The easy way for choosing best Bitcoin wallet
Last Updated: 06 June 2018
How about the sad Bitcoin stories on social media channels like Reddit and Facebook catching everyone’s attention? Ye, I’m referring to the those folks are have had experience with losing their bitcoin due to wallet hacks and desktop trojans watching for your passphrases. A secure source for storing bitcoin as well as other cryptocurrency is always in great demand. I would advise doing a thorough research before choosing your next crypto wallet. Choosing the right wallet is an essential part in securing your bitcoin and altcoin portfolio. The conventional and the most convenient wallets that lack safety features usually are web-based. Nevertheless, I will take you through step that I think are useful for choosing the best Bitcoin wallet. It is important to note, if the private key to your Bitcoin address gets compromised, the likelihood of your coin taking a travel to another wallet that doesn’t belong to you is mountain high. Storing private keys in non digital form, will completely remove the risks of the cryptocurrency being stolen through the web.
The table below assures an accurate comparison between the cons and pros of each wallet:
|Hardware||very safe||moderate||moderate||50 - 500 usd|
Web wallets present access via http or (HyperText Transfer Protocol). The data including cryptocurrency addresses and private keys are being stored on remote server and could be accessed by visiting the web address. Web wallets are considered the least secured option, because your sensitive data is being stored on 3rd party server that can be compromised by hackers or even the web wallet operators. I’d recommend keeping pocket change equivalent cryptocurrency on the web wallet, while the big guns should be kept in a safer off line place.
Some of the best web-wallets are presented below:
- Check out the best sites to buy bitcoin. Each one offers a free online web wallets. Please keep in mind that these are custodial wallets, whereas the exchange owners have access to private keys for your Bitcoin addresses.
- Blockchain.info – offers a very simple and user friendly interface. Identity verification is not required.
- Greenaddress – These are the synced type of wallets that can operate across most devices.
- Coinbase An insured type of web wallet - it is among the popular web based wallets. The wallet doesn’t charge any fees for sending BTC to other Coinbase users.
- Coinbase vault storage – offers an extra layer of security by providing multisig option with redundancy in case of intrusion, data loss or total failure.
The Mobile Wallets
As simple as it may sounds, its a crypto wallet application on your mobile device. What make the mobile wallets stand out, is the ability to scan the QR codes with phone’s camera for speedy payments to your friends or merchants. Mobile wallets should be considered just as unsafe as web-wallets in terms of security. If your phone is lost or stolen, the data and your bitcoin goes with it. Thus, mobile apps are prone to hacking, especially android based smartphones. I typically compare mobile wallets to pocket pockets, where you can only fit a limited amount of paper currency.
Some of the top mobile wallets to consider for iOS & Android:
- Breadwallet – simplified wallet for iPhone and Android
- Mycelium – An excellent HD wallet with a lot of features, as well as support for Ledger & Trezor the (hardware wallets), Tor (a privacy-focused mesh network) and of course the watching addresses.
- AirBitz – Relatively easy to operate & excellent choice for non techie users.
- GreenBits – A very basic type of wallet. Support for Ledger + Trezor is available.
Best Desktop Wallets
The desktop wallets are the executable programs that are first downloaded and later installed on your desktop. According to some 3rd party data collection sources, most users tend to store coin on their desktop wallets, due to lower security concerns when compared to web or mobile based wallets. In reality, desktop wallet’s security cam be as easily compromised. There are millions of different trojans circulating the web these days. When the bitcoin started gaining global demand, the attention from the trojan development society came unnoticed. If you’re not careful about visiting unknown web links, the likelihood of getting injected with a trojan virus that can be capable of stealing the Bitcoin from the desktop wallet is relatively moderate. My word of advice, never click on any unknown links that your friends send you :).
Here are the most secure desktop wallets:
- Electrum – one of the most popular desktop wallets. Users friendly interface, fewer menus and options for easy navigation. Seed answers are stored independent of the program files. Can be easily integrated with Trezor wallets.
- Exodus – Extremely simple to operate, comes with an in-built instant exchange allows swapping between major altcoins. This wallet has gained a lot of publicity in 2017.
- Armory – One of the most secure desktop wallets made for advanced users. The offline signing options, brings an extra layer of security. Please note: the wallet requires BitcoinCore to operate. Bitcoin Core is know to be the original Bitcoin desktop wallet, however, one of its primary disadvantages: is the fact that it has to download the entire blockchain file system consisting of 100GB + part.
Popular Hardware Wallets
Most hardware wallets carry a high degree of sophistication. These considered a semi-cold type of offline wallet service providers. A form of hardware is being used to store the private keys to your bitcoins. The outgoing Bitcoin transactions are performed by connecting the hardware wallet to your PC or a MAC. The developers of the hardware wallet would normally release a software providing a user friendly interface for easily transfer coin to and from your hardware wallet. Most hardware wallets can be purchased for under $100. Despite immunity from the various web based trojans and web wallet operators, hardware wallets still carry a certain degree of risk. Manufacture may one day turn to the dark site and release a software update, injecting it with a virus capable of stealing your coin.
These are the most popular hardware wallets:
- Ledger Nano – This is the most popular hardware wallet on the market today.
- Trezor – simple, yet secure. May be priced a bit higher in comparison to Nano. Please note: many wallet experts suggest that these hardware wallets are not necessarily as cold as one would think. Definition of cold wallet: a type of wallet that operates offline, without any USB connectivity requirements.
Paper wallets are considered the most secure cold storage solutions available today. The only security issue that I can see arising from exploitation of paper wallet is a software company going dark or physical misplacement of the paper wallet. The security of a coin may lose a dose of importance when inconvenience steps in. It gets really annoying having to create a new paper wallet every single time you want to transfer Bitcoin. For holding long term purposes, this might be the best solution there is available today.
Some of the most trustworthy paper wallet available today:
- Coindesk - please follow this guide for easily making a paper wallet
- Bitaddress – An easy wallet generator. It’s open source script, developed with JS.
Please note: I do not recommend paper wallets to newbies. The paper approach may see safe and sound at first glance, however there is certain degree of difficulty that comes with properly creating one.
Many bitcoin wallets require a single private signature key for making outgoing transfers. However, a multi-signature wallet would require several private signatures key to make the same outgoing transfer. For instance, when sending Bitcoin to a friend, a transaction would need to be signed before a Bitcoin could leave your wallet. If a group of hackers compromised the security of your multisig web wallet and decided to steal your Bitcoin, the chance of succeeding would be zero, since a second signature would be required to complete the transaction. The second signature is usually kept on your web server or your desktop wallet software. This type of advanced technology delivers extra layer of security and a piece of mind. Multi-signature option are available in smartphone, desktop, web and hardware wallets.
Some of the best wallets for multi-signing:
- Block.io, Carbon Wallet, Coinbase (web-wallets)
- Copay, Blocktrail, CoinKite, GreenAddress (mobile wallets)
- Armoury or Electrum (desktop wallets)
Hot vs Cold Wallets
The popular terms like “hot” & “cold” are widely used to accurately describe the online connectivity of a cryptocurrency wallet and the its risk factor associated with security. Below I’ve described is the difference between the two:
A hot wallet is one that is always connected to the internet. The private keys are kept in the same place where your Bitcoin keys is being held. A result, a hot wallet carries the highest degree of risk, because if the server where the bitcoin keys are being stored gets compromised, your coin takes an unscheduled trip. The only benefit of the hot wallet is convenience, since you can literally make a payment or forward a coin to a friend within seconds.
Additionally, a cold wallet isn’t connected to the internet and its private keys are stored offline.Cold wallets are also known as “offline wallets”. The type of offline wallets supersedes the online wallets in terms of security issues connected with private keys interception. When it comes to cold wallets, the private keys to your coin are essentially unreachable from the web attackers.Many wallets carry an advanced functionality that allows transactions to be signed offline & broadcasted to the bitcoin network.
The popular term “warm wallet” is mentioned by some of the experts especially when describing cold wallets that are required to be connected to the internet for transactions making purposes. Any warm wallet can be interpreted as combination of cold and hot wallets.