Guide to Bitcoin Wallet- Top 6 options that you can consider

Bitcoin entered the trend since its appearance in 2009; The consensus network that allows new payment systems and digital money, Bitcoin is the first decentralized peer-to-peer payment network without central authority or intermediaries. Bitcoin like cash for the internet. There are several Bitcoin advantages and since the Bitcoin prices skyrocketed in 2017, people were crazy about investing in Bitcoin.

If you are also interested in owning some, it is important to understand first how you can store Bitcoin securely.

Bitcoin Wallet- the Definition

As per Investopedia,

“A Bitcoin wallet is a software program in which Bitcoins are stored.”

To understand it better, here are some key points:

A Bitcoin wallet is not a physical item
It is a type of software for holding and trading Bitcoins.
You will get a private key for security with a Bitcoin wallet. The key is the address of the wallet.
Bitcoin wallet mainly comes in four types: desktop, mobile, web, and hardware.

So, a Bitcoin wallet can be considered equal to a digital wallet, and it is important for someone who is trading in bitcoin to get a digital wallet. The wallet mainly holds the secure private key that is used to access Bitcoin addresses and perform transactions. Hence, the security of the private key is crucial to unlock your crypto wallet and spend or trade your cryptocurrency.

Types of Bitcoin Wallets

The first step in Bitcoin trading is having a program called Bitcoin Wallet I.e. Digital wallet because it cannot be stored in a physical wallet. Bitcoin is safe using public and private keys which is a string of numbers and letters that join the mathematical encryption algorithm.

Public Key:- is the location where the bitcoin transactions are deposited and stored and this key appears on the blockchain ledger in the form of the user’s digital signature.

Private Key:- is used to buy, sell, and trade bitcoins stored in the wallet. Try not to store bitcoins all in a single wallet. Try to diversify and keep all your bitcoins in different wallets for maximum safety and security.

Bitcoins are stored mainly in these two types of wallets, here they are:

Hot Storage Bitcoin Wallets

Hot Storage Bitcoin wallets are those connected to the internet such as through a phone app, a desktop program, or an online service, all for free. However, this type of bitcoin wallets possess security risk as they are managed online, hence are open to online theft.

Here are the 3 main types of Hot Storage Bitcoin Wallets:

1 Desktop Wallets

Desktop wallet is a kind of application installed on computer i.e. Desktop and used to store all your Cryptocurrency. The main advantage of using desktop wallets is to give you full control over your funds. There is a minimum risk that third parties can freeze or lose your funds. However, you must be very careful about security, therefore back up your wallet is important and also ensure that your device is free of malware. Desktop wallet is the address for users used to send and receive Bitcoin. You can also save a private key in your desktop wallet.

2. Mobile Wallets

The cellular wallet as the name suggests, is an application that will be used on your smartphone to save and control your Bitcoin funds. Although cellphone wallets are used on iOS and Android operating systems, they perform the same function similar to desktop wallets. These wallets can be used to make payments in physical stores through scanning “Touch-to-Pay” and Near-Field Communication (NFC) scan QR code. Before choosing a cellular wallet, beware of malware disguised as a Bitcoin wallet.

3. Web Wallets

Web wallets refer to a browser-based wallet that you can use both on mobile and desktop; Therefore they are easily accessible. However, you must be very careful when choosing a web wallet because it will also save your personal key online. The only drawback is not to offer full control unlike desktop or cellular wallets. Exchange like Bitcoin coinbase wallet allows users to have web-based wallets.

Cold Storage Bitcoin Wallets

Cold Storage wallets are often considered more secure than hot storage wallets as they store Bitcoins offline and don’t require them to connect to the internet; hence are safe from hackers.

However, this wallet is less convenient as it makes it harder for users to access their coins. Still, some Bitcoin owners use hot storage to keep tokens for regular spending while keeping the rest in cold storage wallets.

Here are some commonly used Cold Storage Bitcoin Wallets:

1. Paper Wallet

2. Hardware Wallets

The hardware wallet is another form of secured Bitcoin wallets as they store the coins on physical equipment that is connected to a computer through USB. Although they are known to be immune to virus attacks, Hardware wallets don’t come free, they can cost you anywhere between $100 to $200.

3. Sound Wallets

The sound wallet is not too popular, still, they are another way to keep your virtual currency tokens safe. They involve securing private keys in encrypted sound files in disks such as compact discs (CDS) and vinyl disks. There is a hidden code in this audio file, which must be described using the spectroscope application or high resolution spectroscope.

So it’s all about what kind of bitcoin wallet is available and how they work, now let’s move on to some of the best Bitcoin wallets.

Best Bitcoin Wallets to Consider

You might be clear by now that hot storage wallets are less secure but help to make transactions quickly while cold storage wallets are more secure to store Bitcoins for longer terms, so as per your preference and requirement, here are some of the top Bitcoin wallet suggestions for you:

1. Exodus

Suitable For: Beginners Type of Wallet: Hot Storage Cost: Free Compatible Hardware Wallet: Trezor

Pros	Cons
Vast variety of cryptocurrencies	Closed Source Software
Built-in exchange	—–
Good customer support	—–

Exodus is a desktop and mobile wallet with a very easy-to-use interface and even offers a built-in exchange. Its ability to swap between a growing number of cryptocurrencies (around 100 different cryptocurrencies) is one of its most popular features. So, if you are a beginner at Bitcoin trading, this wallet will help you get into the crypto space, undoubtedly one of the best crypto wallets.

However, advanced users may not find it appealing due to the fact that it is a closed source wallet, hence this can create some security concerns. The codes are not open for everyone to see; therefore the users can only trust the Exodus team to ensure that there is no risk to the security of their wallet.

2. Mycelium

Suitable For: Mobile Users Type of Wallet: Hot Storage Wallet Cost: Free Compatible Hardware Wallet: Trezor, Ledger and KeepKey

Pros	Cons
Transaction fees can be customized	Only for mobile users
Built-in exchange	Not beginner-friendly
Open source software	——
Supports Hardware Wallet	——

Mycelium is also one of the top cryptocurrency wallets but is mobile-only. This open-source Bitcoin wallet only supports Bitcoin, ETH, ERC-20 tokens, and FIO token. Compared to Electrum, one of the other top wallets, Mycelium is quite similar except it is mobile-only, but offers a better user interface than Electrum.

Mycelium, being one of the earlier wallets, has a built-in exchange; you can even set custom transaction fees so that you can decide the duration for a transaction to get complete.

As it supports hardware wallets, you can also hold your Bitcoin in offline storage and use Mycelium to see your holdings.

3. Electrum

Suitable For: Advanced Users Type of Wallet: Hot Storage Wallet Cost: Free Compatible Hardware Wallet: Trezor and Ledger

Pros	Cons
Transaction fees can be customized	Basic user interface
More Secure than other hot wallets	Works only for Bitcoin
Customizable Seed Phrase	No Built-in exchange
Open Source Software	Absence of Customer Support

Electrum is one of the original Bitcoin wallets that marks its existence back in 2011, just two years after Bitcoin was created. Since then, it is working the same way and only for Bitcoin. The user interface is quite basic and this wallet is mainly suitable for advanced Bitcoin traders due to its complex options. Electrum works the best with Windows, Mac, Linux, & Android and can be set up in minutes.

This Bitcoin wallet gives you the option to encrypt your wallet during setup, and you can also use it in a cold storage wallet to receive Bitcoin payments and check your balance, but not for spending coins, hence a useful option for long-term investors.

4. Ledger Nano X

Suitable For: Long-time Investors Type of Wallet: Cold Storage Wallet Cost: $119

Pros	Cons
Intuitive and Convenient User Interface	Open to cyberattack due to Bluetooth connectivity
Open-Source Software	Limited Wallet Storage
Can store 100 different apps	—–
Allows Bluetooth Connectivity	—–

The Ledger Nano X is the second-generation hardware wallet from Ledger; the wallet looks similar to a USB drive, and you can connect it to your device using USB or Bluetooth. Hence, you can even connect it to your iOS or Android device including a computer as it comes with a USB Type-C cable. For now, it supports more than 1500 cryptocurrencies that keep on increasing every year.

Although it is a cold storage hardware wallet, the Ledger team also offers Ledger Live software that offers you a user interface for all your holdings. And that makes it easy for you to add new wallets for different cryptocurrencies and manage your portfolios. For all those reasons, Ledger hardware wallets are the most popular these days.

5. Trezor Model T

Suitable For: Numerous cryptocurrencies Type of Wallet: Cold Storage Wallet Cost: $193

Pros	Cons
Web-based User Interface	Not beginner-friendly
Open-Source Software	Small touchscreen for typing
In-built exchange	Expensive
Supports numerous cryptocurrencies	——
Customer and Community Support	——

Trezor Model T is the second generation of hardware wallets by Trezor. This cold storage crypto wallet is just like the Ledger one, but it offers you one additional benefit that it gives you the ability to access third-party exchanges directly in its website interface; still, the users find it a bit expensive.

This model comes with a touch screen and even has a MicroSD card slot so that you can use MicroSD cards to encrypt the PIN and protect your device from cyberattacks. Trezor Model T also comes with a USB Type-C cable that you can connect to your desktop or smartphone. It supports more than 1600 cryptocurrencies as of now that is going to increase in the future.

6. Ledger Nano S

Suitable For: Numerous cryptocurrencies Type of Wallet: Cold Storage Wallet Cost: $59

Pros	Cons
Gives access to Ledger Live	Max storage of 18 wallets
Open-Source Software	No wireless Bluetooth feature
Secure storage	Expensive
Low Price	—–
Customer and Community Support	—–

Ledger Nano S is the first generation hardware wallet by the brand and is one of the earliest hardware wallets. Just like Nano X, it is also compatible with multiple Cryptocurrencies. The only difference is it doesn’t come with a USB type C cable and that can be a drawback for some users. It even gives you access to Ledger Live software and has enough storage to make wallets for limited cryptocurrencies. In case you want to delete a wallet to add another type of cryptocurrency, you would not lose it as the cryptocurrency you deleted in the wallet will get stored directly on the blockchain. Hence, it is one of the most popular and best Bitcoin wallets in the USA.