Despite its recent decline, BTC remains a precious asset. Worth just pennies late last decade, today a single Bitcoin is worth thousands. People who own BTC want to make sure they’re safe and secure. To accomplish this, you need a digital wallet to store the codes (Private Keys) that link your Bitcoin to you and only you. So how do we choose the best Bitcoin wallet or wallets? Find out in the Best Bitcoin Wallets 2019 review.
What is a Bitcoin Wallet?
Bitcoins are bits of code that are unique and which cannot be copied. They live forever on the BTC blockchain, a complex data storage tool that uses computer power (Bitcoin miners) all around the world to keep its data secure.
There are secret codes associated with all of the coins, and when someone “owns” a BTC, they really own the codes that give them the ability to transfer and spend it. Bitcoin never leaves the blockchain. The codes (Private Keys) just give the owner the ability to do stuff with certain BTC balances on the blockchain. When the Bitcoin is spent or sold, that power is transferred to the new owner. Bearing that in mind, let’s define get into the bitcoin wallets per se.
A Bitcoin wallet is like your everyday wallet or purse, but digital. With these digital wallets installed in your mobile phone, tablet or computer you’ll be able to access your money in Bitcoin form, which you could spend on purchases, transfer to other users, receive or exchange for dollars. In a nutshell, this piece of software allows you to:
- Safely store your private keys
- Interact with your Bitcoin, for trading, transferring, spending, and more. Without a wallet, there’s no way to interact with your BTC.
Why is so crucial to use a solid bitcoin wallet? The answer is quite obvious when you know the fundamentals: your bitcoins’ security is only as good as the security of the wallet they sit in. If a hacker comes to steal your private keys, you’ll never get your BTC back.
“Choose a good Bitcoin wallet, and you’ll never have to worry about whether your Bitcoin is safe or not.”
How to Choose a Bitcoin Wallet
There are tons of Bitcoin wallets out there. Tons. A good Bitcoin wallet will be easy to use, will be able to demonstrate its security (through code audit and other methods), and will offer you all the features that you need. There are tons of reviews about Bitcoin wallets out there. It’s important to do your research and choose a wallet that you’re sure is the real deal. Sometimes phishing sites are set up to steal people’s keys, providing copycat wallets which look like the real thing, but which are fraudulent. Ask around on Reddit, Google, and Bitcointalk until you’re sure that you’re downloading the real deal.
Bitcoin wallets explained: how does a wallet work?
Speaking about the more technical part, a wallet allows you to access the blockchain, create your own private passwords and digitally sign any transactions you make. These passwords would actually be the representation of your Bitcoins because if you back them up, you’ll be able to take them with you and access your money from any other wallet you wish to install.
Since every transaction goes directly through this codified public record or blockchain, where each transaction has to be validated by the community, it doesn’t matter if your wallet is off when you receive a transfer. As soon as you connect it, it will update and show you your new balance.
Different Types of Wallets
Bitcoin Hot Wallets
A “Hot Wallet” is simply a digital Bitcoin wallet connected at all times to the internet. A classic example is Blockchain, the old and ungoogleable named Bitcoin wallet which is nonetheless useful and reliable. Hot wallets have inherent risks. With a constant internet connection, there’s always the chance that a hacker could sneak their way in and steal your coins.
Bitcoin Cold Wallets
A cold wallet is simply a Bitcoin wallet that’s not attached to the internet. This can work a bunch of ways. You could take a software wallet that’s usually connected to the internet, like Jaxx wallet, but launch the program on a laptop that has never been connected to the internet.
Bitcoin Hardware Wallets
Hardware wallets are cold wallets with a twist. Products like the Ledger Nano S store your keys, but also serve as a way of unlocking digital wallets without using a password. The Nano S looks just like a USB stick, with a small screen to show you what coins are stored on it. You can only get the screen to display the Nano’s contents by inputting a 4-digit PIN with each use.
Paper Wallets for BTC
A paper wallet is, perhaps, the most secure way to store cryptocurrency in the world, with a couple of obvious downsides. Basically, a paper wallet is just a piece of paper that has your Bitcoin’s private key printed on it. You could create any digital Bitcoin wallet, input this private key, and your Bitcoin would pop up within that wallet.
Single and Multi-currency Wallet
Some Bitcoin wallets store only Bitcoins (like the Bitcoin Core wallet, for example). Others store BTC and a ton of altcoins as well, like EOS, Tron, Ripple, and Monero. People with lots of cryptocurrencies tend to prefer multicurrency wallets, because they can store all of their coins in a single program, without having to bounce back and forth between tons of single wallets.
Single wallets still have their use, though. Some people break their coins up into multiple wallets to ensure that, if someone steals coins from one, they won’t get the whole portfolio. Other people use single wallets as spending wallets – a quick way to make transfers on the go, without making every cryptocurrency you own vulnerable.
Are there any alternatives to having a BTC wallet?
The only way to interact with your coins is to use one a wallet. However, there are companies like eToro which allow users to invest in BTC by using CFDs (contracts for difference), which doesn’t involve the transfer and storage of any Bitcoin whatsoever. It’s the only real investment alternative to Bitcoin wallets we can think of, but it won’t be of any use to someone who wants to be able to spend their Bitcoin.
Best Bitcoin wallets list: our choices (2019)
Phone Wallets for BTC
Even though you’ll be able access your Bitcoins from your home computer and shop from there, one of Bitcoin’s main advantages is precisely its mobility. If you have a smartphone, you can take your money everywhere and check your wallet at any time. You can receive money and use it anywhere, paying with your phone is very easy.
Other applications such as Xapo, Airbitz, Mycelium are also very safe and easy to use.
Software Wallets (BTC)
These applications are installed on your laptop or desktop, and with them you’ll be able to access your Bitcoins and are generally designed for people who won’t use them on a daily basis, and who want their bitcoins to be stored in a safe place or just use them for buying and selling, as an investment. All the applications below work with Mac OS X, Windows and Linux:
Multi-currency wallets compatible with BTC
Most wallets will hold bitcoin nowadays. Due to its size and growth, most wallets that offer multiple coins do let you store bitcoins on them. The wallets that allow you to store many coins are becoming more and more popular. If you hold a portfolio of coins, one of the bitcoin wallets below might be your best choice.
These are truly universal, you can use them with any portable or desktop device and they’ll work on any operating system:
This is an open-source wallet, with multi-signature HD that comes from BitPay. It allows you to share access with several users or handle multiple wallets without jeopardizing your security, and it’s completely translated into English. You can use it with iOS, Android, Windows Phone, Chrome, Mac OS X, Windows or Linux.
Hardware or physical wallets
These are mini computers that you can use offline, to store and manage your private passwords or pay with your Bitcoins offline, which means increasing your security to the maximum. Therefore once you’ve stored your passwords in the hardware, you’ll be able to sign for Bitcoin transactions without being connected to the internet. The downside of these gadgets is their price, several models cost about $100.
TREZOR is the ultimate hardware wallet for storing BTC and other altcoins. If you don’t feel safe with your computer or internet connection and want to keep your Bitcoins safe, Trezor offers you the option of saving your private passwords and making all kinds of transactions offline.
You can use it in Windows, OS X or Linux, and it’s compatible with several wallets, such as MultiBit HD, Electrum or Copay. Trezor can be integrated with other wallets such as Mycellium as well as Android devices. Trezor used to work with a Chrome extension as well but Google has discontinued this support. This hard-wallet is, however, pricier than any other in the market.
Ledger Nano S
This is the biggest competitor of TREZOR. The Ledger Nano S is currently the standard of hard wallet security. The Nano S supports an ever-growing variety of cryptocurrencies and provides an elegant solution to interact with your coins more securely. All transfers must be confirmed on the device itself.
You choose a PIN while setting it up after which you will receive a 24-word seed to be used to generate your BTC private keys. Be sure to write down the 24-word seed and store it securely just in case you lose your hard-wallet. You can also integrate it with wallets such as Mycellium, CoPay of MyEtherWallet.
Passwords can be eliminated for Nano S sign-ins (so convenient). What’s more, if your Ledger Nano S gets smashed with a hammer, you can just get another one, input the code they gave you with the original one, and your entire portfolio is there once more in all its glory.
There pretty much isn’t a way to use Bitcoin without using a BTC wallet. Digital Bitcoin wallets are one of the new ideas that people must figure out if they’re entering crypto for the first time, but once you’ve used them they’re quite intuitive. Make sure to learn how different kinds of wallets can meet different needs, provide different levels of security, and give you advantages compared to other storage options. We think the information you’ve read here today should give you a great start.
Bitcoin Wallet FAQ’s
Featured image source: Flickr