Bitcoin Wallets – Complete Guide

This resource explains and compares the different types of bitcoin and crypto wallets

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A Bitcoin wallet is used to receive, send, store, and track Bitcoin transactions.

The perfect wallet for you will depend on how you intend to use Bitcoin. Regular bitcoiners use a combination of wallets.

This Complete Guide to Bitcoin Wallets explores each type of wallet, its strengths and weaknesses and the best Bitcoin wallets in 2018.

Bitcoin and other cryptocurrency/token wallets are a lot easier to use than you think. Read this short guide to know 80% of what the experts know

CHAPTER 1

What is a Bitcoin Wallet?

A Bitcoin wallet is used to receive, spend and store bitcoins.

In technical terms, a Bitcoin wallet is a specific combination of a Bitcoin deposit address (public key) and a password (private key) to spend the coins contained in that address.

Since Bitcoin is digital money, you will need a wallet and Bitcoin client (typically come packaged together).

What is a Bitcoin client?

A client is simply a user-friendly interface that communicates with a network. Outlook and Gmail are examples of email clients.

Bitcoin Core, Electrum and Blockchain are examples of popular Bitcoin clients (wallets).

The term “Bitcoin Wallet” is frequently used to describe a Bitcoin client (an interface). Bitcoin clients make Bitcoin easy to use.

Paper wallets and brain wallets do not come paired with a client by design.

Bitcoin wallets can be imported from one client to another instantly at any time. A client does not control your funds. A client never has access to your sensitive information.

DID YOU KNOW?

Despite being fundamentally different, Bitcoin wallets and Bitcoin exchanges have a few things in common. For example, they both allow you to send and receive Bitcoins.

CEX.IO, Coinbase, and other custodial wallets are not real Bitcoin wallets. Only use a hosted wallet if you trust them more than yourself!

FACT: Users who trusted exchanges and other hosted wallet services in the past have lost over $1 billion in Bitcoin!

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CHAPTER 2

Types of Bitcoin Wallets

All Bitcoin wallets can be categorized as either cold or hot. This simply refers to whether your coins are stored in a secure and offline location (cold) or in a vulnerable environment (hot).

Cold Storage vs. Hot Bitcoin Wallets

Cold storage wallets, also known as offline Bitcoin wallets, store your coins off the grid. This is unquestionably the safest way to store Bitcoin. Large sums of bitcoins should only be stored in a cold wallet.

Hot Bitcoin wallets run on connected and therefore vulnerable devices (PC, laptops, smartphones, and tablets). Some of these methods can be as secure as a cold wallet when managed diligently but we do not recommend it.

Comparing Bitcoin Wallets by Type

Bitcoin wallets are available for every computer, device and most internet browsers. Many wallets are available on every platform and compatible with hardware wallets too.

The most secure Bitcoin wallets are tiny Bitcoin computers commonly known as hardware wallets. like the Trezor or Ledger.

Wallet TypeSecurityUsabilityBest forCostPrivacy
HardwareHighEasySavingsYesHigh
Paper*HighHardSavingsFreeHigh
Desktop*MediumMediumHybridFreeMedium
Mobile (app) **MediumEasySpendingFreeLow
Online (web) **MediumEasyHybridFreeLow
Brain**HighHardSavingsFreeHigh
Hosted**LowEasySpendingYesLow

*Recommended only for users with advanced knowledge of Bitcoin wallet security; **We do not recommend storing a large sum of money using these methods

As illustrated in the table above, there is no perfect wallet and there is, in fact, a perfect explanation. If a wallet is secure, then it is offline. If a wallet is offline, then it is inconvenient for spending.

Most experienced users will have some sort of cold storage solution (typically a hardware wallet ) and a hot wallet (typically a mobile wallet).

You can think of a hardware wallet as your savings account or safety deposit box and a hot wallet as the wallet in your back pocket or purse.

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CHAPTER 3

Paper Wallets

Wallet TypeSecurityUsabilityBest forCostPrivacy
PaperHighHardSavingsFreeHigh

Only recommended for users with advanced knowledge of Bitcoin wallet security

Bitcoin paper wallets are the true essence of a Bitcoin wallet. Paper wallets can be created entirely offline using open source software and are ideal for advanced users storing a lot of coins.

Paper wallets are different than traditional wallets since they are offline and don’t come packaged with a Bitcoin client.

Advantages of Paper Wallets

 Ultimate security (cold/offline storage)

 Create offline

 Full control over your money (private keys)

 Control over your privacy

 Ideal for large sums of Bitcoin

Disadvantages of Paper Wallets

 Difficult to properly set up and use

 Best for advanced/technical users

 Not for daily spending

 Keyloggers and screen capture malware threat

 No user interface (client)

Bitcoin paper wallets are generated using JavaScript and are very secure. There are 2 trusted Bitcoin paper wallet generators listed below.

Paper wallets are only recommended for experienced individuals with an understanding of Bitcoin wallet security.

Best Bitcoin Paper Wallets 2018

 SecurityUsabilityAnonymityBIP EncryptionPriceVisits
BitAddress.orgHighHardHighYesFreeVisit
WalletGenerator.netHighHardHighYesFreeVISIT

 

BitAddress and Wallet Generator are both open source and trusted paper wallet generators. See our Complete Guide to Paper Wallets for guides, reviews, and tips.

For a more convenient way to store large sums of Bitcoin without compromising on security, check out hardware wallets.

SECURITY TIPS

We strongly recommend creating a paper wallet address offline. To learn how, read our guide.

Generating a paper wallet on a computer infected by keylogging or screen capture malware puts your bitcoins at very high risk of theft.

Never print your paper wallet from a public internet connection or printer.

If you lose your paper wallet (private keys) you will permanently lose access to your wallet and funds.

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CHAPTER 4

Hardware Wallets

Wallet TypeSecurityUsabilityBest forCostPrivacy
HardwareHighEasySavingsYesHigh

Bitcoin hardware wallets are physical devices designed for offline Bitcoin storage and security.

These devices are the most secure Bitcoin wallets. Hardware wallets completely isolate your coins from a vulnerable (online) environment.

Advantages of Hardware Wallets

 Ultimate security (cold/offline storage)

 Full control over your money (private keys)

 Control over privacy and fees

 User-friendly interface

 Compatible with other wallets

Disadvantages of Hardware Wallets

 Inconvenient for day-to-day spending

 Cost money (approximately $100)

 Limited supply

Bitcoin hardware wallets store your private keys directly on the physical device. Hardware wallets come with a 24-word seed that can be used to recover your wallet should it get lost or stolen.

In order for someone to steal your Bitcoin from your hardware wallet, they would need to steal the physical device and know your PIN. Alternatively, they would need to steal your seed.

Best Bitcoin Hardware Wallets 2018

WalletReleasePrice ($)RatingBuy Now 
Trezor Model T2018$1759.7/10Buy
Ledger Nano S2016$1059.3/10Buy
Trezor One2013$999.2/10Buy
KeepKey2015$1298.9/10Buy

See our Complete Guide to Bitcoin Hardware Wallets for more information

MUST READ

We strongly recommend setting up your wallet in a very private setting.

  • Never keep a copy of your PIN with your wallet.
  • Ensure the tamper evident seal is intact when receiving your wallet and before sending coins.
  • Carefully make several paper copies of your master recovery seed and store them in a safety deposit box ASAP.
  • We recommend keeping a copy of your master seed in 2 or more independent locations for increased security.

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CHAPTER 5

Web Wallets

Wallet TypeSecurityUsabilityBest forCostPrivacy
WebMediumEasyHybridFreeLow

We do not recommend storing a large sum of money using these methods

Bitcoin web wallets are accessible through an internet connection and a web browser.

These wallets are free and ultra-simple to setup and use. Online wallets are versatile and can be secure when managed properly.

Hosted online “wallets” like Coinbase and Xapo are not real Bitcoin web wallets since they control your funds.

Advantages of Web Wallets

 Full control of your money (private keys)

 Simple to use and easy to access

 Easy to backup and restore wallet

 Track cold storage balances

 Free to use

Disadvantages of Online (Web) Wallets

 Vulnerable environment (hot wallet)

 Limited privacy

 Storing large amount not recommended

 Keyloggers and screen capture malware threat

Web wallet providers store an encrypted copy of your wallet on their secure servers. This allows them to provide you access to your wallet “on demand” when your password is inputted.

Trusted online wallet providers like GreenAddress will never store your sensitive information; therefore they cannot control or restrict your funds. 

Even if the wallet provider were to get compromised, the hacker would need your password to spend your funds.

Best Bitcoin Web Wallets 2018

 SecurityUsabilityAnonymityTrading
BlockchainHighEasyLowYes
GreenAddressHighEasyLowYes
Coinbase VaultHighEasyLowYes

Blockchain, GreenAddress, and Bitgo are our favorite Bitcoin web wallets. For storing large amounts of money, we strongly recommend a Hardware or paper wallet.

See our Complete Guide to Online Wallets for more info

MUST READ

We strongly recommend creating and accessing a web wallet from a highly-secure computer.

Generating a web wallet on a computer infected by keylogging or screen capture malware put your bitcoins at very high risk of theft.

If you lose your password/PIN and your recovery (master) seed, you will permanently lose access to your wallet and funds.

CHAPTER 6

Desktop Wallets

Wallet TypeSecurityUsabilityBest forCostPrivacy
DesktopMediumMediumHybridFreeLow

Only recommended for users with advanced knowledge of Bitcoin wallet security

A desktop wallet (or client) is a computer program that is installed on and runs from a PC or laptop.

Software wallets allow you to send, receive and track your Bitcoin transactions on your computer. Most wallets are compatible with Windows, Mac, and Linux.

Advantages of Desktop Wallets

 Full control over your money (private keys)

 Control over privacy (full node)

 Free and open source

 Secure and reliable

 Can be used for hot and cold storage

Disadvantages of Desktop Wallets

 Vulnerable environment

 Complex to manage security

 Inconvenient for day-to-day

 Heavy (full node)

 Limited privacy (SPV)

Desktop wallets store your private keys and other sensitive information directly on your computer’s hard drive.

This gives you complete control over your coins and privacy but also the burden of securing your computer and private keys.

These wallets are typically free and can be secure when managed carefully. The original and first ever Bitcoin wallet is Bitcoin Core client.

Best Bitcoin Desktop Wallets 2018

 SecurityUsabilityAnonymityCompatible Coins
ElectrumHighMediumHighBitcoin
ExodusHighEasyHighBitcoin + ERC20
Bitcoin CoreHighHardHighBitcoin
CoPayHighMediumHighBitcoin
ArmoryHighMediumHighBitcoin

Wallet security and maintenance (backups) makes desktop wallets rather complex and tedious to use even for tech-savvy individuals.

See our Complete Guide to Desktop Wallets for more information.

MUST READ

If you are storing a large sum of money, we do not recommend using a desktop (software) wallet.

Hardware wallets are an excellent alternative to desktop wallets for their security and convenience but cost about $100.

If not secured properly, desktop wallets can be highly vulnerable to theft and hacks.

Always research a wallet before using it to make sure it is safe and reliable. Some unknown wallet providers might steal your money!

CHAPTER 7

Mobile Wallets


Wallet TypeSecurityUsabilityBest forCostPrivacy
MobileMediumEasySpendingFreeLow

We do not recommend storing a large sum of money using these methods.


Mobile wallets come in the form of apps and are ultra-easy to setup and use. Mobile wallets are ideal for daily expenditures and are recommended over other hot wallets.

Bitcoin wallets for Android and Bitcoin wallets for iOS are the most popular mobile wallets.

Advantages of Mobile Wallets

 Full control over your money (private keys)

 Ultra-convenient; day-to-day use

 Easy to backup and restore wallet

 Track cold storage balances

 Free to use

Disadvantages of Mobile Wallets

 Vulnerable environment (hot wallet)

 Limited privacy

 Cannot store a large amount

 Targeted platform

Mobile wallets store your private keys and other sensitive information directly on your smartphone.

This gives you full control over your coins but also the burden of protecting your mobile device and private keys.

These wallets are typically free and can be secure when managed carefully. Some apps may charge a very small fee when sending a payment in order to support its development.

Best Bitcoin Wallet for iOS 2018

The best mobile wallets for iOS are MyCelium, Jaxx, Blockchain, Airbitz, and Bread.

 SecurityUsabilityAnonymityCompatible Coins
MyCeliumHighEasyMediumBitcoin
JaxxHighEasyMediumBitcoin +
BlockchainHighEasyMediumBitcoin +
AirbitzMediumEasyMediumBitcoin
BreadHighMediumMediumBitcoin +

 

Best Bitcoin Wallets for Android 2018

MyCelium, Copay, Blockchain, GreenAddress, and Bread are the best Android wallets.

SecurityUsabilityAnonymityCompatible Coins
MyCeliumHighEasyMediumBitcoin
CoPayHighEasyMediumBitcoin
GreenAddressHighEasyMediumBitcoin
BreadHighEasyMediumBitcoin +

 

Planning to store a lot of coins? Do not use a mobile wallet! A hardware or paper wallet is your best bet.

DID YOU KNOW?

Coinbase and other crypto exchanges with mobile apps are not Bitcoin wallets. Exchanges offer what are called hosted or custodial wallets and should only be used to trade Bitcoin!

Exchanges have full control of your funds. You must request authorization to spend your funds. If an exchange gets hacked or becomes inaccessible, so do your coins. Users have lost over $1 billion from hacked exchanges!

Do not store/save your Bitcoin on an exchange or centralized service that provides wallet-like services. If you don’t have full control of your coins, you’re not using a real Bitcoin wallet.

CHAPTER 8

Hosted Wallets

Wallet TypeSecurityUsabilityBest forCostPrivacy
HostedLowEasyTradingYesLow

Hosted wallets like Coinbaseare by definition, not real Bitcoin wallets since you do not control your funds – one of Bitcoin’s pillars

If managing and securing a wallet yourself is something you rather not do, hosted wallets are ideal. By using a hosted wallet, you give up control of your funds in exchange for convenience like with a traditional bank.

Advantages of Hosted Bitcoin Wallets

 For all skill levels

 Convenient (online, mobile app)

 No private key management

 Buy and store Bitcoin in one place

 Free to use the wallet

Disadvantages of Hosted Bitcoin Wallets

 No privacy

 Cannot store a large amount

 Targeted platforms (phishing)

 Fees to spend Bitcoin

Planning to store a lot of coins? Do not use a mobile wallet! A hardware or paper wallet is your best bet.

Best Hosted Bitcoin Wallet 2018

If you are looking for a hosted wallet, CEX.IOCoinbase or BitPanda.

 SecurityUsabilityAnonymityCompatible CoinsVisit
CEX.IOHighEasyLowBitcoin +VISIT
CoinbaseHighEasyLowBitcoin +VISIT
BitPandaHighEasyLowBitcoin +VISIT

 

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