Bitcoin is the buzzword today. In fact, it has become synonymous with cryptocurrency. And, if the current market trends are to be believed, it is definitely here to stay.
The seen an exponential rise in the value of BTC, with each coin being valued at thousands of dollars. This has for obvious reasons compelled investors to consider investments in BTC. In order to secure a profitable investment, it is essential to know all the features of this cryptocurrency. It starts with understanding the structure and function of a Bitcoin wallet.
In this article, I talk about Bitcoin wallets. I also listed the best bitcoin wallets. So, stay tuned.
What is a BitCoin Wallet?
A Bitcoin wallet is akin to a regular money wallet that you use to stash your cash and coins. The only difference is that it is not a physical wallet; it is software that one can access with a private key.
Bitcoin is a digital asset and so is not of a tangible nature. This explains why most crypto wallets are online wallets. A bitcoin wallet stores all your Bitcoin and transaction-related data. Bitcoin can be exchanged for other crypto or can be used to make purchases.
Every Bitcoin wallet makes use of a private key or seed to secure the wallet. No transaction is completed or validated without furnishing the private key. The unique seed keeps others from stealing your Bitcoins or prevents transactions from being intercepted. Thus, a cryptocurrency wallet ensures easy and safe transactions. Security measures such as encryption and passwords prevent unauthorized access.
On the whole, a Bitcoin wallet is a crypto exchange that provides investors and members a space to keep their bitcoin safe. The features of Bitcoin wallets vary according to the company you decide to work with. Some only let you store digital currencies without any facility to buy or sell Bitcoin. Others offer two-level authentications and QR-coded transactions for better security while also allowing you to make purchases.
The amount of control an owner enjoys depends on the type of wallet you purchase or register for. There are different kinds of Bitcoin wallets. We’ve discussed some of them below.
Web Wallet:
As the name suggests, a web wallet is an online wallet. Web wallets can be accessed via a web browser at any time and from anywhere. You are not tied down to a single device making it a very convenient option. Thus, if your device crashes, if you replace an old one or accidentally delete your wallet, you can still access your Bitcoin wallet from another device as long as you have the log-in credentials.
However, the only drawback is that a web wallet stores all your private keys; it is managed by a provider. Hence, investors need to be cautious. Nevertheless, selected bitcoin web wallets to allow owners to control private keys.
Also called a cold wallet, a hardware wallet creates an option for offline storage of Bitcoin. A hardware wallet is a physical device designed like a pen drive. To access your Bitcoins, the device must be plugged into a computer using a USB cable.
Since a hardware wallet is not accessed over the web, the risk of interceptions or attacks is greatly reduced. Hardware wallets are therefore touted as the most secure Bitcoin wallets in the market. The selling price of a hardware wallet is anywhere between $100 and $200.
Desktop Wallet:
These are bitcoin wallet apps that must be downloaded and installed on a desktop device. The greatest advantage of a desktop wallet is that you enjoy complete control of your account; private keys are not managed by a provider or third party. This translates to a high level of security. The private keys and transaction data are stored on the computer hard drive.
A desktop wallet however restricts access to a single device only. Not only this, as a security measure one must take regular backups of the wallet. You risk losing all your bitcoins if the wallet gets corrupted or your desktop crashes.
Mobile Wallets:
Mobile wallets are desktop wallets with added functionalities. They are designed to be compatible with mobile devices. They perform the regular functions of buying, selling, and exchanging bitcoins. They are capable of scanning QR codes. Besides, features such as touch screens make it very easy to navigate the user interface.
Choosing the right Bitcoin wallet involves factoring in the scale at which you invest, the digital currencies you invest in, ease of use, security, and fees.
How Does The Bitcoin Wallet Work?
While we’ve mentioned that a bitcoin wallet is used to store digital currencies, technically speaking it doesn’t. It is basically a link or a gateway to the blockchain where all transactions are conducted. Thus, all Bitcoin transactions are basically an exchange between wallets.
Every wallet generates private keys and uses them to validate transactions.
My Honest Review About The Best Bitcoin Wallets
Whether you are a seasoned cryptocurrency investor or an amateur, here’s a list of the best bitcoin wallets. Each of these Bitcoin wallets has been reviewed for different features.
Coinbase is my top pick for the best bitcoin wallet. Given its minimal learning curve, setting up a cryptocurrency profile on the platform is uncomplicated. It is great for beginners!
One must be clear that Coinbase is not a personal wallet, but an exchange. You can use the wallet to buy, sell, transfer and store cryptocurrency all from one central location. Some of the tradable currencies include Bitcoin, Litecoin, Ethereum, and Bitcoin Cash. The ability to schedule trading on a daily, weekly, or monthly basis puts you in better control of recurring buys.
There’s more. Coinbase allows users to store their digital assets in an offline vault, adding yet another layer of security. The wallet offers support across Android and iOS platforms as well as trading in over 100 countries. Coinbase has earned a reputation as the largest, safest, and best Bitcoin wallet. You might, however, want to compare it for transaction fees which are slightly on the higher side.
Trezor ranked as one of the best bitcoin wallets in the hardware wallet category. This cold storage wallet lets you store your cryptocurrency offline. The wallet is available in two versions – the basic Trezor One and the advanced Trezor Model T.
The Trezor wallet is made like a small plug-in device, resembling a pen drive in design. The USB type C cable is common to both versions and is used to connect the wallet to your smartphone, computer, or laptop. The second-generation Model T features a touchscreen and upgraded interface which affords many conveniences. The use of MicroSD cards further secures the wallet with PIN encryption.
Trezor and Ledger are competitors for hardware wallets. However, the access to third-party platforms such as Shapeshift and Changelly gives Trezor an edge over the latter. Trezor supports a wide range of tradable cryptocurrencies.
Both the iterations support over 1500 currencies with more being added daily. The makers also integrate the Ledger Live software on the Nano X and S. Using this interface, one can transfer currencies, check wallet balances, manage portfolios and create cryptocurrency-wise wallets. The Nano S supports only 18 wallets at a time while the Nano X supports 100.
Ledger offers an affordable Bitcoin storage option. It is an open-source, secure platform. The Nano S model is an ideal choice for a beginner just getting around the system. The Bluetooth feature, while it adds convenience, has also been viewed as a security loophole.
Are you a cryptocurrency investor who is always on the move? Do you use your mobile or tablet for almost everything, including trading? Then, this is the best bitcoin wallet for you.
Mycelium is 100% open-source software. Designed for Android and iOS platforms, the wallet supports mobile devices only; there is no desktop version. Mycelium is a hot wallet with an option for offline storage too. To add, it allows investors to set up custom transaction fees. This gives them the freedom to decide how long they would like to wait before a transaction is completed. At Mycelium, one can set up a spending and savings Bitcoin account.
The other favourable features include an inbuilt exchange, highly intuitive user interface and inter-wallet operability. The facility for inter-wallet operability enables the transfer of coins across wallets and blockchains. This best hot bitcoin wallet can be used with hardware wallets such as Trezor and Ledger.
Mycelium is an exclusive Bitcoin wallet, but also supports another crypto namely Ethereum and ERC -2 tokens. Getting started with Mycelium is super easy. Download the app free of cost from the official website. Given that mobile devices are at a higher risk of interception and attacks, Mycelium incorporates hard-to-break security features such as QR-coded transactions and complete private key control.
As one of the oldest Bitcoin wallets on the market, I couldn’t but help include Electrum on our list of the best bitcoin wallets. It boasts of numerous favorable features.
Electrum is nearly a decade old. It was launched in 2011, two years after Bitcoin made its debut on the crypto scene. It works well with most platforms – Android, Linux, Windows, and Mac included.
As a hot wallet, Electrum is connected over the internet. Thus, it verifies all BTC transactions over secure servers. It dispenses with the need to download the entire Bitcoin Blockchain earning it the title of a “thin wallet”. Given this, the space requirements on your hard drive are also quite low.
The process of setting up the wallet is quick and relatively hassle-free. The format of this open-source platform hasn’t changed much since its inception. It is a great option if you are just getting started with cryptocurrencies or eWallets. You can customize the transaction fees. Electrum also offers multiple security features such as a basic wallet with a 2-step verification or a multiple-signature authentication wallet.
The wallet also generates a seed phrase; a random list of 12 words when you launch the app that lets one access the wallet and stores all the information needed to receive Bitcoins. The only possible downside of Electrum is that it supports Bitcoin only; it does not list any other of the cryptocurrencies.
For starters, Exodus is a virtual wallet available in two versions: desktop and mobile. It has a fresh user interface integrated with a number of investment-friendly tools. What Exodus does differently from its competitors is that it creates a portfolio, featuring your digital crypto as live charts and graphs.
The digital wallet secures your Bitcoin stash with a private access key stored on your computer. As a security measure, you should always create a backup for the key in the event that your computer crashes or is stolen.
Exodus pairs well with Trezor wallets. Thus, investors also have the option of securing their digital assets offline in a hardware wallet. Exodus ranks as one of the best bitcoin wallets also because of the type of groups they target – newbies and small investors. Unlike most of the other wallets listed above, Exodus is not fully open-source software. You can set the transaction fees for Bitcoin only.
If privacy is a key selection criterion for a Bitcoin wallet, Wasabi is our recommendation for the best bitcoin wallet.
Wasabi is an open-source non-custodial wallet. What does that mean? You have complete control over your private keys. Besides, you can have open access to your funds. A non-custodial wallet is more secure and allows for instant withdrawals.
The wallet is compatible with devices running Windows, macOS, and Linux. The use of trustless CoinJoin transactions is a standout feature of the Wasabi wallet.
A CoinJoin transaction involves pooling coins from multiple participants into a single transaction. It mixes up the inputs and outputs, thus making it difficult for hackers to identify the source and target of the transaction. Not only this, it conducts all transactions over the Tor network. This hides the IP addresses from public view adding another layer of security.
Wasabi is an open-source, hot wallet, Nevertheless, it does a good job keeping your Bitcoin funds safe. The only possible issue with Wasabi is that it can take you a while to get familiar with the interface.
On number 8, I place and recommend Robinhood as one of the best bitcoin wallets on the market for beginners.
Set up as a free stock trading platform, Robinhood allows users to buy and sell cryptocurrencies as one would do on an exchange. It also lets you store your crypto like a regular eWallet. Robinhood deals in a good range of cryptocurrencies including Bitcoin, Dogecoin, and Ethereum.
Robinhood has a mobile and desktop version. It is a “free-to-use” platform and that probably gives Robinhood an edge over its competitors. There are no transaction costs. The disadvantage is that you cannot withdraw funds from your Robinhood wallet. There is only the option of transferring funds to an external account after a sale.
Speaking of security, Robinhood allows users to add custom PIN codes and opt for two-factor authentication.
Edge was known as Airbitz when it was first launched. Back then, it was an exclusive Bitcoin wallet. The upgraded version now supports multiple altcoins making it popular with cryptocurrency investors. By providing a single wallet to store all your currencies, the Edge app makes trading cryptocurrencies a breeze. You can log in using multiple devices.
This best bitcoin wallet has received rave reviews for its security. We are talking about client-side encryption. Thus, Edge has no control over your wallet or the stored bitcoins. You control complete access to your wallet using a pre-decided username and password. Edge also does not ask users to furnish any personally identifying data when registering with the platform. There is an automatic backup feature on this wallet too.
The Edge wallet is free to download and install. It does however have a transaction fee and a designated exchange fee.
Blockchain is yet another hot wallet on our list of the best bitcoin wallets. It has earned a reputation as being one of the safest cryptocurrency wallets. Introduced in 2011, this crypto wallet lets you buy, sell and trade currencies of your choice.
Blockchain allows you to buy Bitcoin using your credit or debit card. You can also link the wallet to your bank account. Every bitcoin wallet at Blockchain is secured with a unique Private Key. The Private Key gives you complete control over your funds. There is an in-built security center that walks you through the process of protecting your funds and discouraging unauthorized access. This hot wallet can be accessed on a mobile device or a desktop.
The wallet has an intuitive interface that is very easy to use. The exchange supports 4 fiat currencies: TRY, GBP, EUR, and USD. If you choose to get a Blockchain account, you can also get information on real-time cryptocurrency prices, data charts, blockchain data API, and interest-bearing accounts. The wallet supports iOS and Android devices. You are also allowed to adjust transaction fees.
Guarda is a non-custodial crypto wallet. Thus, you retain complete ownership of your digital assets and the private seed. As a multiplatform wallet, Guarda is available for use on mobile devices and desktops. There is a web version and a chrome browser extension too.
Guarda boasts of several advantageous features that make it one of the best bitcoin wallets on the market. Buying and selling crypto is completed instantly from within the wallet. Every wallet at Blockchain is password protected. The wallet also auto-generates a backup file for security purposes. Users can buy cryptocurrency using a debit card. Guarda supports 40+ cryptocurrencies on its exchange. While Guarda has a fee for every transaction, it can be customised by the user.
This list of the best bitcoin wallets would be incomplete without a mention of Binance. With a great range of features on offer, Binance gives you all the tools you need to trade crypto profitably. The platform deals in over 500 cryptocurrencies and supports global investors. Binance also allows trades in around 19 fiat currencies. To add, there is no limit on the transaction types.
Binance secures all transactions with two-factor authentication. Larger trades require identity verification, especially for the Binance US version. Another standout feature is the rate chart. Binance charges highly competitive fees for transactions completed on its platform; in fact, it is among the lowest in the industry.
Binance uses a graded format, offering three trading levels based on experience. If compared Binance leans more in favor of professional Bitcoin investors. Beginners can get a little overwhelmed when using the platform.
Interested in owning Bitcoin? Looking to make a good profit? It all starts with choosing the best Bitcoin wallets; wallets that will not only ensure safe crypto transactions and storage but also those that will handhold you along the way.
Do comparisons and make your pick!
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