As the first cryptocurrency developed, bitcoin remains the most popular for buying and exchanging. It’s now become one of the easiest cryptocurrencies to purchase online, with most exchange platforms selling bitcoin. Below is is a guide to all options when it comes to bitcoin wallets
Before you purchase bitcoin, you need somewhere to store them, which is known as a wallet. A wallet doesn’t technically hold the bitcoin, rather the private key used to gain access to the address of the bitcoins.
A good wallet allows for bitcoins to be accessed with greater speed and efficiency, making them very convenient for buying, selling and trading with bitcoin. In fact, bitcoin investors have a selection of wallets to store their coins, as there are many types available that offer their own advantages.
Let’s take a closer look what type bitcoin wallets are available for storing bitcoin:
- Web Wallets
- Desktop Wallets
- Hardware Wallets
Bitcoin Web Wallets
Known as online wallets, this type of wallet is a great option for beginners looking to store their bitcoins. Web wallets are known for their usability, allowing you to access your wallet from virtually any device with an internet connection.
This makes buying, selling, and exchanging bitcoins quick and easy for the most part. Furthermore, most online wallets are completely free to use, so they are certainly suitable for first-time bitcoin buyers
Another positive about web wallets is that many are combined with online exchanges. This means you can buy and store your bitcoin from a single website, such as Coinbase, making them very convenient.
The main disadvantage of this type of wallet is the type of security, with your bitcoin private key being stored on a cloud network. As a result, you must rely on the security measures of that particular website, which isn’t always a guarantee.
In fact, these websites are at risk from hacks and malware, while some may even such down while your bitcoin is still stored there. These are unlikely to occur mind you, but the risk is always there and may not be worth taking.
Best Bitcoin Web Wallets for Storing Bitcoin
The world’s leading cryptocurrency exchange platform also offers web wallets, making Coinbase one of the best options for storing your bitcoins online.
You can use the site to buy bitcoins using real money, after which they are stored online where you are free to use them to buy other cryptocurrencies on Coinbase’s extensive marketplace.
The wallet system on Blockchain is simple to use so a fine choice for beginners, while two-factor authentication ensures robust security measures are in place.
It also allows for conversion of currencies using ShapeShift trading feature, and you don’t need to provide identification to use the site, allowing for complete anonymity.
Bitcoin Desktop Wallets
Also known as a software or offline wallet, this type of wallet is installed onto your computer and used to store and access bitcoins. You benefit from having a secure location to store your private key, which is the most important info you need when storing bitcoins and other cryptocurrencies.
Better still, software wallets are mostly free and relatively straight-forward to use. Simply visit the website of the wallet provider to download the software, follow installation instructions, and use the bitcoin address provided with the wallet to store your bitcoins.
The main drawback from these types of wallets is that they are susceptible to hacks and malware, as your computer will be connected to the internet. Should your computer be hacked, the hacker may gain access to your wallet and private keys, meaning they get your bitcoin.
Similarly, if your computer where to be stolen or become corrupted, you will lose access to your private keys if you haven’t stored them somewhere else.
Best Desktop Wallets for Storing Bitcoin
While the interface is lacking in aesthetics, Electrum remains a robust, effective wallet that is secure enough to keep bitcoins well protected. It also has offline options for increased security.
A well-rounded offline wallet, Exodus supports a range of cryptocurrencies beyond bitcoin, including Ethereum and Litecoin to name a few.
Exodus is also free to use, and has a range of great features, including inter-trading various types of cryptocurrencies, live updates, charts, and trackers for top currencies.
Another great software wallet, Jaxx allows users to store a wide range of popular cryptocurrencies, making it a fine choice for buying and exchanging different currencies from a single wallet.
Bitcoin Hardware Wallets
When it comes to security and privacy, hardware wallets are unrivalled. This is physical device used to store bitcoins and other currencies, and the security measures have made it popular for investors with large amounts if bitcoin that need storing.
Because any private key stored in a hardware wallet cannot be accessed using the internet, it’s known as a type of cold storage. This means your bitcoins would be free from hacks and malware attacks, as nobody but you can access it.
Beyond the hardware being stolen, it’s virtually impossible for your bitcoins to be stolen from a hardware wallet. In most instances, the hardware is an external hard drive such as a USB stick with an appropriate software wallet.
You can purchase a dedicated hardware wallet that is specifically designed to store only cryptocurrencies. Ledger Nano S is a prime example of this, and it’s a great choice for people seeking the most secure storage possible for their bitcoins.
A hardware wallet will need a physical storage space to keep it safe and secure. Many opt to store it in a safe for the ultimate security, which may be a good option if you have a large amount of bitcoin to store.
They plug into a computer when you want to deposit bitcoins and trade for other currencies, making transferring funds simple enough using this type of wallet.
The Best Bitcoin Hardware Wallets
Ledger Nano S
Compatible with bitcoin, Ethereum, and a range of Ethereum-based coins, Ledger Nano S is one of the strongest, most secure hardware wallets available.
A small USB drive that costs around $80, it has features such as pin-code access and two-factor authentication, making it one of the most secure bitcoin wallets you can buy to store bitcoin.
One of the first hardware wallets on the market, Trezor isn’t the most innovative wallet now available, yet remains very reliable. It’s still one of the most secure hardware wallets on the market, so is certainly worth investing in if you want the upmost security for your bitcoins.
External Hard Drive
If you have access to an external hard drive, then you can create your own hardware wallet. This is a popular option for storing and trading with various cryptocurrencies, as you have the option to install various types of software wallets on a single device.