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 can spend on purchases, transfer to other users, receive or exchange for dollars.
There are wallets for any operating system and device, you only have to access its creators page and download the application or do it from the App Store or Google Play.
- 1 How does a wallet work?
- 2 Steps to create a Bitcoin wallet
- 3 When you want to pay for your purchases
- 4 Phone Wallets
- 5 Computer Wallets
- 6 Web wallets by browser
- 7 Universal Wallets
- 8 Hardware or physical wallets
- 9 Having a paper Bitcoin wallet
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 them backup, 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.
Steps to create a Bitcoin wallet
I’d like to mention, that in addition to the wallets that we can install on mobile or desktop devices, there are others such as physical or hardware, and paper or offline. But the most used ones are those that work on computers, tablets or smartphones, so let’s see an example:
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Here, I’ll tell you how to install Coinbase, which is completely free and one of the best applications I’ve ever used.
You can use this wallet from your web browser or download the mobile wallet application and install it on your Smartphone or tablet, be it Android or iOS. To do this, you only need to sign up and open an account, as in any other service they’ll ask you to enter your email, and to follow the steps by filling the fields with your personal information.
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- Think about a strong password, don’t use something simple that you’re already using for your email account or other service.
- Write down your password, as there’s no way to retrieve it.
Create different addresses so that others can send you money while maintaining a greater anonymity.
- As soon as you can buy or send Bitcoins, start by trying with some Satoshis.
When you want to pay for your purchases
Its even easier than paying with your credit or debit card, since you only need to enter the recipient’s address and the amount you want to send them. Most wallets also offer the option of generating a QR code which the other person can scan, or you can even connect both terminals and do the translation through NFC.
Even though you can 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.
Any device that works with Google’s operating system has a very good Bitcoin wallet version, but here I’ll only mention the top three:
Bitcoin Wallet – Coinbase
It’s completely translated into English and is very intuitive. Your wallet is always with you and from there you can see your balance, shop, accept payments or sell Bitcoins.
If you want to avoid high commissions when buying or selling Bitcoins, it’s better to work with bank transfers or transfer them from one wallet to another, because for credit card or PayPal transactions you’ll be charged a commission of up to 3.99%. It’s easy to change your Bitcoins to Dollars, which is advisable if you want to keep them in your wallet and avoid those dreaded drops.
This App has more than 33,240 reviews on Google Play, it’s one of the most popular ones in the United States and has a score of 4.5 out of 5.
This is one of the safest and lightest applications out there, it allows you to make payments using QR codes, NFC, Bluetooth or Bitcoin URLs. It’s a completely P2P wallet, with which you don’t need to register on any website.
If you want to adjust your commissions rate, you can choose between economic, normal and highest priority. This wallet is recommended by bitcoin.org and BitPay, and has more than 13,693 reviews on Google Play with a rating of 4,out of 5.
blockchain.info is one of the most visited pages to check realtime Bitcoin prices, and it’s evident why. It also has its own wallet application, a very safe and fast app that can be defined as a hybrid wallet, since your wallet is encrypted and stored in the cloud, but the decryption is in your browser.
As with other applications, you’ll be able to backup it whenever you want, you can receive money at your address or pay for purchases instantly, but you can also change your Bitcoins into up to 20 different currencies. With more than 10,392 reviews on Google Play, and 11 million wallets created, it’s one of the most recommended and used applications to store and use your Bitcoins.
Other applications such as Xapo, Airbitz, Mycelium are also very safe and easy to use.
Wallets for iOS
If you have an iPhone, iPad or even an Apple Watch, you’ll also find several options from where to choose the best wallet. I’ll especially talk about the safest one, and also the most intuitive and simplest to use:
Many users think that this is the best wallet for iPhone or Apple Watch. With it you’ll get a light, independent, easy-to-use, open source wallet that uses SPV to verify the veracity of the transactions and which is also compatible with fingerprint identification, Touch ID.
It’s an ideal wallet for shopping, allows you to spend without having to wait for the transactions to be confirmed.
It has iPhone, iPad or Mac versions. It’s very easy to use and as soon as you get a bit of practice, you’ll notice a few differences with other traditional online banking applications, everything that has to do with your account’s security happens inadvertently, and it becomes an application to buy, transfer or receive money quickly and easily.
It’s immune to phishing attacks or to the system itself. All the information is sent encrypted and also uses 2FA two factor authentication solutions, ensuring that only you get access.
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 shown below work in Mac OS X, Windows and Linux:
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This is the original wallet, a wallet designed by Satoshi Nakamoto himself and which is continuously reviewed and improved by Bitcoin’s developers team, another point in its favor is the fact that it’s a complete node of the Bitcoin network itself routed through Tor, something that gives us more privacy, but which in turn takes up more space on the computer and slows it down.
If you want to join the Bitcoin network and help with transaction verification, this is your App.
It’s one of the safest options out there, and can be a bit more complicated than other applications, but if you want extra security, this is it. It’s one of the apps that offers you more of what you need in the day to day, and if you still have doubts about security or want to hold your savings for some time, you’ll also find options that allow you to freeze or disconnect your storage.
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Web wallets by browser
Many of the wallets I’ve talked about have a web version, and from it you’ll be able to make any type of transaction you want. From shopping, selling and buying Bitcoins to making transfers.
Coinbase, Bitcoin Wallet, Blockchain or Xapo, are great examples of online wallets, which you can also use on their mobile versions. The good thing about a web wallet is that it doesn’t take up space on your computer and if you have Internet you’ll be able to access it from anywhere in the world. The downside is that your information will be stored on the network which means less control.
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 you 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 negative aspect of these gadgets is their price, several models cost about $100.
This would be the ultimate hardware wallet. 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.
Having a paper Bitcoin wallet
The Bitcoin system and the cryptography on which it is based is very safe, but in matters of security, usually the weakest link is precisely us and how much interest we give to our computers and mobile phones’ security.
Therefore, an offline generated paper wallet, is like having a practically 100% safe anti-theft insurance, which will protect us from being attacked by viruses, malware or keylogger. Once the paper wallet is generated and printed, we’ll have our Bitcoin address and associated private passwords on a sheet, expressed in two QR codes.