What is a bitcoin wallet?
If you plan on buying, trading or using bitcoin or any cryptocurrency, a wallet is a necessity. In this guide we’ll discuss the types of Bitcoin wallets and why you may choose one over the other. As bitcoin and other cryptocurrencies are digital assets, the way they are used and stored differs from traditional currencies. A crypto wallet should be looked at as a way to access the cryptocurrency you own, as well as a way to send and receive it. Wallets can be on your mobile device, on your desktop, a physical hardware device that you can carry with you or even a piece of paper. Like all crypto wallets, a bitcoin wallet has both a private key and a public bitcoin address. The private key is what you use to access your public key or bitcoin address and interface with the bitcoin network. This can simply be thought of as your pin and is most commonly presented to the user as a 12-word passphrase. These words, or pin, will mean you can access your cryptocurrency wallet from anywhere. If you lose your wallet, you can use your passphrase to recover it. The public key or address can be used to send and receive bitcoin or BTC between parties.
Why do I need a wallet?
Before purchasing bitcoin, you’ll need to set up a wallet to store them. In this guide we’ll discuss types of Bitcoin wallets and why you may choose one over the other. Wallets can be on your mobile, on your desktop or even physical hardware than you can carry with you. When you set up your wallet, you will have what is known as a private key which functions as the password to access your Bitcoin. As you complete a transaction, you will then receive what is known as a public key, which connects you from one Bitcoin user to another. Please note: Never purchase a wallet on eBay. Someone may be attempting to sell you a wallet that has been tampered with to steal your bitcoin. Remember, regardless of which wallet you choose, keeping your bitcoin secure is most important.
Mobile Wallets
We recommend OKEx Wallet as the best all-round mobile wallet on the market. It offers features for both beginners and advanced users alike, including the ability to buy crypto, trade & exchange cryptocurrencies for each other, and store securely in your own ‘safebox’. OKEx supports 173 different coins including Bitcoin, Ethereum, XRP, EOS and ERC20 tokens such as OKB and Tether (USDT).
You can download the OKEX wallet for iOS here and Android here. We Recommended a mobile wallet if you own under $1000 worth of bitcoin.
Pros
- Free and easy to set up
- Accessibility: Your money lives directly on your smartphone or laptop.
- Convenience: Using Bitcoin mobile wallets allows you to send and receive bitcoins by scanning a QR code.
Cons
- Mobile and Desktop wallets are not secure enough to store large amounts of bitcoins.
Other Recommendations
- Download Edge wallet here. Edge is a mobile cryptocurrency wallet available for Android and iOS. The wallet offers in-app buy and sell, and in-app exchange between cryptocurrencies, and advanced security features. Great for both beginners and advanced users looking for an all-in-one wallet.
- Blockchain wallet for iPhone and Android users. It is easy and quick to set up for beginners; just download from the App Store and you are ready to go in minutes. Here is a quick video demonstration of setting up a Mobile Bitcoin Wallet
Desktop Wallets
Pros
- Free and easy to set up
- Accessibility: Your money lives directly on your smartphone or laptop.
- Convenience: Using Bitcoin mobile wallets allows you to send and receive bitcoins by scanning a QR code.
Cons
- Mobile and Desktop wallets are not secure enough to store large amounts of bitcoins.
- Recommendations
- We recommend Exodus as a desktop wallet. It is one of the most secure and convenient software wallets.
Physical Hardware Wallets
(Recommended if you own over $1000 in bitcoin)
Pros
- Security: Hardware wallets, also referred to as cold storage, have been designed to protect your private keys from malware, virus and phishing. They are the most secure way to store your bitcoins.
- Portability: It can be connected to any Windows, Linux or Mac machine as an external device. You can use it anywhere in the world with any machine.
- Extensibility: It is compatible with different wallets: MultiBit HD, Mycelium and others.
Cons
- Price: They aren’t free, but they are a necessary expense if you’re holding larger amounts of bitcoin.
Recommendations
We recommend Ledger Nano S and TREZOR, which are renowned for their security and ease of use.
Paper Wallets
Paper wallets are different from the other types of wallets and are often described as the most secure way to store your cryptocurrency. Unlike online wallets, this form of bitcoin storage is completely offline and physical, giving you full control. A paper wallet is exactly how it sounds, a piece of paper that contains your private key and public address, usually printed in the form of a QR code. Being a physical form of storage, it means you must take extra care to protect the paper. People with paper wallets often laminate the paper, or place it in a tamper-proof envelope and then within a safe to keep it completely safe and secure.
Pros
- Offline: Its offline nature means it’s protected from hackers and malware.
Cons
- Fragile: Paper wallets must be stored with thought and care.
Advice for keeping your cryptocurrency safe
- Create backups of your private keys. To protect against accidents such as a robbery, fire, or hard drive failure, it’s recommended to have a backup of your private keys kept off-site.
- Never give your private keys to anyone. Think of your private keys in the same way that you think of your pin code. When you share your private keys with someone, you are essentially depositing all of your funds into the hands of that person.
- Hardware Wallets: When generating your private keys, make sure you are in an offline and secure environment.
- Mobile and Desktop Wallets: Keep your software up to date. The latest version of the wallet software will have greater security.
Disclaimer: These recommendations are based on our opinions and we do not take responsibility for loss or damages as a result of using one of the aforementioned products.