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?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
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 in to a physical device. So, Bitcoins can only be transferred to other accounts if the sender has access to the physical device.
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 WalletUsing 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.infoBlockchain.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.
CoinbaseCoinbase 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 BetterExodus and Electrum.
ExodusExodus supports multiple cryptocurrencies and has an integrated exchange that helps you exchange the 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
What Is the Best Bitcoin Wallet: Offline Storage is the AnswerFinally, 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 SThe Ledger Nano S wallet is a device that looks like a normal USB drive. The only difference is — you need to protect it like your life depends on it!
TrezorThe 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 to 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 WalletWalletGenerator.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?If you are just getting started with Bitcoin, I recommend that you begin with an online wallet like Blockchain.info or Coinbase. You can make your first Bitcoin purchase using these wallets too. 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 beleive it would be the best Bitcoin wllet 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 RememberYour 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
- Highest level of security
- Stores your Bitcoins offline so hackers can’t get in to it
- Must make sure you keep the physical device or paper secure