How to Choose a Cardano Wallet for Beginners
What is a digital wallet?
A digital wallet allows you to store cryptocurrency e.g. Cardano (ADA) safely and is typically preferred over leaving your cryptocurrency on an exchange. Although extremely rare, exchanges can be compromised, resulting in the loss of it’s users’ cryptocurrencies. There are 2 main types of digital wallets, which are 1) Software wallets and 2) Hardware wallets.
What is a software digital wallet?
A software wallet allows you to store ADA using computer software, which can be accessed through either a desktop app, browser, or mobile app. Here’s a quick comparison between the three.
- Desktop wallet: This type of wallet involves installing the wallet on a desktop or PC. It gives you good control over your wallet and private keys. However, you need to actively manage the application; for example, updating it every now and then and making sure that you have a good back up of the recovery keys. Also to ensure that your funds are secure, you need to make sure that your computer is well protected.
- Online wallet: This type of wallet invoves accessing a wallet through a browser interface or plugin (e.g. chrome, safari, internet explorer) . This gives you the convenience of being able to access your cryptocurrency anywhere, on a desktop, wallet or mobile browser. The main disadvantage of these wallets are that the private keys are also stored online, giving control to a 3rd party and increasing the risk for fraud.
- Mobile wallet: This type of wallet involves acessing your wallet on a mobile application. Some users prefer this method, as you can manage your cryptocurrency on the go and at your fingertips. However, like the online wallet, the private keys are also usually stored online, which makes it more prone to fraud.
What is a hardware digital wallet?
A hardware wallet takes your cryptocurrency endeavors to the next level. In contrast to saving your private keys on your desktop or online, hardware wallets secure your private keys on an offline hardware device. This reduces your risk of your cryptocurrency private keys being stolen.
Hardware wallets are also easy to use and compatible with most software wallet interfaces. All you need to plug in your USB, access your software wallet interface, key in your pin and confirm your transactions.
The 2 most popular hardware wallets right now are the Ledger Nano Wallet and the Trezor Wallet.
If you are deciding to go with a hardware wallet, we always suggest purchasing it from the official website or an authorized reseller, as sometimes these devices could be tampered with. Please refer to the official links below.
Recommended Cardano Wallets
Both Yoroi and Daedalus are great wallets to use.
YOROI: If you prefer the convenience of having an online wallet, giving you access anywhere you go, Yoroi is the go to wallet for that. Another advantage of the Yoroi wallet is you can see a bar graph of rewards for each epoch. On the contrary, Daedalus only shows the total amount of rewards accumualted. One limitation of Yoroi, is that your private keys are saved online; however, pair the Yoroi wallet with a hardware wallet and you have both convenience and full security at your finger tips.
DAEDALUS: If you do not have a hardware wallet, Daedalus provides more security, since you have full control of your private keys on your desktop. However, the limitations are that you must install Daedalus on to a desktop computer, which may be disadvantage if you value convenience. Daedalus also provides the ability to use your ADA to vote in Catalyst Funding Rounds, whereas Yoroi does not have this feature yet.
Ready to buy Cardano?
Once you have set up your cryptocurrency digital wallet you are ready to purchase Cardano. If you would like to know which platforms we recommend to use to buy Cardano. Please click the link below or here.
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