What crypto wallet is the best choice for business?

In times when crypto adoption is becoming mainstream, boosted by the continuous popularity growth of cryptocurrencies in finances, institutional recognition, and the influence of political leaders, businesses cannot stand aside. 

Businesses, as well as any other users, can tap into cryptocurrencies through a crypto wallet. Apart from sending and receiving crypto, a wallet can also be used to perform other financial operations, from generating crypto invoices to making mass payouts. A company can even use a wallet to integrate a payment gateway to its e-commerce website, or simply accept payments in cryptocurrencies directly from customers in its store.

This guide will clarify a crypto wallet and how it works, break down the main types of available crypto wallets and their pros and cons and explain what wallet would be the best for business.

How crypto wallets work

Crypto wallets function as tools for accessing and managing blockchain addresses, where cryptocurrency transactions are recorded. 

As blockchains rely heavily on cryptography, each wallet is associated with public and private keys. Public key is a cryptographic code that acts like a public unique address, to which others can send cryptocurrencies. It can be shared with others for receiving funds. On the other hand, a private key is a secure code that grants access to the funds stored at the associated blockchain address. Only a wallet owner should have access to this key, and it should never be shared and must be kept secure.

Whereas this key pair was initially used in most wallets, most modern wallets rely on a so-called seed phrase, also known as a recovery phrase. It is a combination of random nouns (usually, 6 or 12) put in a certain order, which serves the same purpose of access to the address as the private key. 

While traditional bank accounts store fiat money, crypto wallets store the keys needed to access and manage cryptocurrency on the blockchain. Using private keys or seed phrases, it is possible to easily transfer a blockchain address with its balance from one wallet to another, unlike bank accounts.

Custodial vs. non-custodial crypto wallets

All crypto wallets can be divided into custodial and non-custodial, mostly based on the criteria of fund ownership and responsibility.

Custodial wallets

Custodial crypto wallets are managed by a third-party provider, who holds the private keys on behalf of the user, simplifying the user’s experience and adding a layer of convenience.

Such a principle is beneficial, because it eases access to funds: users do not need to manage their private keys, making custodial wallets highly user-friendly. Furthermore, custodians offer recovery options if login credentials are lost. Many custodial wallets come equipped with additional features, and have a responsive support service.

However, custodial crypto wallets have clear cons. Users don’t have another choice but to trust the wallet provider to maintain the security and integrity of their funds. Custodial wallets work in a permisssioned manner, and usually require user verification.

Non-custodial wallets

Non-custodial crypto wallets give users full control of their private keys, meaning complete ownership over their crypto assets. 

Thus, users become the sole custodians of their private keys, ensuring complete control over their assets. Non-custodial wallets also offer greater privacy as they do not rely on third parties.

At the same time, losing the private key to a non-custodial wallet results in the permanent loss of access to funds, as there is no recovery option. They also require technical knowledge, and understanding of the basics of crypto management and security. Finally, wallets of this type often come with less customer support compared to custodial options.

Hot vs. cold crypto wallets

Apart from the ownership, another criteria for classifying crypto wallets is whether to use a hot or a cold wallet.

Hot wallets

In short, hot crypto wallets are wallets that are connected to the internet, enabling real-time transactions. These are ideal for individual users, or companies requiring frequent access to crypto.

On one hand, hot wallets allow users to send and receive digital currencies instantly, making them perfect for active transactions and day-to-day operations. Most hot wallets come with intuitive designs that simplify crypto management. In addition, they can be integrated with other business tools and platforms for streamlined operations.

On the other hand, the “always online” principle makes hot wallets vulnerable to cyberattacks: they are more susceptible to hacking, phishing, and malware. Due to this increased exposure to potential threats, hot wallets may not be the best for storing significant amounts of cryptocurrency.

Cold wallets

Cold crypto wallets are offline storage solutions, such as hardware wallets, USB drives, or even paper wallets. This type of wallets offers high security, as it is immune to online hacking attempts, which is crucial for long-term storage of significant amounts of crypto. 

But cold wallets are hardly handy for frequent use: accessing and making transactions with them requires extra steps, making them less practical for day-to-day business operations. There are also physical risks: cold wallets can be lost, stolen, or damaged, leading to potential loss of access if backups are not maintained.

Notably, many crypto service providers use mixed solutions for optimized security and accessibility. For example, crypto exchanges adopt this approach by maintaining hot wallets for active trading while securing the bulk of their reserves in cold storage to mitigate risks.

What type of crypto wallet is more suitable for businesses?

Many individual users lean to non-custodial wallets to have full control over their funds. However, it is not the case for businesses that choose custodial wallets, and here’s why:

• No need to manage private keys or organize self-custody. This simplifies operations for business owners and employees who may not have extensive crypto experience.
• Reduced risk of losing access to funds due to lost keys or compromised private keys. The wallet provider manages security, significantly lowering the risk of human error.
• Custodial services often adhere to regulatory standards, which helps businesses meet legal requirements.
• Custodial wallets offer features that support scaling operations, such as handling high transaction volumes efficiently.
• Businesses have professional support to resolve any technical or operational issues quickly, ensuring minimal disruptions to their operations.
• Some custodial services offer insurance against certain types of losses, providing an extra layer of protection for funds.

Essential crypto business wallet features

Besides the ability to send and receive cryptocurrency, we can highlight other features crucial for companies when selecting a crypto wallet.

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The first one is crypto conversion. It provides more stability by reducing risks associated with price fluctuations that cryptocurrencies are notorious for. Multi-user management is another important feature: for larger businesses, this allows different employees to manage funds while adhering to role-specific permissions. The support for fiat currencies is crucial, as enterprises mostly operate and report in them. Following this, an ideal crypto wallet should allow for withdrawing funds directly to a business bank account, integrating with traditional finance.

Why Cryptonix is the best business wallet

Cryptonix has developed a comprehensive custodial wallet tailored specifically for business needs. Here’s what makes Cryptonix the best choice:

1. Professional crypto custody. Cryptonix takes on the responsibility of securely storing crypto, eliminating the risk of losing access due to a lost seed phrase or compromised private keys. This custodial model ensures peace of mind for businesses.
2. Full-fledged user management. In Cryptonix, businesses can assign multiple user accounts with different roles and access rights, enabling seamless and secure team management.
3. Multi-blockchain support. Cryptonix supports major blockchains, including Bitcoin, Ethereum, Litecoin, Solana, and TON, allowing companies to manage various cryptocurrencies in these networks efficiently.
4. Advanced reporting tools. Cryptonix offers detailed transaction reporting that can be exported, similar to traditional bank statements. This feature simplifies bookkeeping and financial audits.
5. Built-in conversion. The wallet includes an integrated tool for exchanging cryptocurrencies or converting them into fiat currencies like U.S. dollar (USD) and euro (EUR), making it easy to manage diverse assets.
6. Crypto payment gateway. The wallet from Cryptonix seamlessly integrates with other business solutions provided by the company, including its crypto payment button, which allows companies to start accepting crypto payments directly on their websites by inserting a few lines of code to the frontend. 
7. QR-code cashier. For in-person transactions, Cryptonix recently released the mini app for Telegram. It can generate QR codes upon request, allowing merchants to accept crypto payments in-store.
8. Crypto invoice generator. The built-in invoice generator allows entrepreneurs to create professional invoices that include a description of the payment, recipient and payee details, and a due date. This feature streamlines the payment process for both the business and its customers.

Conclusion

For businesses considering cryptocurrencies, a custodial wallet is often the most practical choice due to its ease of use, enhanced security features, and comprehensive support. Custodial wallets minimize the risks and complexities associated with self-custody, allowing businesses to focus on their core operations without worrying about private key management. 

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Cryptonix caters on these benefits, providing a platform that is both secure and tailored to meet the unique needs of business users. With its powerful suite of tools, from multi-user management and detailed reporting to built-in crypto-to-fiat conversion, Cryptonix streamlines the entire process of managing digital assets. Additionally, its integration with crypto payment processing solutions and invoice generator ensures that businesses can seamlessly incorporate cryptocurrency into their payment systems, enhancing operational efficiency and broadening their customer experience.