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You’ve probably have heard a whole lot about Bitcoin wallets…
But, you’re not sure exactly what they are and how they work.
This guide will clear everything up.
After reading, you’ll know which Bitcoin wallet is the best for you!
Bitcoin wallets act just like conventional wallets do, but with 3 main differences:
Another way to think of Bitcoin wallets are to modern bank accounts. Money is digitally stored and provide the tools to send and receive that money over the Internet.
Now that you have a better idea of how wallets work, you should start looking at which wallet to use.
Here’s a comprehensive list of popular wallets, with their pros and cons.
We’ll be categorizing the best Bitcoin wallets into two groups: hardware wallets, software wallets.
For the most part, web wallets are a thing of the past and won’t be covered much here.
Hardware wallets solve a very specific problem.
Bitcoin transactions require an internet connection, which has always been an inherent security risk.
Even though there are plenty of security measures, like password-protected wallets to stop malicious hackers from stealing your Bitcoin, a computer with security flaws will lead to an insecure Bitcoin wallet.
Here’s the thing with hardware wallets:
Even IF the connected device was compromised, the wallet would be unaffected.
This is a really powerful and attractive feature, which makes them one of the most popular ways to store large amounts of Bitcoin.
Now that you have an idea of why hardware wallets are so secure, let’s jump right into our favorite options.
Ledger is very well known in the Bitcoin space for providing some of the best wallets and security for the money.
They recently launched their newest wallet, the Ledger Nano X.
For a full review on the Ledger Nano X, check out our guide. In short, the Nano X features several lines of defense and an extremely intuitive user interface.
Trezor is one of the other major names in the cryptocurrency wallet space. They also came out with a new wallet recently, the Trezor Model T. Before, they had the Trezor Model One.
The Trezor T comes with a few upgrades over the one such as a touch screen, Bluetooth functionality, and more. For a full rundown on the Trezor T, check out our guide.
Keepkey is another great choice when it comes to Bitcoin hardware wallets. They were recently acquired by Shapeshift, a popular cryptocurrency exchange.
Keepkey is a bit older than the other mentioned wallets but is still a great option for storing cryptocurrency.
Software wallets can be run on your desktop, laptop, or smartphone.
Either way, what most people mean when they use the term ‘Software Wallet’ is an application that you run.
Software Bitcoin wallets are typically less secure than their hardware counterparts as they often have more target = “_blank” href=”https://searchsecurity.techtarget.com/definition/attack-vector”>attack vectors.
Now that you have a background in software Bitcoin wallets, let’s jump into your best options!
The most important software wallet that you’ll find is the native Bitcoin software.
It comes attached to a core node and gives you all the features that you could possibly desire.
Bitcoin Core builds on the native client by giving the option of handling all your tasks through a graphical user interface (GUI).
So really, this is the wallet for you if you’re seeking a balance between power and access. Please note that this wallet will take a long time to download as it must download the entire Bitcoin Blockchain history.
There is a lite version of wallets that don’t have to do this.
Electrum is a python-based wallet that provides an array of useful power features, without the need to run on a full node.
You can set transaction fees, use change addresses, create invoices, determine expirations, and much more.
Electrum balances convenient installation and resources with power – which is a great way for the average user to delve into more detailed Bitcoin uses.
Software wallets for your phone let you handle Bitcoin transactions on-the-go.
These are likely the least secure way of storing your Bitcoin, given how insecure smartphones are these days, so they’re usually used to store a small amount of Bitcoin – just enough to handle daily expenses, so that you don’t lose your life savings because of Google’s or Apple’s security issues.
As you would expect, Phone software wallets fall into two categories: iPhone wallets and Android wallets.
Many iOS users sing high praise for Breadwallet – particularly because of its minimalism. You’ll find the ability to make transactions without incurring in extra fees from using the wallet.
You can store your coins safely without having to know every detail about Bitcoin technology. You can even buy Bitcoin with fiat just like you would over Coinbase directly from the app.
But most importantly, it’s the slick implementation of a mobile Bitcoin wallet that sets Breadwallet apart from the competition – which makes it the perfect wallet for Bitcoin newcomers.
DropBit is one of the more popular iOS wallets out there due to its simplicity and levels of security.
Transactions can be sent to your friends through their phone number. It even comes with a social media feed feature similar to Cashapp or Venmo.
Similar to other wallets, the device has a 12-word long recovery phrase that can be used to recover the wallet in the event it’s lost or broken.
DropBit is also an HD Wallet (hierarchical deterministic) which means that on each transaction a new address is made allowing you to have additional levels of privacy.
The wallet also features a camera/QR code scanner that can make it easy to send transactions to other wallet addresses.
Lastly, the DropBit wallet is highly recommended due to how the wallet allows you to control your own private keys.
The Electrum app for Android gets the job done, albeit in a rough an aesthetically displeasing way.
All the core functionalities that you’ll find in the Electrum desktop application can also be found on in the Electrum android app.
However, when it comes to specifying settings for your fees and monitoring your change addresses, it becomes much easier to lose oversight on the Android app because the user interface looks unpolished.
Browsing the web for the best Android wallet options invariable points you to Mycelium. Mostly, users like the ability to have a visually pleasing power wallet, like Electrum at the tip of their finger.
But most importantly, Mycelium supports your Trezor wallet directly from your phone. Just use a micro USB to USB adapter and move funds from your hardware wallet directly with your phone.
This feature sets Mycelium apart from other Android wallets by preventing you to pull out your laptop whenever you want to move funds out of your favorite cold storage options.
Many of the Bitcoin wallets available for PC are also available for Mac, making the options rather similar.
As Atomic wallet is the only new one, we’ll give you some background on it.
Atomic Wallet is a secure, decentralized and anonymous wallet available to Mac users as well as several other platforms.
The name comes from one of its most interesting features: atomic swaps, which allow you to convert one cryptocurrency into another without any counterparty risk.
Of all the wallets we’ve recommended, it’s like got the most beautiful user interface, which is something we rate highly due to beginners having an easier time.
If you’re interested in Atomic Wallet, it can be downloaded above!
New Bitcoin users tend to prefer web wallets as they don’t require any executable downloads, they’re available anywhere with an internet connection and they have one of the simplest user interfaces.
Those are all great features, but unfortunately, when it comes to cryptocurrency, security is the number one priority.
For this reason alone, we can’t recommend web wallets to any of our readers.
Whether or not something is cheap or not shouldn’t play into whether it should be used.
Think about it.
You’re storing a worthwhile amount of money, why JUST go for an option because it’s free. As we’ve stated many times in this article, hardware wallets will always provide the highest levels of security.
With this being said, there are so many good free software wallets out there. You can’t go wrong with Electrum, Bitcoin Core, and Bread.
Nearly all Bitcoin wallets will have the same fees considering they input the same block priority. In Bitcoin, you pay differing amounts based on which block you want your transaction included in. Depending on the number of confirmations, you may have to wait longer to access funds.
The quicker you want your transaction sent, the more expensive it will be.
Regardless, Bitcoin transactions are extremely affordable and usually under a dollar!
This is one of the most frequently asked questions any Bitcoiner gets asked. Coinbase is an exchange and stores users funds for them. While they are heavily insured, in the event of a hack you aren’t 100% in charge of your money due to the way public and private keys work.
Play it safe, be smart, and pick a wallet after reading this guide and doing some more research.
For the most part, any hardware wallet will be the safest option due to their inherent extra levels of security. If you are set on using software, consider using Electrum or Bitcoin Core.
It’s impossible to interact with Bitcoin without a wallet so this is kind of a redundant question. Some newbies store their funds and assume it’s not in a wallet, but it’s just an exchange covering you which is never a good idea.
Be a good Bitcoiner, get your own wallet with keys and Bitcoin you control.
We highly recommend backing up all Bitcoin wallets that store a significant amount of funds. The most common way of doing this is by storing the private keys or backup phrases in multiple or secure setups.
We highly recommend a device like Billfodl, which lets you store important info in a near-indestructible way.
After reading this guide, your next steps for choosing a Bitcoin wallet should be a lot more clear.
We get Bitcoin and cryptocurrency can be a hard topic to swallow, but that’s what we’re here for.