Bitcoin is now trading for close to $15,000 a unit. Some analysts and enthusiasts like antivirus guru John McAfee predict it’s value will hit $1 million by 2020. With such prospects and obviously a lot at stake, you simply don’t want to lose your bitcoins.
While the underlying blockchain technology that powers the bitcoin cryptocurrency is unhackable (at least for now), you could still lose your bitcoins through online exchanges where most users store them. Reality check; millions of dollars worth of bitcoin have been lost in the last two months alone after cryptocurrency exchanges were hacked. Secure bitcoin wallets are a must!
Of course if you have been following cryptocurrencies for a while you will know the case of Mt. Gox, the popular Japanese exchange that lost a massive 850,000 bitcoins in 2014 after attackers infiltrated its security. That would be worth an astounding $12.75 billion by current prices! At the time Mt. Gox was handling over 70% of bitcoin transactions worldwide.
A number of other exchanges including YouBit and NiceHash, the bitcoin mining marketplace have also lost varying amounts of bitcoin in recent attacks.
If you own some bitcoins or planning to invest, here are some of the best bitcoin wallets in 2018.
Just in case you don’t know, bitcoin wallets are where bitcoins live, more or less the same way you keep your cash in your wallet or in your bank.
Keeping your bitcoins in an online exchange like Coinbase is an equivalent of keeping your money in a bank. You trust it will not bolt away with your money and that it has put in place solid security measures to safeguard it.
Obviously, it’s not straight and simple as that. Cryptocurrency wallets and exchanges are largely unregulated and customers are left with no recourse if money is lost.
Let’s start the countdown. The 5 best bitcoin wallets:
Bitcoin Wallet 1 – Coinbase Wallet
For the reasons outlined above, we do not highly recommend online wallets. Coinbase is the most popular cryptocurrency exchange but it also doubles up as a bitcoin online wallet where you can store bitcoin and a couple of other cryptocurrencies. Having your bitcoin wallet online is inevitable. At one point or the other, you need it to buy, sell or exchange bitcoins or other digital currencies.
With online wallets like Coinbase’s, you do not have complete control over your assets with some keys being held by the exchange. And of course, your bitcoins could just disappear overnight if there is a successful attack.
Nevertheless, new security measures like the two-factor authentication implemented by Coinbase makes its one of the most secure online wallet out there. On top of this, Coinbase has also introduced the ‘Vault,’ a storage option which puts your bitcoins completely under your control.
Coinbase has a strong track record when it comes to security with no reported breach so far. It is arguably the best digital wallet available. Obviously, it has learned a lot from its peers like Mt. Gox which went down in dramatic fashion.
On top of that, Coinbase has a very intuitive user interface that is friendly to new users. Of course there is the added flexibility if you want to trade, buy, sell and exchange bitcoin. The simple interface also makes it the best bitcoin wallet for beginners.
Bitcoin Wallet 2 – Trezor
If you own a huge stash of bitcoins, then a hard bitcoin wallet is the safest bet for you. Trezor is one such provider. Hard wallets are physical drives where you can keep your bitcoin keys without the need for third party providers like Coinbase. Cold storage wallets like Trezor keep bitcoins out of cybersecurity risk.
Trezor was developed by SatoshiLabs, a Czech company and will set you back $100. This is just about the only downside to bitcoin wallet hardwares – the fact that you have to buy the relatively costly USB stick. With this device, you can sign off transactions even through a compromised computer. Hackers cannot simply get through the extra layer of authentication in place.
It has a numerical keypad which displays randomly making it extremely difficult for random keyloggers to get in.
There is even an randomly generated 24-word seed which you can use to retrieve your wallet just in case you lose the device.
Transactions are quite fast and require only a few clicks. It is however not recommended for small everyday transactions.
Bitcoin Wallet 3 – Bitcoin.info
This is another online wallet boasting of 100 million transactions and over 15 million wallets. Well, it takes a lot of investment in innovation and security to achieve such high volumes.
In fact Bitcoin.info has withstood the storm that swept Mt. Gox in 2014 and shook bitfinex in 2016. Of course this online wallet is still vulnerable to attacks but not as much as cryptocurrency exchanges.
In fact this is where long running bitcoin enthusiasts keep their bitcoins.
Bitcoin Wallet 4 – Electrum
This is a free desktop storage app with a solid reputation. It has been around since 2011 and therefore one of the oldest around. Android users can get Electrum bitcoin wallet download on Play Store install it on their devices although it is not available for iPhone users.
With Electrum, you get complete control of your private key which is just awesome. Not many online wallets allow total control over your private keys. Your only worry should be how to keep your keys truly private. The two-factor authentication adds another layer of security for your digital assets.
Electrum also supports cold storage and hardware wallets.
Bitcoin Wallet 5 – Ledger
Ledger is another hardware bitcoin wallet much like Trezor. It keeps your bitcoins offline away from hacks.
You can only make a transaction with the physical device actually connected to a computer. There are a number of products including the Nano S, the most popular of its range. Ledger unplugged on the other hand is a contactless bitcoin wallet among its product range.
This is strongest cold storage option available for your bitcoins. A paper wallet is simply a piece of paper with all the information for generating bitcoin private keys. Basically, it is physical back up for your keys.
In most cases, it contains a QR code which converts it to a software wallet when scanned. Using this storage methods means you are keeping your bitcoin wallet offline, away from prowling hackers.
People who are not tech savvy may however find this option a bit difficult. A little patience should however get the job.
It is important to keep the bitcoin paper wallet in a safe and secure place as it contains all the information about generating your private keys.
When it comes to bitcoin paper wallets, you need to trust only yourself. If you just cant bear the thought of losing your bitcoins, then this is the best cryptocurrency wallet just for you. It’s worth bearing in mind that hardware wallets and cold storage options are less practical if you are constantly making transactions or actively exchanging your bitcoins.