Bitcoin which is the dominant cryptocurrency today is acquired and stored differently from traditional currencies. Because the currency does not exist in physical shape or form, a private key is needed in order to enable the owner to access it. A combination of the recipient’s public key and a private key of the sender is required in order to complete a Bitcoin transaction. In this article, we are going to look at the best Bitcoin wallets in the market. However, let us first look at the basics of a Bitcoin wallet.
What is a Bitcoin wallet?
A Bitcoin wallet can be said to be a program designed to facilitate the sending and receiving of Bitcoins. The wallet interacts with the crypto’s ledger (Blockchain) which is publicly available and which is not controlled from a central place. A Bitcoin wallet can be designed to be compatible with a PC, a mobile phone or it can be a stand-alone piece of hardware.
For a better understanding, one can say that a Bitcoin wallet works similarly to an email. You can send and receive emails using your Gmail, Yahoo or Outlook email address. Similarly, Bitcoin requires a unique personal address just like it is the case with emails. You can share your Bitcoin address with anyone just like you can with your email address. Unlike your email address where you have the power to create your own password, in Bitcoin address, the password is randomly created. This password is called your private key and should never be shared with anyone. Anyone with access to your private keys has control of your Bitcoins.
What factors should you consider when choosing a Bitcoin wallet
A Bitcoin wallet can be used for several purposes and this means that different wallets have different features to suit the needs of the many people who want to own such a wallet. Wallets often vary based on security and convenience. You will, therefore, need to ask yourself several questions regarding your needs as compared to what a wallet can deliver. Some of the questions are;
- How often will I be using the wallet?
- How many Bitcoins will I be keeping in the wallet?
- Can I afford to pay for a wallet?
- Do I want privacy or convenience?
It is the answers you give to the above questions that you will enable you to pick the perfect Bitcoin wallet. For this reason, let us look at the types of wallets that you can opt for.
Types of Bitcoin wallets
- Cold storage – They are the most secure type of wallets and they do not need an internet connection. They include Hardware and paper wallets. The main advantage is that they can’t be hacked remotely.
- Hot wallets – This is a type of wallet that is connected in some way to the internet. Wallets under this category include mobile wallets, desktop wallets, and web wallets.
- Multisig wallets – Multi signature wallet refers to a type of wallet that requires the approval of enough signatures from a given set of signatures in order to send Bitcoins. It is more like a bank account where any two out of three people can sign in order to withdraw money.
- Brain wallets – These are the wallets that are created using a predetermined set of words.
- Simplified Payment Verified (SPV) wallets – These wallets don’t have a complete copy of the blockchain. An SPV wallet is connected to the full nodes so as to enable it to validate transactions.
An analysis of the best Bitcoin wallets
Ledger Nano S (hardware wallet)
The Ledger Nano S wallet is small and compact. It comes with a metal casing which makes it more durable than some of the competitors’ wallets. The wallet is easy to carry and you could even put together with your keys and no one will suspect it is a BTC wallet.
Ledger Nano S Bitcoin wallet works pretty very much like any other hardware wallet. When you set it up, you will be required to choose a PIN which will protect the device from unwanted access. You will then receive a 24-word seed that should be used to create your private key. This wallet has two buttons which are used to control it.
- The initial set up time is 3 minutes. Most of the time is spent writing down your code
- It is compact and durable
- Handles multiple currencies
- It is extensible with other apps
- Comes with a cool small OLED screen
- It is pricey compared to many wallets but it is cheaper than Ledger Blue which is $99
Keepkey (hardware wallet)
Keepkey is a relatively new wallet in the market. It is sleek and has a unique design. According to the official website of the app, the Bitcoin wallet software will take over the management of your computer and private key generation and also transaction signing. The private key is stored on your Keepkey and never leaves the device. The app’s display gives clarity to each BTC leaving the device.
- It is user-friendly to the beginners
- Has a sleek and unique design
- It is simple to use
- Offers you bank-grade security that is simple
- Supports multiple currencies
- It works perfectly on Mac, Linux, Android, and PC
- The price of $99 is considered by many to be very high
- It is relatively new
Trezor (hardware wallet)
This Bitcoin wallet was the first of its kind having been released in 2014 by a company called SatoshiLabs which is based in the Czech Republic. Trezor is the ideal wallet where you can store large amounts of BTCs. The wallet is highly secure and flexible to the web. It is the preferred wallet for both beginners and experts. Tit supports multiple currencies (over 500).
- It is considered by many to be the safest crypto wallet.
- Your private key is always kept offline making it impossible for hackers to access it
- Trezor comes with a backup paraphrase which you should write down. This feature makes it almost impossible to hack Trezor.
- Easy to use and comes with an intuitive interface
- At $99, the price of the wallet is quite high
- You will always need to plug in your wallet and enter your PIN whenever you want to access your address. This makes it a bit tedious.
Exodus (desktop wallet)
This wallet was launched in mid-2016. Besides Bitcoin, Exodus wallet will allow you to store altcoins such as Dash, Ether, Litecoin, and dogecoins. This wallet is under the ‘Hot wallets’ and is only compatible with the desktop for now.
- The wallet is easy to use hence can be ideal for a beginner
- It allows trading of cryptos from within the wallet’s interface
- The support given to clients is above average
- It is relatively new in the market
- It can only be used on a desktop
Electrum (desktop wallet)
This is a lightweight desktop app which is preferred by most people who are using older computers and less powerful for the purposes of Bitcoin storage. The app is fast and the most parts of the wallet which are processor intensive are handled by remote servers. The app is loved mainly because it affords its users advanced privacy and security features. It is also well regarded because it enables the user to recover their wallet with a secret passphrase.
- It is fast and lightweight even though many of the apps are processor intensive
- It is not user-friendly for beginners
- Relies on external servers which could easily present a security threat.
Mycelium (mobile wallet)
Mycelium is definitely one of the most popular mobile Bitcoin wallets today. It comes with a plethora of features covering security, privacy, and ease of use. It boasts of being a safe and fast app even though it is a bit complicated for a beginner. The developers of the app keep on upgrading it since it is an open-source app. Being a mobile app, it fits in the hot wallet category. However, there are some cold storage features included in the app and which help any Bitcoin user looking to put their wealth on ice.
Pros of Mycelium
- It comes with advanced security features
- Very fast app
- Great privacy features. Ideal if you value your anonymity
- It doesn’t come with a web or a desktop interface. You can only use your smartphone
- Only ideal for the advanced and experienced users
Jaxx (mobile wallet)
Jaxx is another wallet which is designed to be used on smartphones. It was created in 2014 by Ethereum co-founder Anthony Di Iorio. The company has launched a new version of the app called Jaxx Liberty or Liberty 2.0. The app allows you to store and also exchange cryptocurrencies from within the wallet. Unlike some wallets, Jaxx is self-hosted which means no third parties are involved in generating your private key.
- It very easy to use
- It is intuitive and allows you to trade from within the interface
- The support team is very responsive and professional
- It works on 8 different platforms
- Linux users have reported some issues with the functionality of the wallet
- Relatively new