As 2022 draws to a close, the story rocking the Cryptoverse are the allegations that Sam Bankman-Fried fraudulently diverted FTX customer funds to his sister-company, alameda Research, where they were subsequently squandered and lost. Billions vanished within a week. Both institutional and retail investors were badly hurt. Some people lost everything. 

“Not your keys, not your crypto” is one of the few crypto maxims that unfortunately continues to ring true. If you have a substantial amount of crypto and are holding all of it with a centralized exchange or custodian, then you’re just not paying attention. Do your future self a favor and self-custody at least a portion of your crypto. You’ll likely find the process liberating and empowering. 

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Today’s article will be looking at the best self-custody wallets for 2023. Specifically, we will examine the following: 

• What are self-custody cold and hot wallets;
• What are the best cold wallets for 2023; and,
• What are the best hot wallets for 2023. 

What are Self-Custody Cold & Hot Wallets 

Before we dive into the wallets, let’s make sure we’re on the same page with the technicals:

• Self-Custody Wallet:  A crypto wallet where the owner has possession over their private keys. So long as only the owner retains their private keys, then only the owner has control over their assets. Here is an in-depth explanation of private keys; but briefly stated, private keys are unique, blockchain issued passwords for newly created crypto wallets. Private keys unlock a wallet for the purpose of sending crypto out of that wallet.
• Hot Wallet:  A crypto hot wallet is one that’s always connected to the internet. Thus, hot wallets take the form of software applications on computers and smartphones. Self-custody hot wallets are generally known to be more convenient, but less secure, than self-custody cold wallets. 
• Cold Wallet:  A crypto cold wallet is one that can be disconnected from the internet and sit offline. Cold wallets take the form of USB or bluetooth devices. The wallets are extremely secure because hackers cannot access them. 

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Best Self-Custody Cold Wallets

Arguably, the two best cold storage crypto wallets are the Ledger Nano X and the Trezor Model T. The Nano X seems to balance high level security with convenience while the Model T maximizes security. 

Ledger Nano X

Ledger’s Nano X is a second-generation cold storage wallet solution. The device itself is sleek and sexy, resembling a USB flash-drive, built with brushed stainless steel and plastic. The device features a small LED screen and lithium-ion battery. The Nano X weighs about 34 grams and is 72 mm x 18.6 mm x 11.75 mm in size. 

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The Nano X connects to computers via a USB cable and to Android or iOS devices via Bluetooth. The device is integrated with Ledger Live, a software platform where users can manage, send, and receive crypto through their cold wallet. Ledger Live also features an exchange that supports more than 5,500 coins. 

During setup, users create a PIN, which allows access into the wallet. A 24-word seed phrase is auto-generated, which acts as the wallet’s private key. The wallet comes with a USB cable, setup guide, recovery sheets, and other items. Ledger ships to all countries and the wallet costs $150. 

Why I Like the Ledger Nano X

The Ledger X offers owners excellent cold storage security while also providing accessibility and convenience. So long as the owner has solid seed phrase hygiene, then they can rest easy knowing their funds are secure. 

The Nano X is famously accessible and convenient. Ledger Live is simple and intuitive, and supports the management and trading of thousands of cryptocurrencies. Ledger Live also has NFT and staking features and support. Users can easily manage their crypto from their mobile devices with Nano’s Bluetooth connectivity. Ledger grants wallet owners access to their library of knowledge-base resources, along with chat and email support. 

Trezor Model T

Trezor’s Model T is also a second generation cold storage wallet solution. The Model T is shaped like a stopwatch, made of hard plastic, and features a large touchscreen. The device weighs 22 grams and is 64 mm x 39 mm x 10 mm in size. It has no battery, as it’s solely dependent on an external power-source. 

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The Model T connects to computers via a USB cable. It has no bluetooth connectivity – more on that in a minute. The device is integrated with Trezor Suite, a software application that runs natively on users’ computers. Like Ledger Live, users can manage, send, receive, and exchange currencies on Trezor Suite. The application supports approximately 1,800 coins. 

Setup is the same as the Nano X. Users create a custom PIN and are then given access to the wallet’s 12 word seed phrase. The wallet comes with USB cable, setup guide, recovery sheets, magnetic dock, and other accessories. The Trezor Model T ships to all countries and costs $200. 

Why I Like the Trezor Model T

When it comes to cold wallet storage solutions, the Model T is the Panzer tank of security. 

The device does not have Bluetooth connectivity, which is a security upgrade as Bluetooth connectivity can be exploited by hackers. Trezor’s software is open-sourced. Thus, the code is available for scrutiny and therefore less likely to contain bugs. The device comes with a microSD card, which allows users to add encrypted storage to their wallet. And Trezor Suite runs natively on users’ desktop computers, which is believed to provide enhanced security over web-based applications. 

Finally, Trezor has been around since 2011. The company’s cold wallet solutions have long been regarded as perhaps the most secure in the industry. 

Best Self-Custody Hot Wallets

Perhaps the two best hot wallets for 2023 are Exodus and Guarda. Exodus values an enhanced user-interface and aesthetic appeal in exchange for a narrowed list of supported cryptocurrencies, while Guarda prioritizes offering a large selection of cryptos and providing Visa debit card integration. 

Exodus

Exodus is a free desktop and mobile crypto wallet. The wallet supports more than 225 cryptocurrencies and is integrated with a built-in exchange, which operates as a DEX. Exodus is Web3 enabled, which allows the wallet to connect to thousands of dApps across multiple blockchains. Exodus supports staking for certain currencies and NFT management. 

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Setup is a breeze. The software is free to download. Once installed, Exodus requires users to set an access password and then guides users on securing their unique seed phrase. The platform has a deep set of education and explanatory videos to help users make the most of the platform. Customer Support engineers are on standby in-case users are having issues. 

Exodus has optional integration with Trezor. With this combination, users can leverage the accessibility of the Exodus with the enhanced security of Trezor. 

Why I Like Exodus 

The user-interface is the most aesthetically pleasing out of any crypto product I’ve ever used. The wallet is smooth, silky, and intuitive. With backgrounds shaded in blues, pinks, and purples, using Exodus makes you feel like you’re banking in Blade Runner 2049. 

Moving crypto in and out is easy and the exchange is convenient. For a hot wallet, Exodus has solid security and the Customer Support engineers are friendly and helpful. 

Guarda

Guarda is a free desktop, mobile, and browser extension wallet. Guarda supports over 400,000  assets across 50 blockchains. Like Exodus, Guarda features an integrated exchange that allows for crypto purchases, swaps, and sells. The platform supports staking for approximately 15 assets but has limited NFT support. 

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Setup is the same as Exodus. After the download and installation, users are required to set an access password, and are then directed to secure their unique seed phrase. Also like Exodus, Guarda features knowledge-base resources and customer support access. 

Guarda features optional integration with Ledger’s cold wallet system. Guarda also offers a prepaid Visa debit card. Users can top it off with their crypto and swipe it anywhere across the globe. Thus, Guada makes crypto super liquid and helps users avoid the hassle of crypto-to-bank transfers. 

Why I Like Guarda

Guarda shines with its large selection of supported crypto assets and staking options. This feature likely appeals to those who might have a more diverse crypto portfolio than what is supported by Exodus. Guarda’s Visa debit card is legit. For individuals who like to hold a majority of their net-worth in crypto, the debit card integration is a must-have and extremely convenient. 

Conclusion 

The Nano X, Model T, Exodus, and Guarda are the premier self-custody cold and hot wallet heavyweights for 2023. You should look into them. 

For those looking to self-custody, here are a few tips to think about:

• Consider using the Ledger Nano X / Guarda or Trezor Model T / Exodus combo. The crypto that you want to hold long-term with maximum security can sit in your cold wallet, while the funds that you might want to liquify or trade within the short to medium term can be held in your hot wallet. 
• Educate yourself on crypto self-custody best practices before getting started. While self-custody protects you from the SBF / Madoff types – if you don’t take the necessary precautions – you can completely screw yourself and lose everything. For both hot and cold wallets, if your seed-phase gets into the wrong hands, it’s game over. For hot wallets, if you lose both your password and seed-phrase, it’s game over. For cold wallets, if you lose both your device and seed phrase, it’s game over.