Does the word Bitcoin rings a bell in your head? By the mid of 2018, I’m quite sure it does! Cryptocurrencies like Bitcoin and Ethereum have taken the markets by storm in the past couple of years. I’ve been reading about these from the early stages and from my personal experience, I can surely say that investing in cryptocurrencies is not just a matter of luck. You need to put your brain into it.
It is crucial to understand the markets, value of currencies, and how it all works.
In order to trade in Bitcoin, the most essential factors are the update regarding its price, the exchanges for trading and last but probably the most important factor is the storage of your Bitcoins.
Yes, you cannot store digital currencies as physical ones as they are available only digitally. In order to store your digital assets, you need a wallet service that can help you to keep your funds secure and prevent them from attacks.
As the name suggests, Bitcoin wallet is secure space to store your Bitcoins. As Bitcoins and other cryptos are digital in nature, they have a private key associated with them. You can use these private keys are generated for individual pieces of cryptos i.e. each bitcoin that you own will have its own separate private key. This key is saved in the Bitcoin wallet of the user and can be accessed by the user for the purpose of sending and receiving Bitcoins.
As Bitcoins are the digital equivalent of money, Bitcoin wallets are equivalent of a physical wallet that is used to store money. However, this does not mean that the Bitcoins are stored in a wallet literally but the information associated with them such as private key and address are stored in it.
Being a researcher of the markets, I’ve been learning about the different wallet services. While some of these options offer utmost security, some are easy in terms of accessibility and UI. However, before choosing which wallet you should opt for, I highly recommend understanding the types of wallets available in the markets.
Types of Bitcoin Wallets
There are several types of Bitcoin wallets, and each of them provides ways to store and access digital currencies. You can choose any one of these according to their functions and suitability.
Software wallets — People who tend to work most of the times from their desktop and laptop devices, find software wallets are convenient for themselves. Installing a Bitcoin wallet directly on a computer allows the overall access to be in your hands. Moreover, the configuration of software wallets is super easy and they are free too. A risk that comes handy in such wallet systems is that they can be corrupted or can be in wrong hands if your device is stolen.
Mobile wallets — Mobile devices are the need of the hour and so are mobile wallets. Choosing a mobile wallet for trading in cryptos can be useful for you if you actively use Bitcoins on a daily basis. A mobile wallet will run on your smartphone in the form of an app and will store your private keys inside it. Along with being convenient, mobile wallets are highly prone to hacker attacks. If you choose to use mobile wallets, then it is important for you to take care of its security measures accordingly.
Paper wallets — A paper wallet is nothing but a document that holds a public address and a private key inside it. These components will allow you to store, buy or sell Bitcoins. According to me, paper wallets are one of the most safest wallet options to use as they are hard to be accessed by anyone else but you. Paper wallets often contain the information in the form of a printed QR code which can be scanned and used by you to make transactions.
Online wallets — You can use online wallets a.k.a. web wallets to store your private keys and trade through them. While using a web wallet, your private keys are stored on the server of a company that provides such services. I feel that this can be a big drawback when it comes to storing funds as all your data is stored on an online server which is owned by someone else. However, these web wallets enable you to access your funds instantly through an internet connected device and make payments through them easily.
Hardware wallets — If you wish to keep your private keys secure in the most efficient manner, I’d say hardware wallets are your go-to option. With a hardware wallet, you, as a user can store your private keys in a secure hardware device. Hardware wallets are secure, as well as resistant to computer viruses and malware. You get an added layer of security with the screens available in some of the hardware wallets. This screen can be used to verify and display wallet details.
In case of choosing a hardware wallet, I’d advise you to go with the option of a trusted manufacturer rather than choosing a random one for purchasing the device. While browsing through the options, you should check the ratings and reviews of consumers before finalising what’s best for you.
Now, if you are making up your mind to start trading in Bitcoin and wondering which wallet to choose for storing your funds; I’ve created a list of the best Bitcoin wallet to use for you.
Best Bitcoin Wallet to Use:
Ledger (Hardware wallet)
The Ledger Nano S is a hardware wallet that comes in a kit including components like the main device- Ledger, USB Cable, Keychain, Lanyard, Instruction Card and Recovery Card. I’ve talked to many people who’ve been used Ledger for quite a long time now and as per their views I can say that this wallet works very smoothly, has a simple setup, and is extremely easy to use. If you have made up your mind to use a hardware wallet, then it is important to have the knowledge of technology involved in the device in order to set it up and use the wallet with other devices as well.
The hardware wallet Ledger supports most of the cryptocurrencies which are available in the markets for hardware wallets. Moreover, along with a minimal design of the device, you’ll also notice that the UI is precisely designed so that the user can use all the options without any hurdles. On integrating Ledger with MyEtherWallet you can get access to a variety of Ethereum-based cryptocurrencies. As Hardware wallets are less prone to hacking and malicious attacks, Ledger is a good choice for its utmost security and economic prices.
Pros: The Ledger is a good hardware wallet in terms of Multi-currency support which provides easy software integration. It is affordable and also has OLED display. Ledger Nano S also supports FIDO Universal Second Factor authentication standard on Google, GitHub, Dropbox, or Dashlane.
Cons: Though the ratings have been good so far the brand reputation still growing
Trezor (Hardware wallet)
Trezor is another popular name when it comes to hardware wallets. The appearance of the wallet is very appealing too. It comes as small handy device which is about the shape of a car key and can be connected to computers via USB. Another great thing is the safety offered by the device. Even if you accidentally connect it to an infected computer device, it is capable of securely operating itself.
According to customer reviews, Trezor is a great option for securely keeping their Bitcoins as it provides a hassle-free experience and has not reported any issues as such. Although you might face some problems or confusion while setting up and installing the device. While searching through the available crypto options, I discovered that the wallet supports Bitcoin, Ethereum (along with ERC-20 tokens), Ethereum Classic, ZCash, Litecoin, Dash and Bitcoin Testnet.
Trezor is usually popular among the masses for simultaneously serving as both- offline cold storage device and allowing you to spend your coins. You won’t have to worry about the size as it is a small and easy to carry device. Moreover, if you wish to spend your bitcoins, you can easily do so by the device’s limited USB connection.
Trezor allows you to generate multiple addresses for making transactions. Also, it provides you with the option of passphrase that makes your coins more secure. But you need to keep your passphrase secure and remember it because in case, you forget that, your account cannot be recovered by any means.
Pros: Along with an easy user interface, Trezor provides you with advanced security options. Furthermore, the wallet supports a lot of cryptocurrencies and is economically affordable.
Cons: The wallet could use a standalone application or “software wallet” version to go with the browser extensions
Coinomi (Mobile wallet)
If you’re a mobile user, Coinomi is an amazing option for your needs. It is a multi-crypto online wallet which allows you to store private keys securely on your device. Coinomi is encrypted with a master password which makes it resistant against hackers thus ensuring security for your funds.
Coinomi is also suitable as an exchange if you are in need of converting one coin to another. All you need to do is use their embedded ShapeShift integration. Their is no other fee than the conversion fee so that’s again a plus. It uses a Hierarchical Deterministic Wallet (BIP44), which enables you to skip the hassle of backing up everything on a regular basis.
You can be assured about your privacy with Coinomi as it favors privacy and doesn’t compromise your personal information. You can spend your funds anonymously as the wallet will hide your IP address while pushing transactions on the blockchain.
Pros: Coinomi provides easy and fast trading capabilities through its in-built ShapeShift exchange. Through Coinomi, the private keys of your account are stored specifically in your personal device only. Also, if your phone is stolen, no one will be allowed to access your accounts without the set pin.
Cons: Buying cryptocurrencies directly in exchange of fiat is not possible via the Coinomi app. While some of the app code is accessible as open source to the public, other parts are kept private.
Samourai (Mobile wallet)
Are you in desperate need of finding a Bitcoin wallet for your mobile phone? Since smartphones are prone to hacking and attacks more often, I’m sure your needs include a secure, ideal, and reliable wallet that is effective even in the stealth mode and keeps your Bitcoins safe from prying hackers. The Samourai mobile wallet is a convenient option as it is highly focused on privacy and security. Moreover, it is one of the first mobile wallets that incorporated SegWit. According to me, this is a huge plus as it proves that the wallet will be supportive in future updates like the integration of Lightning Network.
The Samourai wallet does not support multisig, however, it allows you to maintain and operate multiple accounts to keep your business and personal transactions manageable. You can be rest assured about your information stored while accessing the wallet as it uses BIP39 passphrase ensuring security. One of the most amazing features that I found in this wallet was that it provided full user of the private keys to users. The private keys are created and stored on the device itself and are protected from being shared on servers or with other users.
Pros: Samourai wallet provides great privacy options along with excellent management system. It also has different advanced features for wallet management.
Cons: The Samourai wallet is relatively new and hence is not tested thoroughly. Moreover, it doesn’t have any hardware wallet support.
Exodus (Desktop wallet)
Exodus is a multi-cryptocurrency wallet that gives you full control over your crypto assets. Being a desktop wallet, Exodus has an impressive UI as it displays a combination of solid engineering and beautiful design. Privacy is not an issue when you are using Exodus as it encrypts your private keys and transaction data locally without the need of account setup. Moreover, you can easily track the value of your portfolio in real-time according to the change in markets.
Also, if you like to put your own design taste into wallet like setting your own background and themes according to your preferences, Exodus has the right options for you. You get the options of personalised look and custom themes with the wallet. Initially while using Exodus, I was stuck at certain places while developing the understanding of trade options. During such instances, the customer support team was extremely helpful. Despite the interactive design and support, the only point that puts Exodus in jeopardy is that the fee charged by the wallet for making transactions is a bit higher than its competitors.
Pros: Exodus platform provides you with an interactive interface along with powerful graphs and charts. If you are a cryptocurrency trader or portfolio builder, Exodus is the right choice to suffice your requirements.
Cons: Lack of 2 Factor Authentication raises security concerns
Technology is susceptible to errors no matter how much security is enhanced. Loopholes can be found everywhere. Using multiple different wallets for my crypto funds have brought me to the conclusion that even though some hardware and software wallets are extremely secure, they are not perfect nonetheless. Even if the software and device functionality are 100% secure, there’s always a chance of human error.
While selecting a wallet option for yourself, I’ll suggest you to learn about all the options individually, check their apps and websites and last but not the least, check their customer reviews. Once you finalize your option, invest your funds safely and securely, keeping in mind the regular updates about the platform you use.
Note: If you happen to know some other wallets that I’ve missed in the post, please write to me at firstname.lastname@example.org.