What Are Cryptocurrencies?
Bitcoins are a form of digital assets or “cryptocurrency.” These cryptocurrencies get created, transferred, and stored online. Most bitcoins can be exchanged for other cryptocurrencies. Meanwhile, you earn others as rewards through a process called mining. If you’re interested in earning bitcoins this way, you can read this article on how to mine Bitcoin. Bitcoins, like normal currencies, also function as a form of digital exchange. As such, you can exchange them for other currencies, products, and services. The main difference is that digital cryptocurrencies do not wear, tear, or break. Neither do they need a central bank or digital administrator. Instead, bitcoins are usually sent and received through encrypted online channels called blockchains. This essentially removes the middlemen in the payment process. This translates to less transaction costs. It also means that people will have a quicker, more private means of fund transfer. Cryptocurrencies are not exclusive to Bitcoin though. New and emerging cryptocurrencies are slowly sharing the limelight. These include ethereum, litecoin, dogecoin, and bitcoin cash. There’s also BAT, NEO, Ripple XRP, and Stellar XLM. However, bitcoin and ethereum are still considered as the two most valuable currencies. They’re also the most traded currencies. Find out exactly what makes bitcoin and ethereum the people’s favorites through this piece comparing ethereum and bitcoin.
What Are Bitcoin Wallets?
All Bitcoin transactions, including purchasing and storage, are usually conducted online. All Bitcoin users get a set of public and private keys for each Bitcoin address. Private keys are the set of keys that provide you access to your account. Public keys, on the other hand, are the keys shared with other users when they are about to send Bitcoins to you. Private keys and public keys usually work hand-in-hand. This is for transactions involving the transfer, sale, and purchase of Bitcoins. Without the keys, you will not be able to access your Bitcoin funds or undergo any transactions. In short, your account will get frozen. This is where the best bitcoin wallets come in. Bitcoin wallets are essentially virtual or hardware wallets for your Bitcoin keys. Take note, they protect the keys, and not the funds themselves. They are essential for protecting your private and public keys. The potential risks are of course from theft, malware, and even accidental loss. Aside from serving as a storage unit, the best bitcoin wallets also offer a means to send and receive payments. Most wallets are also accepting multiple cryptocurrencies for storage.
Best Bitcoin Wallets for Safe and Secure Transactions
Most of the best cryptocurrency exchanges have built-in wallets for their users. However, coin exchanges might not be enough to store all your bitcoins long-term. A better idea might be to have at least two types of wallets to store your bitcoins. Whether you prefer the privacy and security offered by hardware wallets or the convenience and trading opportunities offered by software wallets, it’s really about personal preference. Grow your Bitcoin assets while keeping your keys safe with the best bitcoin wallets available:
1.Coinbase
Coinbase is a fully-regulated and licensed Bitcoin exchange platform. As such, people can buy and sell digital currencies right through the program. The software allows users to schedule their cryptocurrency purchases regularly. What makes Coinbase special is that FDIC covers US residents or Coinbase USD wallets. FDIC is a form of financial insurance that covers up to $250,000. Coinbase also offers a competitive fee structure at only a 0.5% premium. This is when compared to similar digital cryptocurrency alternatives. Coinbase also offers vault protection where users can store their digital assets offline. Notably, you can store around 2% of funds on online storage, while the remaining are held offline. If Coinbase were to suffer from a breach of online storage, the insurance policy would pay. They would cover any customer funds lost as a result of the breach. Coinbase remains as primarily a coin exchange website. Therefore, it might not be a great idea to leave your cryptocurrency on this site for long periods. Coinbase is available as a web-based software compatible with Windows, Mac, and Linux. There is also a mobile app version compatible with iOS and Android phones.
2. SoFi
SoFi is a company focused on personal finance. The company behind SoFi provides student loan refinancing, mortgages, and personal loans. They also provide investment and banking services. The online program soon expanded to cryptocurrency trading and storage. Using the mobile app, members can purchase, trade, and store cryptocurrencies. Users can also purchase non-crypto stocks, stock bits, or fractional shares. In addition, they can also purchase marketable security exchange-traded funds (ETFs). The app provides summaries of all transactions along with the updated user portfolio. This means users can easily see their net contributions, total gains, and market gains. SoFi Invest uses several tools to keep cryptocurrencies safe. This includes two-factor authentication and SSL encryption that ensures all transactions are anonymous. They also use a strict data policy that keeps the personal information of its customers safe. The program also partnered with trusted coin exchange websites to complete all transactions. An example of one such website is Coinbase. SoFi is available as a web-based software compatible with Windows, Mac, and Linux. There is also a mobile app version compatible with iOS and Android phones.
3. Ledger Nano S
The Ledger Nano S is the first hardware wallet in the market. Like all hardware wallets, this device protects your private and public keys. Most malware can appear as neutral software. Some also have built-in mechanisms to avoid detection by anti-virus software. Hardware wallets store information using a hardware device. This is usually in the form of a USB, which is essentially immune to malware infection and hacking. Hardware wallets are also simplified to the single purpose of keeping the keys safe. Because of its minimalistic design, the hardware wallet can connect to any computer. Even then, it poses a very small risk of getting hacked or infected with malware. Aside from keeping the private key secure, the device also manages Bitcoin transactions. It does this by generating a digital key to sign off transactions. Digital keys prove that you are the owner of a specific private key without having to expose the key itself. The process is also similar to signing a check to authorize the transfer of money from the account. With the device plugged into the computer, users can initiate and complete transactions. These include the transfer, purchase, and sale of their Bitcoins. It seems that hardware wallets have a decided advantage over software and paper wallets when it comes to protecting your private keys. Ledger hardware wallets are available for sale at technology retail stores.
4. Ledger Nano X
The Ledger Nano X is a hardware wallet and the latest addition to the Ledger SAS products. As mentioned above, hardware wallets are secure offline storage devices for private keys. They also facilitate the encrypted transfers of bitcoins without revealing the actual keys. Ledger Nano X is the first crypto hardware wallet to have Bluetooth connectivity. Now, some users will think Bluetooth is a potential risk. However, this device only transmits public data. The private keys are never shared and are almost hardwired into the device so that it never leaves it. Besides this are the password encryption and seed back-up features. These ensure that you never lose your private key. The device also has a superior storage capacity, allowing users to store up to 100 coins at a time. It’s also running on rechargeable batteries. With all things considered, Ledger Nano is a must-have device for cryptocurrency investors including those who plan to store many different coins. It’s also ideal for those looking for the easiest and cheapest way to secure their coins. Ledger Nano X is available for purchase from technology retail stores.
5. Exodus
Exodus is a desktop-based, online multi-currency wallet that supports more than 100 digital currencies. These currencies include coins and tokens alike. The creators emphasized design and user interface. This makes it very easy for investors to view their portfolio summaries. All conversion rates and values are indicated in one table for easy viewing. The program’s in-app exchange and trading system is called ShapeShift. Users can exchange coins directly within the wallet using this program. And of course, there is also a secure wallet for protecting the private keys of each user. When you use Exodus, the private keys get stored on your device. This means that the software itself doesn’t have access to them. The wallet is password-protected. It’s also programmed to lock automatically after a selected period. The wallet is also designed to be “lite.” This means users never have to download the entire blockchain on their systems. This is commonly done to track past transactions, but it’s not needed for Exodus. These added security features and lite design makes the wallet more secure. Exodus is available in a software form and as a mobile application. The desktop-based software is compatible with Mac, Windows, and Linux. Meanwhile, the mobile app version is compatible with iOS and Android phones.
6. Blockchain
Blockchain is a long-standing wallet with an excellent track record. The software is one of the most popular wallets in the industry today. All transaction data and individual portfolios are available and updated live. Users can also buy and sell their bitcoins and ethereums right through the program. Even newcomers in the field of Bitcoin are also finding it easy to join in and use the program. With an Al address and a strong password, they’re ready to start trading Bitcoin. You can easily pair the desktop software with the mobile app using QR codes. The wallet employs hierarchical deterministic (HD) technology. The HD wallet can generate an unlimited number of addresses. This allows you to use the program on multiple devices in a secure manner without the risk of losing funds. The program also uses three-tier security, which includes email and SMS verification. The system also blocks external IP addresses from accessing your network. This system comes with a security tab that is always up and running. A color-coded alert system informs you right away about any existing threats. Blockchain is available as a mobile app compatible with Android and iOS devices.
7. Bread Wallet
Bread Wallet is a bitcoin wallet that stores, converts, and trades multiple cryptocurrencies. Users can purchase, sell, trade, and transfer bitcoins through the wallet. The wallet itself is free, but users need to pay transaction fees. These are the fees charged by the bank or third-party services for any transfer and purchase. The software has the ability to connect directly with the Bitcoin network. This means more privacy for users and faster transactions. The system is also designed to accommodate fund transfers using mere QR codes. The user interface is simple enough for both beginners and pros to navigate. As for security protocols, the program uses a PIN or touch ID for the wallet and to secure each account. The program doesn’t have any access to the users’ private keys. But it does make sure that transactions occur without interference from third-parties. The program also asks the owner at the outset for a recovery phrase in case they forget or lose the password. Bread Wallet is available as a mobile app compatible with most Android and iOS devices.
8. Edge
Edge also does not compromise when it comes to security. It uses a private password and username instead of a 25-word seed phrase. The company doesn’t have access to the username or password, or much less to the private key of the user. The private keys remain stored on the users’ devices. This means users retain full control over their funds at all times. There’s also an optional two-factor authentication system. This works as an extra precaution in case someone else gets a hold of their username and password. Users can also set spending limits on specific amounts. If they exceed the amount, the system will require another password verification. Edge is available as a mobile app for iOS and Android devices.
9. Trezor One
Founded by Satoshi Labs, Trezor One is the original manufacturer of hard wallets, offering secure storage solutions for your keys. This company is directly associated with the original developer of Bitcoins. As such, the device predates the Ledger Nano S hard wallet by a couple of years. It’s also the first hard wallet to introduce the concept of digital keys. It has the capability of signing off transactions without connecting to the internet. In addition, the device also supports more than 1,000 coins and tokens. This is impressive considering alternative cryptocurrencies were still developing at the time. Technically, you can only do Bitcoin transactions from the device to your computer. Your personal information and private key are never divulged over the network. The private key is also perpetually retained inside the device. Besides this, the device also uses PIN codes and passphrases to authenticate ownership. The device is also just a little larger than your standard car keys. It’s small enough to carry it around on a keychain or even in your pocket. Trezor One is available for purchase at technology retail stores.
10. Bitcoin Paper Wallet
Bitcoin Paper Wallet involves a printed version of your private and public key. It’s an example of offline wallets and regarded as a type of cold storage. It’s as simple as keeping a copy of your private key and Bitcoin addresses on paper in the form of simple QR codes. That’s it. In terms of benefits, the paper wallet doesn’t connect to the internet. This means it can’t catch malware and it’s impossible to hack. However, there is still a risk of theft if not stored in a safe place. You can encrypt some paper wallets by marking the encryption box on the side. Users would normally need a passphrase to access the keys. Granted, this paper wallet is a fragile object and you need to keep it safe from physical elements and theft. Paper wallet generators like Bitcoin Paper Wallet use Javascript. This means no data gets sent over the internet. You can also view your wallet before printing. Visit the Bitcoin Paper Wallet website to start printing your own paper wallets for free.
11. Coinomi
Coinomi is a multi-currency wallet that stores cryptocurrency coins and tokens. The software has native support for Bitcoin and the majority of altcoins and tokens. Users can store, manage, and exchange assets right through the program. Users also get multiple options for conducting exchanges. These include fixed or floating exchange rates. Aside from trading capabilities, the program employs a layered system of protection. This prevents potential hackers and malware from getting in. The wallet is non-custodial, which means the wallet doesn’t have access to your private keys. Private keys remain securely encrypted on your device at all times. This gives you complete freedom over your Bitcoin account. All personal information and transaction details are encrypted. Aside from this is the security password, backed up by a passphrase for recovery purposes. Coinomi is available in a software form and as a mobile application. The desktop-based software is compatible with Mac, Windows, and Linux. Meanwhile, the mobile app version is compatible with iOS and Android phones.
12. Mycelium
Mycelium is one of the most popular bitcoin wallets available, and for good reason. The device lets you send and receive bitcoins using your mobile phone. You can also access a local trader marketplace in the form of the Local Trader feature. This feature lets users search for other users interested in trading. There’s even a secure chat for traders to communicate. There’s also an in-app reputation system to let you know which traders are trustworthy. The system only ever shares generic information relevant to the trade. This ultimately protects your privacy without affecting trade. The program is also hierarchical deterministic (HD)-enabled. This just means that you can manage multiple accounts and never have to reuse the same address. Each wallet is secured by a unique PIN backed up by a recovery phrase that only the owner can access. Besides this, the system also supports most hardware wallets. This way, you can easily create back-ups or transfer your keys to another hard wallet. This is an effective back-up just in case you can’t access software wallets. Mycelium is available as a mobile app compatible with Android and iOS devices.
13. KeepKey
KeepKey is another hardware wallet that keeps your private and public keys safe. Like other hardware wallets, KeepKey cannot connect directly to the internet. There’s also a built-in crypto exchange site inside the wallet. This allows users to trade cryptocurrencies right through the wallet. You need to connect your device to the internet via USB. This allows it to transfer your bitcoins over an encrypted network. All the while, your private keys remain safe inside the device. The device also makes use of a sleek, user-friendly design and a digital screen any user will love. The device has a bulkier shape compared to the pocket-sized TREZOR or Ledger wallets. But this is not a problem. The KeepKey was, after all, designed to store large amounts of Bitcoin. A larger screen also makes it easier to navigate. The device also supports a limited number of cryptocurrencies compared to its competitors. Nonetheless, you can use any of the popular cryptocurrencies like Bitcoin, Ethereum, and Bitcoin Cash. Regardless of these concerns, the device poses a significant cost advantage. It’s sold at a much cheaper price than its competitors. KeepKey is available as a mobile app compatible with Android and iOS devices.
14. CoolWallet S
CoolWallet S is another example of a hard wallet that keeps your public and private keys safe. You can store more than 40 different cryptocurrencies, including Bitcoin and Bitcoin Cash. The device features a slim and sleek design that makes it easy to carry the device around. Part of the design is the built-in display that helps you view transaction details. This wallet connects to your Android or iOS device using Bluetooth. This is unlike most devices that connect via USB cable. It can also connect using near field communication (NFC) channels. The device stores your private key in a secure element chip embedded inside the device. The device also uses a combination of security protocols to protect your transactions. First is the Bluetooth technology that encrypts all transactions as they happen. There’s also a two-factor authentication system that checks your identity before clearing transactions. You can even customize the level of security that you want. If you choose a higher level of security, the device will add more numbers in your seed set. This makes the seed set more complicated, and thus more difficult to hack. If you remember, the seed set is the series of words used to quickly backup or recover the wallet. And since this device is HD-enabled, backup and recovery should be straightforward. CoolWallet S is available as a mobile app compatible with Android and iOS devices.
15. Bitcoin Core
Bitcoin Core is well-known as the software behind the Bitcoin network. As such, it is also one of the earliest pioneers of the software wallet. It takes a little bit of technical knowledge to get started with this program. Nonetheless, many still consider its security features to be one of the best. Be warned though. There are several requirements for your PC even before you can download the software. Your PC should have at least 145 GB disk space, a download capacity of 500 MB per day, and upload speeds of 5 GB per day. There are other requirements, but it’s best to look them up yourself. These requirements serve a purpose. It’s important to note that most activities using the software are naturally memory-intensive. This means your PC should have what it takes to keep up. Once connected, users become part of a large network of users running the same program. This network is the perfect place for selling, trading, and purchasing bitcoins. The program records all transactions except for incoming transactions made by you. This is kept in perfect privacy to protect the individual user. And when it comes to security, Bitcoin Core is compatible with the Tor service. This makes each IP address anonymous to potentially dangerous third parties. And while the software itself is free, you might need to pay for transaction fees. Third-party institutions charge these feeds for the sending and receiving of bitcoins. Bitcoin Core is available as a desktop-based program compatible with Windows 7 and later, Mac OS X, and Linux.
Different Types of Bitcoin Wallets
Software
The best bitcoin wallets come in three basic forms: software, hardware, and paper-printed wallets. Most software wallets are free. They act as personal finance software. Its main task is to keep track of Bitcoin balances and transactions. Coin exchanges are also integrated into most software wallets. This means users can purchase, sell, or transfer bitcoins right through the app. Most also employ a series of security protocols. This might include HD systems, two-factor authentication, and Bluetooth encryption. However, since these wallets are online, they still face risks.
Hardware
Hardware wallets are usually offline devices that aren’t connected to the internet. These devices function like USBs that you can connect to computers and phones. But unlike USBs, which have many uses, these devices get created for a single purpose. This is to store and protect private keys. This single-minded functionality essentially renders the hard wallets impenetrable to hackers and malware. Hardware wallets can also store a large number of bitcoins, or rather, bitcoin keys. The only problem with hardware wallets is there’s still a risk for accidental loss. Owners may throw them away by accident or other people might steal them. They can also be expensive, although the cost appears minimal compared to the value it protects.
Paper
Paper wallets are essentially the printed version of your private and public keys. These are also relatively secure as hackers and cybercriminals cannot get in. However, paper wallets are fragile things and run the risk of getting lost or destroyed. Users can safeguard their soft wallets through several means. They could laminate the wallet and keep it in a secure location. It’s also a good idea to store paper wallets in crypto steel capsules, which are specifically designed for this purpose.
Things to Consider When Purchasing a Bitcoin Wallets
Investing in cryptocurrencies is a highly speculative business. The market is also highly unregulated. This means that investment in this type of digital platform is very risky. There have even been instances when individuals lost millions of dollars due to fake wallets and system hacking. If you are still on the fence about Bitcoin, you can read this piece on whether Bitcoin is safe to invest in. Nonetheless, if you do decide to invest, having a legitimate bitcoin wallet is still key. However, it’s not a fail-proof solution to a wrong investment or a fake wallet. And when it comes to choosing the best bitcoin wallets, here are some of the important considerations you need to make:
Bitcoin Cash vs. Bitcoin Gold
Contrary to popular belief, Bitcoin is different from its Cash and Gold counterparts. The latter is a separate version that utilized the same open-source code of Bitcoin. That is, you can convert your Bitcoin to Bitcoin Cash and Bitcoin Gold, but you won’t be able to convert them back. Or at least, not without selling your Bitcoin Cash at the market rate and then buying Bitcoin at its market rate. Coins like these also have a significant incompatibility effect on the blockchains. They create two incompatible versions of the blockchain. To put it simply, the two currencies are no longer compatible and you cannot exchange it for the other.
Public vs. Private Keys
Each bitcoin address contains a pair of keys. This pair of keys comprises a public key and a private key. Your bitcoin wallet also stores a separate log of all of your transactions. This includes both incoming and outgoing transactions. A summary portfolio displays all the relevant information, which gets displayed on the main page. This informs users about what they spend and receive at all times. The private keys are randomly generated strings of numbers and letters. The system matches public keys with private keys to allow you to spend bitcoins. In short, these are the hashed or encrypted versions of your public keys. There’s a lot of mathematics involved in the encryption process. But the important thing is for you to be aware of your wallet address, and public and private keys. You need to keep your private key backed up at all times. Otherwise, you will no longer be able to access your bitcoin wallet to spend or even transfer funds.
Security Protocols
The bitcoin wallets you choose must have an effective set of security protocols. This might include user control for private keys, two-factor authentication, and multi-signature accounts. Lastly, you will also need to consider where and how you’ll want to access your wallet. Some services offer software-based storage that you can access using any device. Meanwhile, you can only access some software using a single device.
Other Considerations
Ease of use and compatibility are other things to consider. You’re going to want something easy to set up and easy to navigate. Imagine if you had to go through a labyrinth just to access your bitcoin, or worse if you lost access to your bitcoins because you forgot the password. The wallet you choose must be something you are comfortable with using and has plenty of support. Also bear in mind that you don’t need to stick to just one wallet. You might want to store most of your bitcoins in a more secure hardware wallet. Meanwhile, you can also keep some of it in a software wallet. This allows you convenient access for online payments. This way, you’ll be able to transfer only the bitcoins that you need for exchange at any time.
Final Thoughts on the Best Bitcoin Wallets
Now that we’ve listed some of the best bitcoin wallets we could find, it’s important to include a disclaimer: there is no perfect software, hardware, or even paper wallet to keep your Bitcoin keys 100% safe. Security in the Bitcoin world largely depends on the ability of the software to follow good practices. In the real world, you avoid exposing your wallet to potential threats. You should also do the same for your crypto assets. Take all precautionary measures to keep your passwords and keys as safe as possible. Each Bitcoin owner needs to employ smart strategies. These encompass the management, storage, and even investment of the crypto assets. Having a proactive approach and the right tools are the keys to a lifetime of secure Bitcoin assets. If you found this article helpful and want a deeper reading about the topic, be sure to check out our complete guide to investing in cryptocurrency. and how to trade cryptocurrencies like a pro. This is an ideal read for when you’re ready to start investing or trading your bitcoins.
