Ethereum is one of the most popular cryptocurrencies in the world. As a programmable blockchain, Ethereum allows developers to build and deploy decentralized applications on its network. The native cryptocurrency of the Ethereum blockchain is called Ether (ETH). To transact on the Ethereum network, users need an Ethereum wallet to store ETH and interact with decentralized applications.
What is an Ethereum wallet?
An Ethereum wallet is a software application that allows users to store and manage ETH, as well as interact with decentralized applications on the Ethereum blockchain. Wallets come in different forms such as desktop, mobile, hardware and paper wallets. They also differ in terms of features, security and ease of use.
At its core, an Ethereum wallet stores your private key and public address on the Ethereum blockchain. The public address is used to transact with others, while the private key allows you to digitally sign transactions to authorize the movement of ETH from your wallet. When creating a wallet, a cryptographic private and public key pair is generated. The public key acts as your wallet address for receiving funds, while the private key gives you access to spend funds from that address.
Types of Ethereum wallets
There are five main types of Ethereum wallets:
- Desktop wallets – Wallets installed on a PC or laptop such as Exodus, Atomic and MyEtherWallet (MEW).
- Mobile wallets – Wallets installed on a smartphone such as Coinbase Wallet, Trust Wallet and Argent.
- Hardware wallets – Physical devices that store crypto offline such as Ledger and Trezor devices.
- Paper wallets – Keys printed on paper for offline storage.
- Web/Browser wallets – Ethereum browser extensions such as MetaMask.
Each type of wallet has its own advantages and disadvantages in terms of security, convenience and features offered. Hardware wallets are considered the most secure for long term holdings. Meanwhile hot wallets like desktop and mobile wallets are more convenient for daily transactions, but can be more susceptible to hacking.
How many Ethereum wallets exist?
Given Ethereum’s popularity as the second largest cryptocurrency after Bitcoin, there are millions of Ethereum wallets currently in existence. However, it is difficult to determine the exact number of Ethereum wallets for a few reasons:
- Wallet addresses do not reveal identifiable ownership or user information.
- A single user can own multiple wallet addresses.
- Many wallets may be inactive or hold zero balances.
- New wallets are being created daily.
- Wallets can’t be unambiguously differentiated from smart contracts.
Nonetheless, some estimates can be made based on on-chain analytics of the Ethereum blockchain:
Unique Ethereum addresses
One metric to gauge Ethereum wallets is the number of unique addresses that have been created on the network. According to Etherscan, there are currently over 218 million unique Ethereum addresses as of October 2023. However, this is likely an overestimate of the number of wallets because a single user can generate multiple addresses from a single wallet.
Active Ethereum addresses
A better estimate is the number of active Ethereum addresses that have shown recent on-chain activity. Glassnode estimates there are currently over 68 million active Ethereum addresses with balances greater than 0 ETH as of October 2023.
| Date | Active Addresses |
|---|---|
| October 2023 | 68,457,576 |
| September 2023 | 59,201,070 |
| October 2022 | 39,948,709 |
This provides a more realistic estimate for the number of active wallets, as it excludes empty and inactive addresses. The number of active wallets has been growing steadily along with Ethereum’s adoption.
Non-empty Ethereum addresses
An even more conservative estimate is the number of Ethereum addresses holding a non-zero ETH balance. According to IntoTheBlock analytics, there are currently around 43 million Ethereum addresses holding greater than 0 ETH.
This eliminates addresses with trivial balances that are largely inactive on-chain. The number of non-empty wallets better reflects wallets actively used for transactions, investments and interacting with dapps.
Ethereum addresses vs wallets
It’s important to note the difference between Ethereum addresses and wallets. A wallet is a software application used to manage addresses. An Ethereum address is identifier on the blockchain derived from a wallet’s public and private key pair.
A single Ethereum wallet usually has many associated addresses. For example, an HD wallet deterministically generates a tree of thousands of public addresses from a single seed phrase. Other wallet types may generate a new address for each transaction to enhance privacy. Therefore, the number of unique addresses should always be higher than the number of wallets.
Centralized exchange wallets
In addition to individual self-hosted wallets, a significant amount of ETH is stored on centralized exchanges. Exchanges like Binance, Coinbase and Kraken hold large ETH reserves in their corporate wallets to facilitate trading and transactions on their platforms.
It is estimated that over 15% of the Ethereum supply is currently stored on centralized exchanges. However, this represents millions of individual user accounts rather than wallets.
Ethereum 2.0 wallets
With the ongoing transition to Ethereum 2.0, new types of Eth2 wallets are emerging:
- Validator wallets – Used to stake ETH in Eth2 validation protocol.
- Guardian/custodial wallets – Manage withdrawal keys for validating wallets.
Over 413,000 validators are currently active on the Beacon Chain, each requiring their own validator wallet. Many users also utilize a separate guardian wallet for security. This means the total number of Eth2 wallets is likely over 1 million and growing as staking expands.
Concentration of ETH ownership
In terms of distribution, Ethereum wallet ownership and wealth is still quite concentrated. Analytics show that only about 11% of addresses control over 90% of ETH supply:
| Addresses | ETH Balance | Share of Supply |
|---|---|---|
| 1 – 10 | 85,563,759 ETH | 76.06% |
| 10 – 100 | 15,590,800 ETH | 13.87% |
| 100 – 1k | 7,211,590 ETH | 6.41% |
| 1k – 10k | 2,834,162 ETH | 2.52% |
| 10k+ | 1,131,298 ETH | 1% |
However, this distribution has improved compared to previous years as Ethereum adoption grows. The number of addresses holding small amounts of ETH is exponentially larger than whales.
Future wallet growth
The number of Ethereum wallets will likely continue growing for the foreseeable future as adoption increases. Here are some key factors that could drive future wallet growth:
- New decentralized applications – More dapps launching will attract new Ethereum users.
- Scaling improvements – Upgrades like sharding will support more transactions and wallets.
- Institutional adoption – Greater investment interest will bring in new corporate and institutional wallets.
- DeFi growth – Decentralized finance protocols are attracting new retail and institutional wallets.
- NFTs – Non-fungible tokens continue attracting creators, collectors and investors to Ethereum.
Estimates based on Metcalfe’s Law for network effects indicate Ethereum addresses could easily grow into the hundreds of millions or billions long term if adoption reaches mainstream levels.
Conclusion
Determining the exact number of Ethereum wallets is challenging due to blockchain anonymity and address re-use. However, on-chain analytics suggest there are currently 40-60 million active Ethereum addresses with non-zero balances. This represents a conservative estimate for the number of wallets holding ETH for investment or transaction purposes.
The total number of Ethereum addresses created exceeds 218 million, but many are inactive or have trivial balances. As adoption increases, the number of active Ethereum wallets will likely continue growing exponentially over the coming years.