As Bitcoin becomes more popular, many new users must navigate the often confusing world of cryptocurrency storage, safety and security. One of the first steps any Bitcoin enthusiast must take is using a digital wallet, so we’ve decided to provide a brief guide on how to do this with as little confusion as possible.
What Are Digital Wallets?
Otherwise known as an e-wallet, a cryptocurrency wallet is a virtual storage place for your Bitcoins. Over the years, a variety of digital wallets have been released, all with their own pros and cons. So, what is the best Bitcoin wallet out there, and which will be best for you? Let’s take a look.
1. Online Wallet
As the name suggests, online wallets exist solely on the internet meaning that you can access your wallet from anywhere as long as you have a connection. Also known as web wallets, there are a wide variety of brands to choose from each with their own unique pros and cons. Since online wallets can be susceptible to hacks and scams, just like any other internet-based platform, we recommend you go with an online wallet with a great reputation and robust security.
2. Mobile Wallet
When it comes to convenience, no Bitcoin wallet can compete with mobile wallets. These exist as smartphone apps that you can download straight on to your device. This means that you can not only get into your Bitcoin storage while out and about, but you can also pay using your cryptocurrency at physical stores. There are plenty of wallets available for download on the Apple App Store as well as on Google Play Store but do be aware that there is a risk of you losing your Bitcoin if your phone were to go missing or break.
3. Desktop Wallet
Now we’re getting into the wallets with superior security. While online and mobile wallets are undoubtedly convenient, they are not quite as protected as their offline (or cold in Bitcoin terms) counterparts. Take desktop wallets, for example, these are downloaded and installed onto your PC and from then on can only be accessed from that specific PC. This is far safer than having your Bitcoins exist in the cloud, though you will have to make sure your PC is not threatened by viruses, security risks or damage.
4. Hardware Wallet
For many hardcore Bitcoin users, hardware wallets are the best choice. The term hardware refers to USB sticks and hard drives, where you can store your Bitcoins. If you want to make online transactions, you can plug your device in, but the rest of the time, your cryptocurrency will be stored safely offline and away from any computer-based nasties. Over the last few years, companies have started making Bitcoin-specific hardware devices with multiple security layers and robust designs to ensure hardware wallets can be just as convenient as online and mobile wallets, without compromising their safety.
5. Paper Wallet
Finally, we have the most secure Bitcoin wallet type of all: paper wallets. These are physical copies of your generated public and private keys all written or printed on a piece of paper. When Bitcoin first launched in 2009, this is how many early adopters chose to store their digital money as it removed any chance of theft. Of course, you must take good care of your paper wallet as, if that goes, so will any chance of you being able to use your Bitcoins.
Has this helped you decide which form of Bitcoin wallet is best for you? Let us know in the comments below, or please tell us what your favourite Bitcoin wallet system is if you are already ahead of the game.