How to keep Bitcoin? TOP-5 types of Bitcoin Wallets
By: Crypto Info
Tags: How To Keep Bitcoin, Bitcoin Wallet, Types Of Wallet, Bitcoin

Choosing a bitcoin wallet is no longer just a matter of choice in favor of security or simplicity. Using different wallets for different purposes is becoming common same as using of different bank accounts when working with currencies like a US dollar or Euro.

A few years ago, there were several major types of wallets and new developments in this sphere continued to appear. Nowadays, the process of choosing a wallet has become more complicated then before. Here we will try to carry out a brief classification of wallets according to their purpose.

A bitcoin wallet is a pair of two large and complex numbers. The first one is a public key. It is your wallet or adress to send or receive Bitcoins. The second one is private key. It’s encrypted and not intended for public access. A private key serves to confirm transactions on blockchain.

Types of Bitcoin wallets

You need to download and install a special application on your computer for using a wallet. In this case, you will have local storage for the key file, and you will need to work with the security settings by yourself. There are several types of Bitcoin wallets:

Web-wallets (online wallets); Mobile (installs on smartphones etc.); Local (installs on a PC or a laptop); Hardware (as a separate device); Paper.

In addition to preveous classification of wallets, there is also a division into cold or hot wallets

You need to download full blockchain and constatly upload new blocks for using cold wallet. This type of wallet has a number of drawbacks for the average user:

download takes a lot of time — more than a day when first used. The entire transaction registry is loaded starting from the first day of Bitcoin existence The volume takes about 100 GB of space on your HDD device because it includes the entire Bitcoin’s blockchain. There is a risk of a complete and irretrievable loss of the wallet itself if the hard disk is damaged. So you need to make a reserve copy for safety on another device.

You do not need to download the entire history of the transactions while using a hot wallet. You can operate with all the necessary data on third-party services. This method is convenient when using the wallet on a smartphone. But security level is much worse than cold because you will need to entrust a part of the necessary data to third-party services.

Web-wallets (online wallets)

Online Bitcoin wallets has several advantages:

You do not need to download blockchain. You can manage a wallet on a different devices. You will be able to operate with translations to other users by using an e-mail address or a phone number. You can also send notifications and use address books.

But, no matter how good it is, you should not forget that using any online wallet means entrusting your funds to a third-party service. Therefore, the safety depends not only on yourself. If this service would be hacked, your coins can be stolen.

Examples of the most popular online wallets:

coinbase

blockchain.com

cryptopay

xapo

bitpay

There are some cases that the owner is not a very confident computer user and cannot properly configure the protection of his wallet. Or the computer is too weak to use the “cold wallet” and maybe a person just does not want to install programs on the computer since he does not operate with large amounts.

Mobile wallets

Mobile wallet is installed on smartphones that runs on iOS or Android. Mutual settlements can be carried out using QR codes or NFC technology.

Android-based wallets

At the moment, you can choose from a variety of different Android-based wallets. Since Bitcoin wallets are sometimes blocked by Apple, developers are much more focused on developing wallets for Android.

1.Bitcoin Wallet.

It works offline on Android. You can quickly make a transfer by scanning the QR code or using NFC. The integrated calculator can help you to convert BTC to any another currency. It has a possibility to create an address book on the most frequently used addresses.

2.Mycelium.

It is considered one of the most popular Bitcoin wallets for Android. It is very easy to use. You can also easily create backup copies. A very detailed guide is provided with the application.

3.Breadwallet.

It is a great Bitcoin wallet for the iPhone, which was recently introduced in the Android version. Wallet allows you to manage private keys with an easy-to-use user interface.

4.Edge wallet.

It is an easy-to-use Bitcoin wallet for iPhone and Android. Convenient authorization allows you to easily cope with the application. The wallet automatically back ups so you don’t have to worry about it.

5.GreenBits.

It is a native Android version of the GreenAddress wallet. This is a multi-signature wallet that also supports TREZOR and Ledger hardware wallets.

iOS-based wallets

In February 2014, Apple banned all Bitcoin wallets on the App Store, but changed its mind after a couple of months. Fortunately, now there are many options available for iOS users. In addition to the Breadwallet and Edge wallet there are unique purses, which are also good.

It supports a lot of cryptocurrencies like a Bitcoin or Ethereum. There is a possibility to buy cryptocurrency by fiat. It has many features like a real time or historical price charts for supported currencies, high-level security measures, chart alerts. You can use Coinbase on a different devices. There are available web, Android and iOS versions.

2. Blockchain.

This is a free wallet which can be used across a wide range of devices including iOS. It is fully open source. At the same time, it is very secure. None of the leading security researchers has been successful in cracking its security measures.

3. Copay.

This is a product of Bitpay, very reputed in this field. This wallet was originally built to handle its company’s funds and that tells a lot about its security. It is open source. Also, supports multiple languages.

Local wallets

As we said earlier, wallets are divided into cold and hot. Now let’s discuss a couple of examples.

Among the cold wallets, we consider Bitcoin Core, as well as an application that extends its functionality.

Bitcoin Core.

If you are not sure which wallet to use, then choose Bitcoin Core. This application has a high-level security, confidentiality and it works stably. This is an official BTC client but it has a large resource intensity. Experts advise to keep it constantly on for supporting the Bitcoin system. It allows other nodes to connect to you. If for this application your computer or laptop is weak, then for such cases there are other Bitcoin wallets. The special features of Bitcoin Core include the fact that the wallet.dat file is used to store your BTC addresses and private keys. The file can be encrypted using a password. You can import and export keys, and you can sign messages.

Armory for Bitcoin Core.

Armory carries out its work on top of Bitcoin Core and expands its functionality. You need to install the official Bitcoin Core client and synchronize the blocks before using it. Armory is easy to use. Along with improved security under your control, there may be several wallets. It will reliably protect your data from Internet attacks, plus provide the use of storage offline. With Armory, you can create messages that you can sign using the Bitcoin private key address. This is necessary so that the recipient knows that this message was sent by you.

For a hot wallet, as we said earlier, the download of the entire blockchain is not required. All data is available on the service server. These wallets are very easy to manage from a laptop or tablet.

Electrum.

This is one of the most popular Bitcoin wallets for personal computers. It is very fast and easy to use. Electrum uses third-party servers to confirm transactions. This reduces the amount of data loaded but reduces the level of security and anonymity because your data is sent to centralized servers. This application speeds up the workflow in the Bitcoin network to the maximum and minimizes resource consumption. After you install the application, you will be offered the choice of a server to which you will later connect.

Electrum allows you to use offline storage if you have a computer that is not connected to the Internet. A wallet can be restored using a special code of 12 words, which is issued when creating a wallet. The main advantage of this wallet is minimization of resources used and quick work with the Bitcoin network. Also, you can install wallet on Android devices.

Jaxx multicurrency wallet.

One of its main features is the support of full storage of several cryptocurrencies at once. You can view information about tokens using conveniently switchable tabs. The details of the coin are displayed: transaction history and the current Bitcoin address with a convenient copy to clipboard icon. However, unfortunately, the abundance of style overshadows a few trimmed functionality. For example: fixed commissions, the inability to import third-party accounts and 4-digit password.

Exodus.

It is very similar to Jaxx, the only significant difference is the “e-mail backup” function when the Seed-key of 12 English words sent to the mail in encrypted form.

Hardware wallets

Located on a separate physical device, looks like a flash drive or tablet. Hardware wallets are secure offline storage. They store your private keys without an internet connection, which means they cannot be hacked. This means that you can use hardware wallets even on hacked or unprotected PCs.

Examples of Bitcoin hardware solutions from four leading manufacturers:

1. Trezor.

2. Ledger wallet

3. KeepKey

Wallets were designed only to store private keys on removable device.

Ledger Nano S is the cheapest of hardware wallets. It will cost you about $ 63. The device was introduced in August 2016 by Ledger, one of the most famous companies in the Bitcoin industry.

Ledger Blue is a portable hardware wallet of the premium segment, has its own touch screen and is connected via USB / NFC / BLE to a PC or smartphone.

TREZOR was released in August 2014, and this is the world’s first hardware Bitcoin wallet, providing secure storage for bitcoins. The device is made in a compact design.

KeepKey wallet was launched on the market in September 2015, and is considered the second wallet in history equipped with a screen. The KeepKey large screen allowed developers to add several new security measures.

Ledger HW.1 is considered one of the most budget hardware wallets. It does not have a screen, and therefore it cannot be considered as safe as the three previous wallets. Although at the same time it will still be protected better than online wallets.

Paper wallets

A paper wallet is a paper where private and public keys are printed as a QR code. To use these keys, you have to scan them. Paper wallets are usually better and safer than any other type of wallets. Creating a paper wallet does not require a lot of effort or technical knowledge. A few simple steps will significantly secure your coins. This wallet is not available online to hackers and scammers, so it lies in your locker. Your currency is presented in the form of a piece of paper on which the keys are printed. Such a wallet is like an expensive cashier’s check with which you can use funds or transfer them to anyone. Paper wallet is the simplest form of cryptocurrency storage. Easy to pass on to someone close to you. If something happens to the owner of a cryptocurrency his relatives will hardly be able to have access to his exchange or hardware wallets. However, a paper wallet can easily be stored as part of a valuable asset in its locker or physical space.

Examples of sites where you can make a paper version:

https://www.bitaddress.org/

https://tools.bitcoin.com/paperwallet/