Stellar Lumens (XLM) is a leading blockchain project that allows money to be moved and stored. It was launched in 2014, with one of the main goals being financial inclusion, especially to those who don’t have access to banking services.
XLM is one of the most popular tokens today, and this guide will explore how you can store your tokens safely. This guide will list some of the best Stellar wallets in 2022. Here you will learn the different types of wallets, the benefits of each, and which wallet to use depending on your overall objective.
Compare The Best Stellar Wallets
Given the choices available, users often find it difficult to select a Stellar wallet. This section will present our selection of Stellar wallets with all their corresponding features and advantages.
Understanding Stellar Wallets
Stellar wallets offer a secure place for your XLM tokens. They come in three forms; software, hardware and paper wallets. Whichever wallet you opt for, you must understand that the coins will not be stored inside the wallet as you would expect of a physical wallet. However, the wallet acts as a gateway that allows you to interact with the coins that never leave the Stellar blockchain. Storing tokens on an exchange is not advisable as it can be hacked and you can lose your assets.
You need to know that Stellar wallets are made up of public and private keys that enable the user to send and receive tokens. When you create a new wallet, you will use the public key to generate a new Stellar address, which you can provide to another person to send you funds. To send your tokens to an exchange wallet, simply input the wallet address associated with the exchange and click on send.
The address can be shared with anyone to receive tokens from them, but the private key should be kept private otherwise, you risk losing your tokens. The private key is vital within a wallet since it is used to access your funds and sign new transactions. Additionally, it helps one recover their public key and address in case you lose your stellar wallet.
Advantages & Disadvantages of Using a Stellar Wallet
How To Choose a Stellar Wallet?
Choosing a Stellar wallet to use will depend on several factors such as security, convenience and accessibility. For example, if you are looking to store your tokens safely for an extended period, then a hardware wallet will make more sense. If you are a trader who needs to use your tokens to trade regularly, then a desktop wallet or web wallet will make more sense. If you need your tokens to conduct regular transactions on the move, then a mobile wallet will be ideal.
Wallets are further subdivided into two more categories depending on their working mechanisms. The subcategories are hot and cold wallets. Hot wallets are ones that are mostly connected to the internet, while cold wallets are those that store your coins offline. Examples of hot wallets include all software wallets, i.e., desktop, web, and mobile, while cold wallets comprise hardware wallets and paper printouts.
Hot wallets, however, come with a drawback. No matter how good security features they provide, their online nature is their greatest folly. The passwords and keys are stored on online servers which are vulnerable to hacks and other forms of data breaches. If your private key or password is compromised, the hacker will have complete access and can siphon off your XLM tokens.
Cold wallets are more secure than hot wallets. The security passwords and private keys are stored within them, negating the need for an online storage solution. A cold wallet holder simply needs to connect it to a computer or a compatible device and access the funds. The physical nature of these devices is a major plus in security. Small and compact, they can be carried or stored safely.
Stellar software wallets come in three forms, web, desktop and mobile. Stellar web wallets allow the user to interact with the Stellar blockchain using a browser interface, but you don’t have to install or download any programs. This is contrary to desktop wallets, which are programs you have to download and install on your pc. They will allow you to keep your private keys and interact with your coins even when offline, which offers a higher degree of security than web wallets. The last type is mobile wallets, which are applications that can be installed on your smartphone. This allows the user to access their XLM tokens on the go.
Stellar hardware wallets resemble USB flash drives. They are easily portable and secure since the owner keeps their private keys and they aren’t connected to the internet. Hardware wallets use a random number generator (RNG) to create public and private keys, usually stored inside the device.
Then there are paper wallets that offer cold storage. A blockchain address and private key are physically printed as QR codes. If you want to send your XLM tokens to a paper wallet, you will scan the QR code. Paper wallets are losing their popularity after the invention of hardware wallets. The keys are set up by the wallet providers randomly, usually requiring the user to go offline and randomly click their mouse on the screen. Three different forms of information are generated and available to the user in a printable form: the public key, private key and a QR code for ease of access to the wallet. Paper wallets are hack-proof, but paper can be lost, stolen or damaged, taking away with it the only way to access your XLM coins.
3 Steps To Using a Stellar Wallet
Step 1: Choose a Stellar Wallet
Users must evaluate a wallet on security and other parameters before selecting the one that suits their needs. Once decided, visit the wallet’s official website and download the correct version of the wallet. Then proceed to install the program on your PC. Once installed, the next step involves creating a wallet.
Step 2: Signing up/Setting up Stellar Wallet
To create a Stellar wallet, you don’t need to provide an email address or phone number. Launch the wallet programme and click on “create a new wallet”. Then proceed to set a strong password to protect your wallet. Also, don’t forget to store your password somewhere safe since if you lose it, you won’t be able to restore it.
Step 3: Start using Stellar Wallet
Use the “Download Backup” to save your backup file. This will help you restore your wallet in the future. To receive funds from your wallet, click on “Add Wallet,” and click on “receive” tab. Share the wallet address with the sender either by scanning the QR code or manually copying the address to the clipboard.
The sole purpose of a cryptocurrency wallet is to protect your valuable tokens. Therefore security has to be the top priority when selecting the best Stellar wallet to serve your needs. As outlined above, different platforms will offer varying degrees of security. Users must compare different wallets based on their features before finalising an option. Also, remember you can hold different types of wallets at the same time and use them conveniently.
Frequently Asked Questions
No. If you do this, then you will lose your tokens. Therefore it’s very important to pay attention to the address you are sending funds to.
Unfortunately, if you lose access to the paper wallet, you will lose access to your crypto assets.
Hardware wallets offer the most security, and even with software wallets, there are a few measures one can take to make them more secure.
Yes. This is even more convenient since you can use the wallets to serve different purposes.
The answer to this question depends on what you are trying to achieve. If it’s storing large amounts of tokens for the long-term, then a hardware wallet will be ideal.
Hot wallets are connected to the internet, while cold wallets store your tokens offline.
By setting a strong password and activating the two-factor authentication (2FA).
No. If you do this, you stand to lose your tokens since the person who has a hold on your private keys has access to your tokens.