Mining digital coins became popular in 2017 during the cryptocurrency hype. Then tens of thousands of people started mining. This activity attracts potentially high, almost passive earnings. The miners place the mined coins in crypto wallets. In 2023, there are hundreds of different vaults. The best mining wallets offer a large number of features for asset management. The most important selection criterion is the level of security of the vaults.
Types of wallets for cryptocurrencies
In 2023, developers offer 2 types of vaults for virtual coins:
- Custodial – store private keys on the developers’ servers.
- Non-castodial – generate access codes for users.
The main difference between such crypto wallets is the degree of reliability. Stores of the second kind are safer than the first.
Custodial
Developers collect information about customers and record it in databases (DB). Services also store private keys to accounts. Users do not have access to the information collected.
Custodial cryptocurrency wallets are distinguished from others by such features:
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- Registration is possible only by e-mail or phone number.
- Most services require identity verification.
- Centralized management.
- Services do not issue mnemonic phrases to restore access.
- A lost password can be reset and a new one created.
Custodial services are insecure because they store information in centralized databases. If attackers hack into the servers, they will get the keys to client crypto wallets and easily steal funds.
Fraudsters can intentionally create custodial vaults to steal customer assets.
Non-castodial
Usually, developers of such cryptocurrency wallets do not collect customer data. Only some services offer users to enable voluntary automatic transfer of software (software) usage information. But such crypto wallets for bitcoin mining do not store private keys. The secret codes are held by the customers.
Non-custodial crypto wallets have these features:
- Anonymous registration.
- There is no mandatory verification. You need to confirm your identity only to withdraw cryptocurrencies in fiat through partner services.
- The program generates a seed phrase to restore access.
The security of non-custodial cryptocurrency wallets is due to the storage of access keys on the client side. If attackers hack into the servers of such platforms, ordinary users will not be affected. Crypto wallets of this type are also created by hackers. However, there are fewer fraudulent vaults among non-custodial solutions.
How to choose a wallet for mining in 2024
With the growth of the cryptocurrency market, new solutions for storing digital assets appear. The table summarizes the main criteria for choosing a wallet.
| Characteristic | Description |
|---|---|
| Key storage | It is better to choose non-custodial wallets. Storing access codes on the clients’ side provides high security of investments. |
| Type | For long-term saving, hardware cryptocurrencies are suitable. To conveniently manage assets, use mobile services for iOS and Android. |
| Safety of investments | Hardware cryptocurrencies are the most reliable.It is also recommended to choose wallets with open source code that have passed the checks of auditing companies. |
| Anonymity | This is an optional criterion. For some users privacy is not important, for others anonymity is the main characteristic. |
| Additional tools | This is also an optional requirement. Auxiliary services increase the convenience of using a cryptocurrency wallet. However, security and anonymity are not affected by this characteristic. |
Top 10 best wallets for mining
In the summer of 2022, the ranking of digital vaults includes:
MetaMask
The cryptocurrency wallet was created in 2016 by ConsenSys. It is an extension for Chrome and some other browsers. In 2023, the developers also offer a mobile version of the vault.
MetaMask supports 37 virtual networks and the same number of coins. Customers can also store tens of thousands of tokens.
MetaMask is considered one of the safest crypto wallets in the digital community. It is a non-custodial, open source service.
MetaMask is an anonymous application. Customers do not need to provide their personal information during the registration process.
| Pros | Pros |
|---|---|
| You can create several wallets in one account | Hackers release phishing extensions |
| There is a mobile version | Does not support BTC |
| Open source code | |
| Responsive technical support | |
| Private keys are held by clients (non-custodial storage) | |
| Anonymity |
Tangem
This is a hardware cryptocurrency wallet. To interact with it, the developers released a program for smartphones and tablets. Tangem is created by Tangem AG, a Swiss corporation.
Customers of the platform can store more than 4 thousand assets. The code of Tangem software is publicly available.
Tangem is an anonymous cryptocurrency vault. Users do not need to undergo verification. Confirmation is only required to purchase assets in the service.
| Pros | Cons |
|---|---|
| Hardware storage | No ability to manage closed cryptocurrencies (done for security) |
| Contactless confirmation of transactions using NFC | Low functionality |
| Low price | No desktop software |
| Security | |
| Anonymity | |
| Openness |
CoinPayments
In 2013, the developers created a browser-based vault. After that, they introduced a mobile app for customers. The developers are the team of Jason Butcher and Alex Alexandrov.
CoinPayments supports 2,300 cryptocurrencies. Customers can operate in 5 blockchains.
The security of CoinPayments is due to the technologies used by the creators of the wallet. The app’s code is open source.
CoinPayments is not an anonymous cryptocurrency software. Verification is provided in the app. It is optional, but it removes limits and expands the functionality of the cryptocurrency wallet.
| Pros | Cons |
|---|---|
| Customers can activate the option of “cold” storage of cryptocurrencies | Verification is required to expand functionality and remove transaction limits |
| Users can automatically exchange cryptocurrencies that come from external addresses | Custodial coin storage: users do not have access to private keys |
| Open source | Medium security due to key storage on developer servers |
ZenGo
This is a mobile cryptocurrency store. There are no other versions. The vault is created by KZen Network.
There are 78 crypto coins and tokens available to users. ZenGo is a custodial cryptocurrency vault. But its privacy level is above average. Customer data is stored but securely hashed. Developers cannot decrypt this information. Also, ZenGo does not provide for verification.
| Advantages | Disadvantages |
|---|---|
| High anonymity due to encryption of collected information | Private keys are kept by developers |
| No verification | |
| Additional ways of earning are available: staking, lending and cryptocurrency deposits | |
| The developer company is regulated | |
| Source code is publicly available |
Coinbase
Coinbase was originally a browser-based cryptocurrency wallet. Later, mobile versions appeared. The program was developed in 2012. The creator of the service is the cryptocorporation Coinbase Global, Inc.
Clients of the service can work only with the Efirium blockchain. But the wallet supports more than 4 thousand cryptoassets.
The reliability of Coinbase is rated above average by the participants of the Etherium network. It is a non-custodial software with a good reputation in the cryptocurrency market. However, the code of the program is closed.
Coinbase developers care about the anonymity of users. Therefore, they provide only optional verification. Without identity verification, there are no restrictions in using the storage. But verification gives access to the Coinbase exchange and the purchase of cryptoassets for fiat currencies.
| Pros | Cons |
|---|---|
| Optional verification without limiting functionality | The source code is closed. |
| Reputation of honest service | No Russian language interface. |
| Private keys are stored by users | Restrictions for users from Ukraine, Russia and Belarus. Clients from these countries can only receive, store and withdraw assets. Other functions are not available to them. |
| High anonymity | |
| There is a built-in browser of decentralized applications (dApps) Ethereum |
KeepKey
The hardware cryptocurrency vault was created in 2015. The developer is KeepKey Corporation from the United States. However, in 2023, the owner of the crypto wallet is ShapeShift.
The hardware wallet supports only the Etherium network. But users can store more than 40 tokens of the ERC-20 standard. If KeepKey is integrated with MyEtherWallet, the list of supported coins will be expanded to 120 tokens.
The anonymous storage does not collect any information about users. Customers can also create new addresses for each crypto transfer.
| Pros | Cons |
|---|---|
| High reliability due to offline storage of assets | No iOS app (there is only an Android app) |
| Ability to integrate with other crypto wallets | Slow tech support |
| Key storage on crypto devices | High price |
| High anonymity | |
| Open code |
Trustee
Convenient wallet of a miner, trader or investor works only in mobile format. There are no other versions of the program. The cryptocurrency wallet was created in 2019 by Trustee Global. The organization is registered in North Carolina (USA).
In the fall of 2022, Trustee supports 31 digital networks and 31 coins. Storage of tens of thousands of tokens is also available to customers. The exact number of assets is unknown.
Trustee is a secure cryptocurrency application. Private keys are held by users. Trustee’s code is open.
The platform is anonymous. You don’t need to register and verify an account to get started. Identity confirmation is only required to buy cryptoassets for national currencies. Trustee does not collect customer data. Also, the program has a function of creating new cryptocurrency addresses for each bitcoin transfer.
| Pros | Cons |
|---|---|
| High level of security | Lack of desktop and browser versions |
| You can work anonymously | There are restrictions for users from the Russian Federation |
| Source code is open | |
| Supports 31 chains | |
| There is a function of selecting profitable cryptocurrency exchangers |
SafePal S1
You can work with the hardware wallet only through the SafePal mobile program. The cryptocurrency wallet was created in 2019 by the eponymous company SafePal. The project was funded by the Binance Labs foundation.
In the fall of 2022, the vault supports 33 networks. More than 30 thousand virtual assets can be placed in the cryptocurrency wallet.
SafePal S1 is one of the safest vaults. The application for working with it has an open source code. Devices are equipped with a self-destruct mechanism when hacking attempts are detected. This is facilitated by integrated security sensors.
Cryptocurrency wallet from the company SafePal is anonymous. You do not need to undergo verification to work with the device. Also, the developers do not store personal information of customers.
| Advantages | Disadvantages |
|---|---|
| Prompt work of technical support | Difficulty in installing new firmware on devices |
| High anonymity | Lack of desktop application |
| There are additional opportunities for earning money: SafePal Earn service and other tools. | Fragility of device bodies |
| Multi-level security system | |
| Support for multiple blockchains | |
| It is possible to create a program cryptocurrency wallet in the application |
Guarda
The service was created in 2017 by Paul Sokolov’s team. At first, the cryptocurrency wallet functioned only in the desktop version. Then the developers released mobile apps for iOS and Android. Guarda also integrates the Simplex payment gateway for fiat settlements.
Guarda allows interaction with more than 50 blockchains, supports over 10 thousand cryptocurrencies. Guarda’s non-custodial wallet is famous for its reliability.
The service supports “cold” storage of assets via Ledger hardware devices. The developers also use data encryption using the Advanced Encryption Standard algorithm.
Guarda is an anonymous cryptocurrency wallet. And although the application has a verification function, it only opens access to the purchase of cryptocurrencies through partner payment services. At the same time, the program does not collect information about users.
| Pros | Minuses |
|---|---|
| High anonymity | High commissions for converting assets |
| Multilevel security system | Interface does not support Russian language |
| There is a built-in exchanger | |
| Private keys are held by users |
ShapeShift
The service has gained fame as a browser-based cryptocurrency vault. In 2023, mobile versions are also available to users. ShapeShift integrates Banxa and GEM services that allow you to buy cryptocurrencies with fiat money.
The program was created in 2016 by the ShapeShift cryptocurrency corporation. The founder of the company is Eric Voorhees.
In 2023, ShapeShift supports 11 blockchains. Users can anonymously store more than 5k crypto assets in the wallet. Verification is only required for purchases via Banxa and GEM. At the same time, ShapeShift does not collect customer data.
| Pros | Cons |
|---|---|
| Investment tools are available to users | No versions for computers and laptops |
| Can be used anonymously, verification is required only for fiat settlements | |
| There is a mobile application | |
| Clients store secret keys on their own | |
| Open source code |
How to create a wallet
Before starting cryptocurrency mining, you need to start a vault. The stages of registration depend on the selected software. For example, you can create a wallet for cryptocurrency mining in the decentralized ecosystem ShapeShift in the following way:
- Select “Launch ShapeShift” on the official website.
- Click on “Connect Wallet.”
- Select ShapeShift from the list of supported wallets.
- Click on “Create a new wallet”.
- Click on “Show words” and write down the seed phrase.
- Click on “Next” and check the correctness of the saved mnemonics.
- Specify the name of the cryptocurrency wallet (optional).
- Think up a password and enter it.
- Click on “Next”.
After creating an account, the ShapeShift interface will automatically open. The cryptocurrency wallet is ready to work.
Usage Guidelines
Wallets allow miners to operate cryptocurrencies. However, the programs and machines do not actually store assets. Cryptocurrency wallets are only graphical interfaces. They allow you to work with blockchain data. For example, transaction information is always recorded in digital chains. Cryptocurrencies, on the other hand, reflect information about transfers. Wallets function on the principle of browsers, which simplify the work with the Internet.
Applications generate 3 strings of cryptographic data for users:
- Private key (address). This is the backbone of the storage. Without private keys, it is not possible to place manually mined coins. Based on the private addresses, the rest of the crypto wallet data is generated.
- Public key. On its basis, the address for crediting coins is generated. Public keys are also needed to verify digital signatures in blockchains.
- Address. This is the identifier of the cryptocurrency wallet in the network. Without addresses, identifying wallets within chains will be difficult. Identifiers are needed to send and receive cryptocurrency transfers.
Possible problems
Miners periodically encounter difficulties. The main ones are listed in the table.
| Problem | Description |
|---|---|
| Loss of access to the storage | This can happen due to the human factor – forgetfulness. In case of loss of registration data, authorization and recovery will be impossible. That’s why it is necessary to write down the password, mnemonics (for non-castodial cryptocurrencies) and other information. |
| Lack of indemnification guarantees | Blockchains have no regulatory bodies. They are decentralized networks. If you send a transfer to a non-existent or someone else’s address, the cryptocurrency will be forfeited. No one will be able to return the digital assets to the previous owner. |
| Fraud or direct theft of mined coins | The cryptocurrency market is almost unregulated. Many countries do not have clear laws on digital assets. Usually, the courts recognize the claims of victims of theft as invalid. Therefore, there are many fraudsters in the cryptocurrency market. |
| Technical vulnerabilities of vaults | The code of many vaults is imperfect. Therefore, crypto wallets can be hacked. |
Frequent user questions
📃 Which wallet to choose for cryptocurrency mining?
It is recommended to look for a non-custodial, open-source storage. Such cryptocurrency wallets are safer than many others. It is worth taking a closer look at MetaMask, TrustWallet, MyEtherWallet.
🔨 Can I store mined cryptocurrency in hardware vaults?
Yes. Such cryptocurrency devices are very reliable, but it is not always inconvenient to use them.
👛 What is a decentralized wallet?
This is how non-custodial vaults that transmit private keys to users are sometimes called.
👀 Why are cryptocurrencies with ancillary services better than others?
Ancillary tools make wallets more convenient. For example, built-in exchangers allow you to convert cryptocurrencies right in your accounts.
😎 Is anonymity mandatory when mining?
No. Data privacy does not affect the performance of cryptocurrency mining. Therefore, anonymity is an optional criterion.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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