In order to store Ether or make transactions, one needs to generate a wallet address. This address serves as a ledger which keeps track of transactions between parties. There are several kinds of wallets which can be used, most of which are explained below:
| Type of Wallet | Use Case |
|---|---|
| Desktop | Stores your wallet’s key locally on your computer using an application like Mist (Recommended) or Etherwall + GETH. |
| Hardware | Stores your wallet’s key on a piece of physical hardware like the Ledget Nano S or Trezor. |
| Online | Services like MyEtherWallet which act as a middle man which you can generate a wallet address with. You then store your private key somewhere (flash drive, 2FA protect storage, or print out) when you want to access your funds. |
| Paper | A printout out of your public address and private key for offline “cold storage” of Ether. Here is a good generator. |
| Exchange | Your currency sits on an exchange like BTC-e, Coinbase*, Kraken, or Poloniex. It is generally not recommended to leave currency on an exchange if you are not trading. |
Disclosure: the link to Coinbase is referral, using it to register will earn us both $10. Non-ref link here.
Recommended option is to use a desktop wallet and backup your private key for offline storage in at least two places. The golden rule is if your data doesn’t exist in two places (flash drive + paper), it doesn’t exist at all.