The cryptocurrency ecosystem has opened up a gateway for new opportunities and products. An essential component to access the ecosystem is a crypto wallet. We explore seven pros and cons of crypto wallets.

Pros of crypto wallets

1. Security

Crypto wallets provide the highest level of security when transacting in the crypto ecosystem. Exchanges are prone to hacks. Centralized institutions and their database have been compromised. Crypto wallet users own private keys to access digital assets.

2. Novel technology

Everyone wants to own the latest Apple iPhone. There is an appeal in owning a piece of novel technology. Novel technology opens doors to new opportunities. Crypto wallets are evolving fast. They come in different forms of hardware, for example, software extensions and mobile apps. Early adopters were able to test public and private critical utilization.

3. Opportunities

Crypto wallets provide opportunities for the latest trends like NFT acquisition, Axie Infinity, and decentralized finance (DeFi) offerings. These opportunities open doors for creators, gamers, and investors. Crypto wallets are the private key to the future.

Cons of crypto wallets

1. Complex

The opportunities in using crypto wallets come with their own set of challenges. The complexity of crypto wallets stands as a key barrier to adoption—even early movers in the crypto space struggle with a prominent wallet provider, MetaMask.

MetaMask allows users to interact with the Ethereum blockchain. Now, it can access the Binance chain. Users must be careful when connecting to the right platform. They must hold adequate gas or Binance tokens to transact. There are times when the funds do not appear on the front-end of the software, despite it being logged in the blockchain.

2. Malicious actors

Novel technology and opportunities attract malicious actors. The underlying technology for crypto wallets provides more security than centralized accounts. However, malicious actors will be designing new ways to scam or hack users.
Ledger is a reputable hardware provider. However, their database was hacked, which resulted in leaked user information, and Ledger users were subjected to an email phishing attack. It is crucial to stay diligent when using crypto wallets in the early phases of adoption.

3. Difficult

There is no other way to say it. Using crypto wallets is hard. You have to make sure you have your seed phrase stored somewhere extremely safe, despite just a piece of paper. Hardware wallets require extra care for the physical device. There are numerous steps involved when confirming transactions. It is necessary to double-check long alphanumeric addresses. There is the underlying worry that you are doing everything correctly. The simple aspect of difficulty deters many from using crypto-wallets.

Self-custody (pro and con?)

The trending word associated with crypto wallets is self-custody. Self-custody is associated as a pro of crypto wallets. Is this entirely true?

If you are technologically savvy and care a lot about privacy and ownership, self-custody of your funds and other digital assets makes sense.

If you are an average consumer who generally gives consent to websites using your data, prefers the convenience of having someone else hold your funds, or uses apps and software without checking the SHA sum, then having self-custody may not be the best option.

The adoption of crypto wallets and the whole ecosystem will remain in this tension between convenience and ownership. We can choose to give up convenience to have true ownership of our digital assets.