I’ve recently been organizing knowledge related to virtual-coin wallets and found that many people are still a bit confused about choosing a wallet. So I’ll share my understanding to hopefully help everyone.

In plain terms, a virtual-coin wallet is a place to store crypto assets. Based on how it works, wallets are divided into two types: cold and hot. Based on device type, they can also be categorized as computer, mobile, online, hardware, and exchange wallets. If you choose the right wallet, you can significantly improve the security of your assets. Most virtual-coin wallets support mainstream coins such as Bitcoin and Ether, so the range of choices is quite broad.

The difference between cold wallets and hot wallets is actually very clear. Because cold wallets can store data offline, they have the highest security level. They are especially suitable for long-term holding of large amounts of assets, but they require purchasing a hardware device. Hot wallets, on the other hand, are online wallets that connect to the internet—you can operate them by downloading an app or client, which makes them more convenient. However, their security is not as good as cold wallets, and they can be affected by the project team.

If I absolutely have to recommend a few mainstream options, Ledger hardware wallets are the top choice for cold wallets. The company is technologically leading in the field of cryptocurrency security, uses a smart card–based design, and provides the highest protection level in the industry. Ledger supports more than 1,000 types of cryptocurrencies, and users can manage their assets through LedgerLive. Currently, there are two models: NanoX and NanoS, priced between $120 and $420. Most importantly, even if the hardware is lost, as long as you properly store a 24-word backup phrase, your assets can be fully recovered.

For hot wallets, Trust Wallet is a good option. It is fully open source and decentralized, supports Chinese, has a simple interface, and offers extremely high security. Users hold their own private keys, giving them 100% control over their assets. It also supports features such as Dapps and staking to earn coins. In addition, other well-known wallets like MetaMask and imToken also each have their own characteristics.

When it comes to the principles for choosing a virtual-coin wallet, I think the most important thing is four points. First, choose products with open-source code that have been tested over time—for example, Ledger and MetaMask, which have been recognized by the market. Second, stay away from wallets where the development team is unclear or where private keys are managed by the developers. Third, check whether the code is open source and whether it can withstand hacker attacks. Fourth, firmly refuse wallets that custody private keys, because that involves risks of theft and misappropriation.

There is one more particularly important point: the mnemonic phrase is a hurdle you can’t get around. No matter which virtual-coin wallet you use, users must keep the mnemonic phrase themselves. If investors want to save effort, they can store their coins on larger trading platforms, which reduces risk somewhat. But if you truly want to hold your coins yourself, I recommend using a hardware wallet to store large assets, keeping the coins for day-to-day transactions in a hot wallet, and using an exchange for coins that you trade frequently.

Finally, to say it plainly: web wallets have the lowest security level and are easy to be attacked by browser plugins, malicious code injection, and phishing links, so you should avoid using them as much as possible. The general security ranking is: web wallets are the lowest, app wallets are medium, and hardware wallets are the highest. Of course, the specific security level also depends on how well the project team maintains and prioritizes security.

When choosing a virtual-coin wallet, you must check the project’s official website to learn about the authenticity of the development company, brand influence, operational status, and reputation. Stay away from teams with unclear information, and also avoid those with obviously exaggerated marketing—especially those promising high interest rates, which are basically scams. Keeping your private keys, backup phrases, and passwords secure is the most basic security awareness.