, with the reference of one 1e + 18 Wei per one ETH. This whole notation means that 1 ETH is equal to 1 x 1018 Wei.
- StorageRoot
Storageroot is another hash that is the Merkle Patricia tree’s root node. Merkle Patricia’s tree is an initially empty tree, and each node is the representation of Hash of the depository contents of an ETH account.
Types of Ethereum Wallets
Multiple Ethereum wallets are designed for different users and have different characteristics. But the main point is that the customers do not have to depend only on one type of Ethereum wallet; one person can hold control of more than one wallet. Private keys are used to access the wallets, and they can be accessed through desktops, mobile phones, browsers, or paper wallets, based on your preference.
Desktop Wallets
Whether your desktop system has windows, Mac or Linux OS, desktop wallets can run on all types of operating systems. In desktop wallets, the keys are saved locally.
The customers have the option of either using a light client, or they can download the complete Ethereum blockchain. In addition to making Ethereum transactions, desktop wallets give the functionality of creating smart contracts.
Browser Extensions
As the name depicts, decentralized software applications are used to access and save ERC-20 and ETH tokens on desktop browsers. They can hold an almost infinite number of addresses and allow interaction with other blockchains.
The private keys are saved in encrypted form on the browsers. As an extra layer of security, the customers are asked to create a password for accessing their wallets.
Web Wallets
The customers use a web browser to access their accounts. With web wallets, the accounts are stored on a cloud and can be accessed from any location. Also, the customers can have access to the entire Ethereum Blockchain.
Mobile Wallets
To access the Mobile wallets, the customers do not have to download the complete Blockchain because they are light nodes. These are available in mobile applications that can be downloaded from Google Play or Apple App Store.
If you are using mobile wallets, you’ll have to be extra careful about the safety of your mobile because, if you lose your mobile, you’ll lose your Ethereum assets.
Paper Wallets
Storing your funds in the paper wallet means writing down the private keys on a piece of paper and keeping it in a secure place. That piece of writing will have everything you need to control your funds. For this reason, they are not ideal for keeping long term.
Hardware Wallets
These wallets are PIN or password protected. They are also known as cold wallets, and they are used to keep private keys offline. At the time of the transaction of funds, the cold wallets need to be connected to the computer.
How can you Keep your Ethereum Wallet Safe?
At this point, we already know that if we lose our seed phrase or private key, we could permanently lose all our access to our account. And the person who stole our seed phrase or private key can also steal our crypto assets. How you can keep your Ethereum wallet safe is the most essential part of this article, so make no mistakes in keeping your wallet secure from the criminals lurking out there. Following are some precautionary measures that will help you keep your valuable belongings safe and secure.
- You should always store your seed phrase and private keys in a safe place. If you want to save in the written form on a piece of paper, you should keep that piece of paper in the safest place or with other private and important documents. And if you wish to keep them on your mobile, always keep them hidden in the secure folder and if you want to keep them online, you should use any reliable password manager.
- The second point in keeping your seed phrase and private keys is obvious. You should not share them with anyone. Remember that seed phrases and private keys are the keys to your assets, and anyone who has them can have access to your assets.
- If your Ethereum wallet has unique key, any person who can reach your wallet’s password can get to your private keys. For this reason, always select a strong password and activate the functionality of 2FA key.
- Long-term digital assets are those assets you have kept in your wallet for quite some time and are planning not to use them. You should shift your long-term crypto assets from your hot wallet that also has those you frequently move, to another wallet. Keep your long-term crypto assets into cold wallet or hot wallet. Because if you possess large portion of crypto assets in your account and its address is accessible to the public, it will be like you are inviting the scammers.
- When you intend to make any transaction using an email address, website URL, or social media account, carefully check the web address before taking action. Because the hackers will pose as a trustworthy platform for hacking your private keys.
- If you happen to find any unknown asset in your crypto wallet, you should not interact with it and turn off Discard DM’s. These two are the major attack vectors of hackers.
As we know, hackers and scammer are lurking in the dark web in the digital world. They are after every opportunity of stealing your money, personal information or even your identity. Some hackers would go to extra lengths and create opportunities for themselves. Below are some scamming techniques and how to deal with them.
- They will pop up a notification on your screen, pretending to be part of customer support. For example, a notification will appear on your screen “Your Ethereum account has been targeted.” Your seed phrase and private keys will go to the hackers when you click on that notification. You should always confirm the email address, social handle and website URL before clicking on anything. And another critical thing that you should never forget is that no genuine company will ask you to share your private keys and seed phrase.
- The hackers can also pretend to be token drops or fake NFTs. They will send you messages like “We have a free gift for you as a reward for your allegiance to our company,” etc. don’t take any notice of anonymous crypto or NFT in your crypto wallet.
- They will give you suggestions of moving assets into the cold wallet while pretending to be the cold wallet. The notifications like will pop up on the screen. Please do not pay attention to them.
Top Five Ethereum Wallets
Although there are countless options of Ethereum Wallets out there, both hot wallets and cold wallet. Some of them are given below.
Tezer One
That is the earliest hardware wallet. This wallet has a simple interface and highly advanced security measures. The PIN code of the Tezer wallet always stays inside the wallet. If the incorrect PIN is entered, waiting time is increased by the power of two.
Some of the additional features of Tezer One are that it supports multiple types of cryptocurrencies like Bitcoin, DASH etc.
Metamask
The Metamask can be downloaded as an extension of chrome, which means it lowers the entry barriers for beginners.
For using Metamask, the customers don’t need to download the complete Ethereum node, and you’ll be able to control more than one wallet.
Ledger Nano S
That is a hardware wallet in which your keys are stored on a hardware device. Because of the reason that it is an offline wallet, there is no threat of hacking. Ledger Nano S also supports many types of cryptocurrencies like Bitcoin, Litecoin etc.
Exodus
Exodus is both desktop and mobile wallet. It is compatible with MAC, Windows and Linux, etc., and is also available in the form of a mobile application.
Exodus has a customer-friendly interface and built-in exchange. Your data is saved on the hard drive of your desktop system. It also offers more than 100 cryptocurrencies, including Ethereum, Golem etc.
Mist
Mist is created by the developers of Ethereum, making it the official Ethereum wallet. It is a desktop wallet, and for using Mist, the customers have to download the entire Ethereum node. It is integrated with ShapeShift, which means you can buy ETH with regular currency.