An estimated $9 million worth of cryptocurrency is lost every day to hacking, phishing, scams, fraud, and theft. To avoid becoming a part of this statistic, you need to be extremely careful about where and how you store the cryptocurrencies you’re investing in.
Depending on who you ask about cryptocurrency storage, some people may feel as if it is really just a metaphor since Bitcoin (BTC) and other cryptos don’t really contain a physical form.
But don’t let them mislead you. Just like you would store cash, your crypto needs its own wallet for safekeeping.
Last week, we introduced you to cold storage wallets, which keep your digital assets offline in a piece of hardware that can only be accessed through a unique private key.
Hot wallets, on the other hand, are connected to the internet – and perhaps even more popular among investors.
With hot wallets, you have two primary options: non-custodial and custodial.
Non-custodial wallets still connect to DEX’s (decentralized exchanges), where you can buy, sell, or stake your crypto, but you are still in charge of your crypto – not the exchange, as with custodial wallets.
Today, we’re putting three of the most popular non-custodial wallets on the market to the test to help you keep your crypto safe.
Check out the biggest pros and cons of Crypto.com, Coinbase, and MetaMask wallets…
Crypto.com Wallet Pros and Cons
Crypto.com is arguably one of the most recognizable cryptocurrency companies out there right now. The exchange has spent big money on marketing efforts, particularly with sports fans, who will remember its big Super Bowl LVI ad debut featuring a young LeBron James. That came just after Crypto.com secured 20-year naming rights to the former STAPLES Center in downtown Los Angeles where James plays for the Lakers.
- Offers a wide range of features and benefits, including staking, borrowing, lending, and crypto debit cards.
- Security is first-class, with a $750 million insurance fund.
- The user interface is clean and friendly for anyone to use.
- High withdrawal fees.
- Less-than-ideal customer service.
- Crypto assets are limited geographically, and this can hurt crypto options.
- The brand suffered a major hack attack recently, and there was a loss of user funds in early 2022.
Coinbase Wallet Pros and Cons
Most crypto investors use Coinbase in some capacity: It’s based in the United States, which is a huge plus, and offers a convenient, secure interface that’s used by over 89 million folks. Coinbase Wallet is its native cryptocurrency storage wallet and dApp (decentralized application) browser, available for both iOS and Android devices.
What makes Coinbase Wallet extraordinary is the clean, uncomplicated interface, in addition to the fact that it enables the potential to send or receive crypto money to simple usernames referred to as public keys.
- The user-friendly and accessibility that Coinbase Wallet offers is a great alternative to complicated web wallets, helping new crypto users to get readily acquainted with the crypto world.
- Coinbase Wallet provides a free wallet service and charges no fee during or after the registration process. (However, charges are applicable for exchanges.)
- Transaction fees are average.
- Coinbase Wallet ensures users’ digital assets are well-protected.
- Supports most mainstream cryptocurrencies.
- While the Coinbase Wallet supports most mainstream cryptos, you’re still limited in what you can store. This isn’t necessarily a setback for beginners, as the popular currencies are more than enough to start out with. But for users that are interested in investing in the not-so-popular cryptos, this may become an issue.
- Coinbase Wallet requires an internet connection at all times.
- Another drawback that users often encounter is that Coinbase has a much slower support system in comparison to other cryptocurrency platforms, so when a user has issues with their Coinbase Wallet, it may take a while to get professional assistance.
MetaMask Wallet Pros and Cons
MetaMask is a browser-based crypto wallet that is installed as an extension, and having one will no doubt allow you to take advantage of more moneymaking opportunities in crypto. You might need it for things like storing NFTs (non-fungible tokens), buying SingularityNET (AGIX), or staking Fetch.ai (FET), among other things.
- MetaMask is available in the App Store (for iOS users), Google Play (for Android users), and also in supported browsers, including Google Chrome, Firefox, Brave, and Edge. That makes it accessible to most people, no matter the device they’re on.
- The encrypted password required to log in to your wallet, the Secret Backup Seed phrase, is what makes MetaMask very safe to use.
- Another feature is that MetaMask doesn’t control your private key, making it very secure to keep your cryptos on.
- Finally, it is an open-source wallet, which makes it harder to hack, and there are always developers making the latest updates.
- Being an online wallet can be prone to hacks, especially if we’re talking about the browser being hacked. MetaMask does not have access to your information, but unfortunately, the browser you’re using does. This is a serious issue regarding the users’ privacy.
- It can take a while to confirm transactions through MetaMask, which can result in higher fees as well. Slow transactions happen when the network is overcrowded at specific times and usually takes longer to send tokens.
MetaMask recently made headlines for a hack that cost one investor $650,000. The key takeaway here is that you should never divulge your private keys to anyone – ever.
Chief Crypto Strategist Nick Black covered the hack earlier this week and shared some important safety tips for MetaMask users that you can check out in the video below:
How to Protect Yourself Using Hot Wallets
The easiest way for someone to get your personal information is through social engineering, which is a common trick used by scammers. No coding or advanced hacking involved – they just convince you into giving them your information.
Their platform of choice is Discord, a social media site where scammers take advantage of anonymity to convince strangers to share personal information. People will send you DMs with links in Discord all day long, appearing to be your new friend and helping you in every shape or form along your crypto journey. (Check out some of the biggest warning signs right here.)
Upon you clicking one of these links from your new friend, you can kiss your portfolio goodbye. It happens in fractions of a second. That’s why it’s so important to develop a strong sense of discernment – revert back to that childhood saying from mom: don’t talk to strangers.
To keep yourself protected, the best course of action is to do your transactions and get your crypto into cold storage. We share three cold storage wallet options in this guide to help you get started.
Today, we showed you how to protect your crypto – but did you realize that crypto can actually protect YOU against rising inflation? In fact, it could be the only viable way for you to grow your money in this volatile market.
See you soon,
The American Institute for Crypto Investors Research Team
P.S. For more security recommendations, click here to access our comprehensive guide on how to protect your crypto.