What is the best Bitcoin wallet? Let’s talk!
So, you’ve decided to buy Bitcoin. That’s great but… where will you store them?
You know what a wallet is, don’t you? Yes, that’s right! The place where you store your hard-earned cash.
Well, that’s how Bitcoins work… sort of. But instead you store your Bitcoins in a Bitcoin wallet. Bitcoin wallets are digital and are required for you to store, send and receive bitcoins.
Keeping your Bitcoins safe is very, very important. That’s why I’m here to help you protect them — just like you would a new born baby (kind of).
By the end of this guide, you will know what is the best Bitcoin wallet for you, and how to keep it safe. But first, let’s talk about why security is so important in the world of digital cash!
Table of Contents
- 1 Why Is Security So Important?
- 2 What Is the Best Bitcoin Wallet: Storing Bitcoins Online vs Offline
- 3 What Is the Best Bitcoin Wallet: Probably Not a Web Wallet
- 4 What Is the Best Bitcoin Wallet: Software Wallets are Better
- 5 What Is the Best Bitcoin Wallet: Offline Storage is the Answer
- 6 So, What Is the Best Bitcoin Wallet for You?
- 7 What Is the Best Bitcoin Wallet: Things to Remember
Why Is Security So Important?
Everywhere in the world is full of good and bad people. Similarly, the internet is filled with lots of good and bad people. These bad people on the internet are called hackers — and they constantly wait for opportunities to steal things.
There are lots of hackers out there that are after one thing — Bitcoins! After all, Bitcoin’s are worth a lot of money. (So, why wouldn’t they?) Therefore, it is your job to protect your Bitcoin wallet as your life depends on it.
Just like how internet banking allows you to access your account using a username and password. To access your Bitcoin wallet, you are given a Public Key (username) and a Private Key (password). To hack your Bitcoin wallet, hackers need to get access to your Private Key. So you need to make sure that the best Bitcoin wallet of your choice is secure.
In June 2011, hackers got access to the Private Keys of Mt. Gox’s (a cryptocurrency exchange) and stole 2609 Bitcoins. The second attack on Mt. Gox happened in 2014. This time, hackers stole around $350 million worth of Bitcoins.
Yes, you read that right! $350 million! The mistake was that Mt. Gox stored their Bitcoin in an online wallet — making it easy for hackers to access. If they had stored their Bitcoins in an offline wallet, these hacks would not have been possible.
These aren’t the only cases of Bitcoin’s being stolen, though — it happens often. This is because people do not keep the password (private key) to their Bitcoin wallet safe enough. The only thing you can do is learn from these mistakes and prevent them from happening to you.
So, what is the best Bitcoin wallet for you? What are the differences? How do you safely store your Bitcoins offline?
Let’s get into that now…
What Is the Best Bitcoin Wallet: Storing Bitcoins Online vs Offline
There are two ways of storing traditional money. You can choose to store it in your bank account, or you can cash it out and save it in a secure place. The money that is in your bank account is connected to the internet and can be hacked/stolen. However, the cash that you have in your wallet doesn’t have any connection to the internet. So, it’s impossible for anyone to hack/steal it.
In the same way, we can store Bitcoins online and offline. Offline wallets offer much higher security compared to online wallets. This is because offline wallets are not connected to the internet and online hackers can’t steal something that is not there.
We can store Bitcoins online in two ways:
(1) Web-Wallet: Website wallets can be accessed from anywhere and on any device as long as it has an internet connection.
(2) Software wallets: Download the software onto your computer which allows you to manage your Bitcoins. These are more secure than web wallets.
Offline wallets also come in two forms:
(1) Hardware wallets: This is just like a thumb drive (USB) where you can store your Bitcoins and keep your Bitcoins offline. You should store the hardware (USB) wallet in a safe place where no one can find it.
(2) Paper wallets: These allow you to store your wallet information on a piece of paper, completely off the internet. This way hackers cannot get access to your wallet information and so can’t access your Bitcoins.
Let’s help you decide what is the best Bitcoin wallet — we’ll take a look at the advantages and disadvantages of them all.
Storing Online (Web Wallets, Software Wallets)
Easy to use
Web wallets are like websites such as Facebook — you open your web browser, go the website and then log in with your username and password. Easy!
Software wallets are like Microsoft Word — you open the application from your desktop and then you’re in. You might have to put your password in, though.
Both options are easy to access and easy to use. They are not complicated and are good for beginners!
Quick Access to Bitcoins
Because online wallets are easy to log in to and offer a user-friendly platform, you have instant access to send and view your Bitcoins.
Note: A lot of web wallets allow you to purchase Bitcoins from them as well (such as Coinbase).
Free to use
Web wallets and software wallets are both free to use, that’s a step towards being the best Bitcoin wallet.
Online wallets are always connected to the internet, so they are always prone to attacks.
Web wallets offer low levels of security because all accounts are stored on a central server. This means that hackers can log in to your account and access your coins from any computer if they have your password.
Software wallets offer higher levels of security than web wallets because your information is downloaded on to your personal computer. So, your Bitcoins are stored in one location — they are online, but not accessible on the internet.
Storing Offline (Hardware Wallets, Paper Wallets)
An offline wallet is not connected to the internet. So, it is impossible for hackers to get access to it. The only way someone can access your Bitcoins is if they get hold of your hardware wallet and are able to unlock it. They are incredibly safe.
Bitcoin hardware wallets come with extra security protection. To view or send funds, you must type a password/code into a physical device. So, Bitcoins can only be transferred to other accounts if the sender has access to the physical device.
The advice of the day: Always keep your hardware/paper safe!
No Quick Access
You can’t start eating frozen food immediately, you need to defrost it first. Similarly, offline wallets are in a frozen state, it takes some time to unlock them!
Here’s an example: If you keep your Bitcoin paper wallet in your pocket and forget to remove it before you do the washing, the contents will be destroyed. Since there is no online copy of your wallet details, you will never be able to recover it. Which means one thing — all your Bitcoins are gone forever.
A similar thing could happen to a hardware wallet in the case of a fire etc. So, it’s important for you to keep multiple copies of your wallet information secured in different locations. Don’t just put them anywhere, though — just in places where only you know where they are.
Difficult to Setup
Setting up your cold-storage wallet can take some time.
Hardware wallets average at a price of around $90. So, you might want to look at other options if you’re only storing a low amount.
If this hasn’t answered your question of “What is the best Bitcoin wallet”, then let’s take a deeper look… shall we?
What Is the Best Bitcoin Wallet: Probably Not a Web Wallet
Using a web wallet is like asking someone to manage your money for you. You have limited control, but as an advantage, you don’t have to worry about managing it yourself.
These wallets are easy to use. You can log into them just like you would your email account. You will be able to access them from anywhere and at any time. All you need is a computer or mobile with internet access.
You need to be cautious when choosing a web wallet, though, because some might not be your best Bitcoin wallet options. If you use a website that has limited security, then your Bitcoins will be in danger. It’s simple! Always choose a wallet that has a good reputation. The two web wallets that I recommend (if any) are Blockchain.info and Coinbase.
Blockchain.info claims to have more than 23 million active wallets. It supports coins such as Ether and Bitcoin Cash and takes “less than three minutes” to set up.
This is how simple it is to set one up and send/receive Bitcoins!
Go to Blockchain.info on your browser and click on the “Get a Free Wallet” button at the top right of the page.
Once you have filled the form in, click “continue” and your wallet will be ready.
On the left-hand side, you have options that allow you to buy and exchange Bitcoins. On the right-hand side, you can see the price history of Bitcoin.
Imagine you want to send your friend some money… what would you need? You’d ask them for their bank account details, wouldn’t you?
Well, that’s how it works when you want to send Bitcoins. But instead of an account number, we use a public wallet address. You can see your wallet address by clicking on the request button.
Note: It is important that you don’t get confused between a Public Address and a Private Key. Your Public Address (or username) is usually 34 characters in length, but your Private Key (or password) is 64 characters in length.
In the above image, “15B1yuveuA9Ri3RteDXuxqgjNJYXmQ2KUV” would be your public wallet address. This is the address you would give to your friend if you wanted them to send you some Bitcoin.
To send Bitcoins to your friend, you would need to click the send button on your dashboard and then enter their public wallet address into the “To” field. This is a similar process to how you would send money to another bank account.
Coinbase in another web-based wallet. It doesn’t just offer Bitcoin wallet services though, it also offers Bitcoin Cash, Ether, and Litecoin wallet services. The process of sending and receiving coins is similar to Blockchain.info.
Online wallets take a fee for transactions, though. So, if you want to do lots of transactions, it will cost you a lot in transaction fees.
Online wallets don’t give you full control of your Private keys. Instead, they are accessed using the normal username and password method. This means they hold the private keys to your wallet, so if they get hacked then… so do your private keys. And when a hacker has access to your private keys, they have access to your funds. (Which is not cool if you have large amounts.)
Anyway, let’s move on to the safer version of online wallets — software wallet.
What Is the Best Bitcoin Wallet: Software Wallets are Better
With software wallets, they allow more control over your wallet when compared to web wallets. You access your wallet using a piece of software that you download onto your PC. Could it be your best Bitcoin wallet? Let’s see.
Software wallets can’t be accessed from different computers, though. They can only be accessed on the computer you downloaded it from. If you are going to use a software wallet then I recommend that you keep your computer up to date with protection software. There are viruses out there that can give hackers easy access to your funds!
It is important that you back up your software wallet too! If not, then physical damage to your PC could cause you to lose your coins forever.
Here are two of the most popular software wallets: Exodus and Electrum.
Exodus supports multiple cryptocurrencies and has an integrated exchange that helps you exchange different coins with one-another.
It has made great progress since it was launched and is available on Windows, Mac, and Linux operating systems. It gives you the control you need over your crypto assets and requires no technical knowledge to set up. Not to mention that it has a nice, user-friendly layout — making it perfect for beginners!
It is very simple to use and makes storing, sending and receiving Bitcoins easy! You can also set up recovery options, which means your wallet is safe if your computer stops working.
Electrum Bitcoin Wallet
The Electrum Bitcoin wallet is also one of the most popular software wallets and has been operating since 2011. It offers a good level of security and a cool range of features.
It is a decentralised software wallet which means that there is never any downtime (and adds extra security). Your private keys are also encrypted, making them harder for hackers to break in to and steal your funds! You can even export your private key so that you can access your wallet on other Bitcoin clients.
Overall, Electrum is a great choice if you’re looking for a free and secure software wallet!
What Is the Best Bitcoin Wallet: Offline Storage is the Answer
Finally, the bosses of cryptocurrency protection – the offline storage wallets!
If you’re looking to stay safe from online hackers, then your best Bitcoin wallet is a Bitcoin hardware wallet or a Bitcoin paper wallet. They prevent viscous malware or viruses that steal your private keys. They also protect you from nasty websites that try to steal your private keys (otherwise known as “phishing” sites).
The only disadvantage of using these types of offline storage is that they don’t protect you from physical theft. So, it’s super important for you to keep your hardware or paper wallet in a secure place.
Ledger Nano S
The Ledger Nano S wallet is a device that looks like a normal USB drive. The only difference is — you need to protect it as your life depends on it!
It isn’t too difficult to set up. All you need to do is connect it to your computer, go through the security settings, transfer your coins on to it, and boom! Your coins are now safe and sound.
The USB has a screen on it — this screen is what helps you authorize transactions and log in to your Nano Ledger S dashboard. This is a great added feature that provides extra security to your probably best Bitcoin wallet!
Unfortunately, this level of security does come with a price tag of $95. But it is most certainly worth paying if you have a large portfolio of coins!
The Trezor was the first Bitcoin hardware wallet created and is known to be one of the safest methods for storing your Bitcoins!
It is like the Ledger Nano S and offers a similar range of features. The initial set up isn’t too difficult and it allows you to back up your wallet in the case of physical theft!
Again, this level of security does come with a price… this time we’re talking around $99.
Bitcoin Paper Wallet
I recommend for you to use the following wallet generator — WalletGenerator.net. This wallet generator will create you a new wallet with a public key (username) and private key (password), which you can then print onto a piece of paper.
The keys generated are long, so typing them manually is difficult. That’s why the wallet generator also prints a QR code (like a bar code), which makes it easier for you to access.
It is impossible for online hackers to steal your password (or private key) because it doesn’t exist online. However, this doesn’t prevent physical theft.
So, What Is the Best Bitcoin Wallet for You?
However, if you are buying more than $100 worth of coins, I recommend transferring your coins straight over to a software wallet.
If you are really concerned about the security of your Bitcoins or you have a large amount invested, then I recommend moving over to an offline storage wallet, I believe it would be the best Bitcoin wallet for you.
Another thing that I would suggest is that you own multiple wallets. This way, you give yourself extra security. I’d only recommend this if you were storing $3000+. I know it might be tough keeping track of them all, but it’s better to be safe than sorry!
What Is the Best Bitcoin Wallet: Things to Remember
Your security is your responsibility. With all wallets, you must be careful. If you carelessly expose your private key, you could be at risk of losing all your funds! Just remember the following points to choosing the best Bitcoin wallet:
- Easy to use, especially for beginners
- Low levels of security
- You can purchase Bitcoin from them
- Offer an okay level of security if your computer is virus free
- Easy to use and get access to
- Can often offer different cryptocurrency wallets too
Hardware Wallets/Paper Wallets:
- Highest level of security
- Stores your Bitcoins offline so hackers can’t get into it
- Must make sure you keep the physical device or paper secure
And that’s all, folks! So, you should now have a better understanding of which wallet is most suited to your needs. Why don’t you let us know which wallet you choose?