Most cryptocurrency exchange platforms will have their own wallets for holding crypto assets traded on them. However, it is not advisable to store crypto on them long-term. Other than being susceptible to hackers, these exchange platforms function just like traditional banks. If you have money in the bank and for whatever reason, the bank goes insolvent, chances are you’ll lose your capital.

In the same way, holding your crypto coins on these exchanges puts you at risk of losing them in case the platform goes offline or pulls a disappearing act. Similarly, using hot wallets to store crypto puts you at risk of hackers. For this reason, if you intend to hodl crypto for your kids, the best option would be to utilize cold wallets.

Types of wallets

There are two types of crypto wallets in existence – cold and hot wallets. Hot wallets are connected to the internet. This has the advantage of making your coins easily accessible for trade on an exchange platform. However, they are susceptible to attacks by hackers who can steal your coins. 

Cold wallets offer far more secure storage, as their private and public keys are stored offline. These wallets allow you to send currencies to them at will, but whenever you need to withdraw or move stored crypto assets, you’ll need to give your physical approval. This could be physically entering your pin or password or biometrics for some wallets.    

Best cold wallets in 2021

Trezor Model T

The Trezor brand is a household name as far as crypto wallets go. This model boasts top-notch security, coupled with a user-friendly touch screen for inputs. You can store Bitcoin, Ethereum, Ripple, Cardano, and 1600 other cryptocurrencies on this wallet. 

The Trezor T model stores its private keys on the device itself. This way, you need to have physical possession of the device to retrieve these keys. With these keys, anyone can access the funds in the device, so the security of the private keys is in your hands. Further, Trezor’s code is open source and has been subjected to rigorous auditing by renowned researchers.

Purchasing this wallet will set you back around $180.  

Trezor One

This was the first cold wallet in production, so it may lack all the new bells and whistles associated with newer wallets. However, it carries the same security system as the Trezor T and the same robust encryption. In fact, you would be forgiven for thinking of it as the cheaper, smaller version of Trezor T.

Trezor One can integrate with hot wallets such as Exodus if you wish to track and monitor your assets on the device. It may not support all current altcoins, but it provides guaranteed protection to your Bitcoin and more than 1,600 other crypto coins, all for the throwaway price of $60.  

Coinkite Coldcard

This is the most secure hardware wallet in circulation. It features a numeric keypad for inputs and a bright OLED display screen. By design, it can function without being connected to a computer. This means you can store your coins, sign transactions and generate your private keys with no threat of malicious attack.

Additional security features include a security chip that prevents anyone who might have your physical wallet from generating your seed phrase. It also uses pin code security to prevent unauthorized access. It also offers an optional brick me pin. This allows you to enter a false pin when under duress that blocks the device, so that anyone threatening you cannot gain access.

KeepKey

KeepKey is a hardware wallet best known for its large display, which enhances ease of use. It stores public and private keys offline, and offers a 12-word seed phrase for recovering your funds in case you lose your wallet. This seed phrase can be increased to 24 words if you so prefer.

KeepKey is compatible with the ShapeShift exchange platform, which enables you to exchange any coins on the device at will on the said platform. The code behind the device is open source and can be verified on GitHub. Access to the wallet utilizes pin code security. 

Billfodl steel wallet

In most cold wallets, generating the seed phrase is the only way to recover your funds in the event of loss or damage to your wallet. In the event of flooding or fire, you may lose this seed phrase, therefore losing your funds forever. Billfodl wallet solves that hurdle.

This wallet is fireproof and waterproof. It comes with lettered tiles for creating an indestructible backup of your seed phrase words. Additionally, it only needs you to insert the first four letters of each seed word and it fills in the rest. These tiles fit perfectly into the wallet, where they remain until you need them no more. The best part- this indestructible wallet costs only $99.

The alternative: Ledger Nano S

The Ledger name is another household brand in the crypto wallets space. It features a compact design, and is compatible with most software crypto wallets for easy monitoring and transfer of your coins. It can support over 1,000 crypto coins. It also utilizes a 24-word seed phrase for recovery of your funds in case of loss or damage.

The Ledger Nano X is a newer version than the S, and can support more currencies than its predecessor. It can also integrate with your smartphone for easy access to your stored coins. However, it features a battery and Bluetooth capabilities, which make it vulnerable to attacks. This makes the S the more preferred version, which will set you back $59.

Conclusion

Most crypto exchanges do not allow minors, but it’s perfectly legal to buy your kids some crypto. Since they would not be able to trade the coins until they turn 18, the best option is to hold the crypto assets in a hardware wallet, which grants access to anyone with the wallet and the corresponding PIN and seed phrase.