Crypto wallets, like any digital tool, can be vulnerable to hacks, scams, or user error. The risks are especially high when dealing with hot wallets, which are always connected to the internet.
In the first half of 2024, hackers stole approximately $1.38 billion from crypto wallets, which is more than double the amount stolen in the same period in 2023.
The right wallet offers a balance between convenience and security, but finding that balance can be tricky. In this blog post, we’ve curated a list of the safest crypto wallets, both hot and cold, to help you confidently protect your assets.
Summary
- Cold wallets, like Ledger and Ellipal Titan, provide top-tier security by staying offline and avoiding online threats.
- For frequent transactions, hot wallets with multi-factor authentication (e.g., Coinbase Wallet) offer a secure, user-friendly option.
- Regardless of wallet type, safeguarding your private keys through backups and secure storage is essential to prevent loss of access.
Which Type of Crypto Wallet Is the Safest?
Regarding security, cold wallets are generally considered the safest option. The key reason is their offline nature. Since cold wallets are not connected to the internet, they are immune to common online threats like hacking, phishing, and malware.
Cold wallets typically come in the form of hardware devices or paper wallets, keeping your private keys entirely isolated from the digital world. This makes them ideal for long-term storage of large amounts of cryptocurrency.
Even if a malicious actor wanted to access your cold wallet, they would need physical access to the device or paper, making them extremely secure.
That said, hot wallets—though more vulnerable to online attacks—can also provide robust protection when set up properly. Well-secured hot wallets offer features like two-factor authentication (2FA), encryption, and biometric login options to enhance their safety.
“Hardware Wallets are considered the most secure because they store your private keys offline, making them less vulnerable to hacking.”
Related read: Cold Storage vs. Hot Wallets: Which One Is Safe to Use? - UPay Blog
Top 3 Safest Cold Wallets of 2024
Here are the top three cold wallets of 2024 that offer the best protection for your digital assets:
1. Ledger Crypto Wallet
The Ledger wallet is known for its strong hardware encryption and high-level security protocols, which ensure your private keys are kept safe.
The Ledger Nano S Plus and Ledger Nano X are popular models, both offering secure Bluetooth connectivity (in the Nano X) and integration with numerous crypto platforms.
Why it's safe
- Ledger uses strong hardware encryption
- High-level security protocol
2. Ellipal Titan Crypto Wallet
The Ellipal Titan is renowned for its air-gapped technology, meaning it is completely isolated from any form of online connection, including Wi-Fi, Bluetooth, or USB. It features military-grade security, ensuring that your private keys remain offline at all times.
Why it's safe
- Immune to remote hacking and online malware attacks
- Durable, tamper-proof design adds an extra physical security layer
3. SafePal Crypto Wallet
SafePal offers a multi-layered security system designed to protect your private keys, and like other cold wallets, it is fully offline.
Its user-friendly interface and compatibility with various cryptocurrencies make it a solid option for users seeking both security and accessibility.
Why it's safe
- Affordable cold storage with high-grade security features
- Self-destruct mechanism to prevent access if tampering is detected
Top 5 Safest Hot Wallets of 2024
Hot wallets provide quick and easy access to your cryptocurrency, making them ideal for everyday use. Here are the top five safest hot wallets of 2024, offering strong security features without sacrificing convenience:
1. Coinbase Wallet (Web3)
The Coinbase Wallet offers built-in security layers, including the ability to back up your private keys on cloud storage (optional), and it supports a wide range of cryptocurrencies.
It also integrates seamlessly with Web3, allowing users to interact with decentralized applications (dApps).
Why it's safe
- Extra security layers include two-factor authentication (2FA) and biometric logins
- Option to back up private keys in cloud storage (optional)
- Trusted by millions of users globally
2. MetaMask Crypto Wallet
MetaMask is a decentralized wallet that provides strong encryption and gives users complete control of their private keys. It is widely used in the decentralized finance (DeFi) space and supports multiple blockchains, including Ethereum.
Why it's safe
- Strong encryption to secure private keys
- Offers two-factor authentication and secure seed phrase backups
- Highly regarded in the DeFi space for security and flexibility
3. Crypto.com DeFi Wallet
The Crypto.com DeFi Wallet allows users to fully control their private keys, giving them ownership over their assets.
It integrates with DeFi platforms, making it easy for users to participate in staking, liquidity mining, and other decentralized finance activities.
Why it's safe
- Multi-layer encryption and passphrase protection for added security
- Seamless integration with DeFi platforms for secure decentralized transactions
4. Exodus Crypto Wallet
Exodus is a multi-currency wallet with a user-friendly interface and the ability to integrate with hardware wallets, offering enhanced security for those who want to keep part of their assets offline. It supports a wide range of cryptocurrencies.
Why it's safe
- Supports integration with hardware wallets like Trezor for enhanced security
- Strong security options make it reliable for hot wallet users
- Convenient for managing both online and offline assets
5. Gemini Crypto Wallet
Gemini Wallet is backed by the Gemini exchange, which provides institutional-grade security and insurance coverage for users’ assets.
It is fully regulated, offering additional peace of mind for those concerned about wallet safety.
Why it's safe
- Backed by a regulated exchange with institutional-grade security
- Provides insurance coverage for users’ assets
- Employs multi-layered security protocols to ensure safe transactions
What to Look for in a Secure Crypto Wallet
Here are some of the most important elements to look for in a crypto wallet to consider it safe for use:
Encryption
A secure crypto wallet should use strong encryption methods, such as AES-256 encryption, to safeguard your information. This ensures that even if hackers gain access to your device, they won’t be able to decrypt or steal your private keys.
“AES-256 is considered highly secure and is used by governments and organizations worldwide to protect sensitive information.”
Backup and Recovery
Having a secure backup and recovery option is vital in the event of device loss, theft, or damage. A good crypto wallet should offer features like seed phrase backups or cloud backup options, allowing you to recover your assets if you lose access to your wallet.
According to experts, it’s important to ensure the backup process is simple and secure. They recommend storing your recovery phrase safely, ideally offline, to prevent unauthorised access.
Multi-Factor Authentication (MFA)
Multi-factor authentication (MFA) provides an extra layer of security beyond just a password or PIN. Look for wallets that support two-factor authentication (2FA) or biometric logins such as fingerprint or face recognition.
These additional verification steps help prevent unauthorized access, even if your login credentials are compromised.
Reputation
A wallet from a trustworthy company with a proven track record of security and reliability will greatly reduce the possibility of data breach or theft.
Research the reputation of the wallet provider, checking for any past security breaches, user reviews, and the company’s commitment to ongoing security updates.
Are Crypto Wallets Risky?
While crypto wallets are essential for managing digital assets, they do come with certain risks. The most common risks include hacks, phishing attacks, and lost private keys.
To illustrate these dangers, let’s examine a case study involving a Vietnamese hacker who gained unauthorized access to a crypto exchange wallet.
Case Study: Vietnamese Hacker Gains Access to Exchange Wallet
A recent report to Plasbit details how a Vietnamese hacker exploited vulnerabilities in a service provider to steal crypto assets from exchanges.
In this incident, the hacker infiltrated a user’s crypto exchange account by first compromising their associated email account. Here’s a breakdown of the steps taken by the attacker:
Password Hash Database Acquisition
The hacker initially exploited a security flaw within the email provider (Libero.it, an Italian provider) by purchasing a list of emails and the password hash database on a messaging platform.
Email Server Exploit
The hacker used SQL injection and other vulnerabilities to copy the email provider’s server database offline, bypassing online security limitations like password attempt limits. This allowed the scammer to brute-force the email password without interference.
Email Account Access
Armed with the correct email password, the hacker gained full access to the user's email account. This access opened the door to numerous linked accounts, including the crypto exchange account.
Password Reset Request
Once in control of the email, the hacker requested a password reset for the crypto exchange account, effectively locking the legitimate user out. This process could have been easily interrupted if the wallet had additional layers of security.
Access to Crypto Exchange Wallet
With control over both the email and the exchange account, the hacker reset the exchange password and entered the crypto wallet, changing the linked email address to prevent any recovery attempts.
Transfer of Crypto Assets
The hacker swiftly transferred all crypto assets to their own wallet. Due to the irreversible nature of blockchain transactions, the user’s funds were lost.
Conclusion
In addition to security concerns, the type of wallet you select should align with your specific needs, maybe you prioritise daily transactions' convenience or long-term storage.
Cold wallets are the safest option due to their offline nature, making them virtually immune to online attacks. However, for frequent transactions, hot wallets offer the convenience of quick access while still providing robust security features, like multi-factor authentication and strong encryption.
FAQs
The safest option is typically a cold wallet like Ledger, Ellipal Titan, or SafePal, which is offline and less prone to hacks. Hot wallets can be safe if secured with two-factor authentication and strong backup methods.
Cold wallets are highly secure but not completely foolproof; physical theft, damage, or loss of private keys still pose risks. Proper handling and storage provide near-maximum security.
Your assets remain safe on the blockchain as long as you control your private keys or recovery phrase, allowing access through another wallet provider.
Yes, for better security, move your crypto to a private wallet, especially for large amounts. Personal wallets protect against exchange hacks, with cold wallets ideal for long-term storage.
Use a cold wallet (e.g., Ledger) and secure your recovery phrase. Additional measures, like multi-factor authentication and keeping the wallet in a secure location, enhance protection.
