There is a lot of confusion about what the best wallets are for Bitcoin and altcoins.
A lot of people think that you should only use hardware or paper wallets, but this isn’t always true!
There are many different kinds of cryptocurrency wallets to choose from, which can be overwhelming.
I’ll break down all the different types so that you know what they are and how they work together with each other.
What kind of wallet do I need? What’s the difference between hot vs cold storage? How do exchanges work with wallets?
These questions will be answered in detail below! Stay tuned for more updates on cryptocurrency news as well – it changes every day!
What is a Crypto Wallet?
A cryptocurrency wallet — also known as a Bitcoin wallet or crypto wallet — functions like a traditional wallet, but instead of paper currency, it holds proof of your digital cash.
A cryptocurrency wallet stores the public and private keys required to buy Bitcoin or other cryptocurrencies, and provides digital signatures authorizing each transaction. These digital wallets can be a device, a program on an app or online website, or a service offered by crypto exchanges.
You’ll need to keep safe and secure your private key that allows you to unlock your crypto wallet in order to trade or spend your cryptocurrency.Source: nerdwallet
Crypto wallets are the newest entrant in an increasingly digital world.
In other words, a bitcoin wallet or a cryptocurrency wallet is a place where you store bitcoin or virtual money for transactions and exchanges without fear of being stolen.
Types of Crypto wallets
There are many different types of cryptocurrency wallets to choose from: They are hot wallet or cold wallet.
Key considerations when choosing your wallet include the amount of bitcoin you plan to hold, how often you plan on spending them and finally, balancing security with convenience.
Most convenient way for people to hold smaller sums of bitcoin, it’s easy to use anywhere, just need the internet connection.
Different types include web, desktop or mobile hot wallet apps which vary by convenience vs safety trade-offs.
- Web wallet online is the most popular and trusted by most people because you can easily create a wallet account and it is completely free to create and set up an account.
- Desktop wallet: This is a wallet where you have to download wallet software and install it on your computer to manage and store your Bitcoins.
- Mobile wallet: This type of crypto wallet is active on your mobile and that’s where it stores the private key. These wallets are useful for quickly transacting small amounts of bitcoin on-the-go, especially with the comfort of scanning QR codes.
Cold wallets are a great way to securely store your bitcoin and Crypto. The two most popular types of cold storage are hardwares and paper-based wallets that you can easily carry around with you.
- Hardware wallet: This is a wallet that is completely separate from the internet. Cold wallet is like a USB, when you trade, you need to connect your hardware wallet to your computer to make transactions.
- Paper wallet: A wallet made of paper, on which there is a Private key, wallet address information and even a QR code. When needed, just scan the QR code to make a transaction.
Some key notes
A full Bitcoin wallet or Crypto wallet typically has some of the following components:
- Wallet address: A long string of numbers similar to the account number you open at each traditional bank today. This is a Public wallet address and you will provide this information to others when receiving Bitcoins from them.
- Secret key: You can understand this as a form of password. You will use this password to make Bitcoin transfers in your wallet.
Best Bitcoin wallets
Bitcoin wallets are essential for digital currency users. For this list of top choices, we looked at over 10 different Bitcoin wallets and found the following to be most helpful
Coinbase is one of the easiest ways to buy, sell and hold cryptocurrencies.
With Coinbase you can connect a US bank account with ease as well as transfer dollars in or out of your investing/trading account.
You can also use their standalone wallet for mobile which makes it easy to access all things crypto on-the-go!
Exodus is a desktop wallet designed to give you complete control over your cryptocurrency assets.
For starters, it’s the first desktop wallet that offers full compatibility with ShapeShift – a popular instant cryptocurrency exchange supporting dozens of tokens.
This means Exodus users have access to nearly a dozen cryptocurrencies.
Like other desktop wallets, Exodus stores cryptocurrency assets directly on your machine.
Because Exodus is a lite wallet, you never have to download the whole blockchain to your computer.
Exodus’s biggest claim to fame is its intuitive, user-friendly platform.Source: finder
Exodus is the best wallet for beginners because they can easily set it up and start using it right away.
The downside of Exodus is that its closed source code makes advanced users more nervous about security, as their funds are not protected by a public ledger like Bitcoin’s blockchain.
Handling bitcoin can be difficult can be a hard task even for the most tech savvy of users. Handling bitcoin can be outright impossible for inexperienced users.
Such inexperienced users usually tend to keep their bitcoin in hot wallets, these hot-wallets are very insecure and they can lose their money easily.
The alternatives to this to run one’s own cold wallet, but this is very difficult for users to handle.
The electrum wallet bridges this gap by giving a light wallet. It takes less than a second to create a new bitcoin address with the electrum wallet.
The UI is simple to use and it is a breeze to handle multiple addresses and keys. My most favourite feature is the ability to control the amount of outbound bitcoin transaction fees.
Since the software is open source the code is auditable and so it is more secure than closed source wallets like Jaxx or storing bitcoin in exchanges like poloniex or coinbase.Source: g2.com
Electrum is one of the original Bitcoin wallets. It has been around since 2011, two years after Bitcoin’s creation and it still hasn’t changed much ever since.
Electrum is not the most user-friendly wallet out there, but it does one thing better than any other Bitcoin wallet: security.
Electrum allows its users to set custom transaction fees, and has the option to choose between legacy Bitcoin and Segwit.
It also offers users the ability to determine the level of security they wish to use. For example, you can create a standard wallet, one with 2-factor authentication, or a multi-signature wallet.
You can also elongate your seed phrase with custom words.
The Mycelium cryptocurrency wallet is one of the oldest and most popular Bitcoin wallets available exclusively for mobile platforms, having first been released in 2013 as an Android app before later being ported to iOS as well.
Mycelium describes itself as the “default Bitcoin wallet” and while its claims to the title of most well-rated cryptocurrency wallet on the Play Store isn’t really accurate anymore, the app does have several noteworthy features.
For starters, Mycelium is entirely open source, which is one of the most essential features for any good cryptocurrency wallet.
The app also relies on the Simplified Payment Verification (SPV) technique, which allows it to confirm transactions without having to download the entire blockchain.Source: techradar
Mycelium is a Bitcoin wallet for mobile devices that has been around since 2014.
It’s open-source, meaning that the code can be reviewed and improved by anyone who wants to take on the task.
Mycelium currently supports Bitcoin, Ethereum tokens (including ERC20), FIO token, and more are being added as they’re developed!
Most people use it because of its clean interface without cluttering features or complicated navigation which makes transactions easier than ever before with just one swipe from your screen
TREZOR is a hardware wallet for the secure storage of cryptocurrencies.
Thereby, the hardware wallet supports more than 1000 cryptocurrencies, including Bitcoin and Ethereum.
TREZOR is a USB 2.0 device compatible with Windows, Linux and macOS (10.8 or higher).
Supports a variety of other security features, such as a password manager.Source: hardware-wallets
The Trezor hardware wallet is a device that can store your digital coins offline. The device has a small screen you plug into your computer or smartphone, which allows for secure connection management.
Currently, both the introductory-level model and higher end Model T are available on the company’s website with prices starting at $60 up to $181 respectively.
Launched in 2014, Ledger has transformed into a fast-paced, growing company developing infrastructure and security solutions for cryptocurrencies as well as blockchain applications for companies and individuals.
Born in Paris, the company has since expanded to more than 130 employees in France and San Francisco.
With 1,500,000 Ledger wallets already sold in 165 countries, the company aims at securing the new disruptive class of crypto assets.
Ledger has developed a distinctive operating system called BOLOS, which it integrates to a secure chip for its line of wallets. So far, Ledger takes pride in being the only market player to provide this technologySource: benzinga
When you purchase a Ledger, you are able to store all of your cryptocurrency assets in one place.
With the included Ledger Live software, not only can you track how much money is stored on each individual wallet and check balances (you also have over 1,800 digital coins and tokens available).
But with staking capabilities for some currencies like Bitcoin Gold or Ethereum Classic will allow users to earn rewards based off their balance when they stake them into an account within the app.
If you’re looking to convert your cryptocurrency into a more liquid asset, it is important that you have some balance between hot wallets and cold wallets.
Hot wallets are used for quick trading or purchases while the majority of your resources are kept in cold storage.
The two types need to be used together as one can easily be compromised without proper security measures being taken by the other.
You may want to know:
- Top best Crypto Exchange by volume ranked by Coinmarketcap
- What you need to know before buying Bitcoin or any othe Crypto
Which bitcoin wallet do you use in this list of Best Wallets for Bitcoin and Altcoins? Please leave me a comment below!