How to choose the right bitcoin wallet

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Choosing a Bitcoin wallet is no longer just a matter of choosing security or simplicity. Using different wallets for different purposes is becoming common, as is the use of different accounts when dealing with fiat currencies. A few years ago, several main types of wallets emerged, and new developments continue to appear. Therefore, the choice of a wallet for those who have just started acquaintance with cryptocurrency is only getting more complicated. Here we will try to conduct a brief classification of wallets by their purpose.

Bitcoin banks

Users will find the maximum level of convenience in so-called "bitcoin banks" such as Coinbase and Xapo, which store your coins, including private keys. It is in the "banks" that you can get the fastest access to operations for buying, selling and spending your bitcoins. However, since you have no control over your private keys, you essentially only own the bitcoins in a "bank account", entrusting their storage and security to the wallet operator. That is why you should not consider this type of storage of your cryptocurrency as reliable and long-term.

Mobile and web wallets

Mobile or web wallets are very easy to get started and have many unique features that make them attractive to Bitcoin users. Blockchain wallet is one of the most popular cryptocurrency wallets in the world (more than 10 million installations), it became such thanks to its simple interface and high level of privacy. Wallets like Airbitz and good old Mycelium let you buy bitcoins right in the app. Airbitz also offers vendor discounts and has a built-in mobile recharge feature. There are many other similar wallets, such as Breadwallet, Copay, Jaxx, and Greenaddress - each with their own unique functionality. However, such wallets have a rather low level of protection. Although today many of them offer two-factor authentication and other degrees of protection, making them secure enough to use. Most experts still advise storing only such a volume of funds in them that it is not a pity to lose - for example, no more than $ 100, since wallet data can become the subject of hacker attacks.

High privacy wallets

For those who value privacy above all else, some wallets have added additional anonymity features to access bitcoins. For example, some support TOR, while others prefer coin mixing schemes like Coinjoin. Darkwallet was the first notorious attempt at a high-privacy wallet, but its development was halted due to its poor security. The Samourai wallet provides a high level of privacy and wide functionality. The most popular solution for users of the invisible network is the Electrum wallet, which has a large number of settings and offers convincing functionality in the field of anonymity, while storing data offline. Its only drawback in terms of security is that the blockchain is synchronized with the developer's servers, which means that the wallet remains in some dependence and requires trust in the developer.

Full wallets

Those who are active in the technical area of ​​the community who mine or manage nodes to support the network prefer one of the few "full wallets" for their needs. These wallets download a complete copy of the blockchain and act as peers to support the network. There are a limited number of versions of such wallets, such as Bitcoin Core or Bitcoin Knots. There are also "alternative" full wallets, such as Bitcoin Unlimited, which presents its take on how the Bitcoin protocol should function.

Hardware wallets

Hardware wallets such as Trezor, Keepkey, and Ledger Nano S provide convenient access to bitcoin with a high degree of security, since private keys are stored only in the wallet's memory. While these wallets can cost $ 60 or $ 100 to use, they allow transactions to be made in a way that hackers cannot reach. Wallets with this level of protection are ideal for receiving and storing bitcoins. Once the bitcoins are in the wallet, some of them can be transferred to any other place for permanent use, while the principal amount will be safely "hidden" in the hardware wallet.

High security wallets

For those who have large reserves of bitcoins, wallets were invented, which added more layers of protection by making them more difficult to work with. The first such wallet, Armory, is no longer permanently supported, but is still available for use. This user-friendly wallet offers several unique features, but requires downloading the entire blockchain. Using the Electrum wallet is one of the most popular ways to protect yourself from malware and hackers. For the maximum level of security, you must strictly follow all instructions in the wallet and use only the Tails boot disk to work with the wallet. Long-term storage without a wallet For long-term storage, many choose an original method that minimizes the risks of access to bitcoins by cybercriminals through the Internet - storing private keys from bitcoins in printed form. This form of the wallet is called "paper wallet". Exporting keys for printing can be done in Bitcoin Core and some other types of wallets. Also, you can create keys from scratch using web services. To create such a wallet, you need to trust a specific site or code that randomly generates the wallet, so this method of obtaining keys is less secure. Although, having a certain level of technical knowledge, it will be difficult to deceive. Bitaddress became one of the first and most popular wallets of this type, but there are others including the one supported by the Bitcoin.com platform. Do not forget that such a super-safe way of handling bitcoins is only suitable for long-term storage - in order to spend cryptocurrency, you will need to install or register a regular wallet. In addition, do not forget about risks such as fire or natural disasters. Store your "paper" bitcoins in a heat-resistant safe or in multiple copies in different places.

Details about bitcoins

Item Type Status
Name bitcoins
Started Operating 2020 · March · 10
Status UP
Escrow No
Multisig No
2FA No