LIFESTYLE

Types of Bitcoin Wallets For Secure Bitcoin Storage

Bitcoin Wallets

Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.

Combining digital security knowledge as well as secure bitcoin storage is important if you don’t want your accounts hacked and bitcoins drained. Remember – bitcoin transactions are not reversible. To send or spend bitcoins, one must have access to both public and private keys. Private keys, especially, must be protected.

 

Types of Bitcoin Wallets

There are a few types of bitcoin wallets and they have varying security mechanism to ensure the safety of private keys.

Simplistically, bitcoin wallets can be divided into 5 types: desktop, mobile, online, hardware and paper wallets. Some types may overlap or used in combination with each other. I’m going to touch on what to expect from each type and feature a few examples you can try out.

Here are  secure bitcoin wallet options you can choose from.

 

Desktop wallet

– Bitcoin desktop wallets offer one of the highest (if not the highest) level of security in terms of bitcoin storage.
– You must download the software to your computer and perform bitcoin transactions from desktops, so it may not be practical for some people.
– This option can be technical and confusing for bitcoin newbies.
Bitcoin Core
Bitcoin Core is the first and original wallet. Using this option means having control over both your public and private keys, which ensures safe storage.

However, Bitcoin Core also requires a lot of space as the software comes with data on every bitcoin transaction ever performed.

According to the download page, as of 2016 you need 65GB of free space – this number will increase as more bitcoin transactions happen every day.

Multibit
Just over 30MBs, Multibit is a lightweight desktop bitcoin wallet.
Many people use it together with KeepKey (more about this below), a USB device that requires your manual confirmation before any bitcoins can be transacted.

Armory
Calling themselves ‘The Only Open-Source Wallet With Cold Storage and Multi-Signature Support’, Armory is one of the popular options around for desktop bitcoin wallet.
Private keys are stored in an offline computer, which means that only someone with access to the physical location of the computer (it is kept secret) can steal bitcoins.

 

Mobile Wallets

– Bitcoin mobile wallets are not only accessible and practical
– Many also incorporate other layers of security to ensure users’ bitcoins are not compromised.
– It is a good idea to keep only a small amount of bitcoins in mobile wallets while keeping the rest in more secure options.
Note: All the recommendations below are available for both Android and iOS users.

Mycelium
Mycelium is one of the safest and most recommended options for secure bitcoin storage on mobile. Boasting ‘bank grade security’, it boasts Hierarchical Deterministic wallets, private key deletion and ‘watch only’ accounts.

Wirex
This full-fledged bitcoin service provider offers both online and mobile secure bitcoin wallets. What differentiates Wirex from the rest is its ease of use while not compromising security.
Users get multi-signature (‘multi-sig’) wallets and can enable 2-factor authentication (2FA) for both app and Wirex-linked email address, making third-party breaches hard.

Xapo
Famous for its vault and security, Xapo combines cold storage and multi-sig technology to keep users’ bitcoins safe. Its servers are kept ‘behind reinforced concrete walls, a steel blast door and radio wave-blocking Faraday cage’, located ‘within the Alps’.

 

Online wallets

– Online bitcoin wallets are wallets that are easily accessibly on the Web via any device so long as it can be connected to the Internet.
– It is easier and faster to make transactions via online wallets due to its accessibility.
– Phishing, malware, insider hacking or plain lack of digital security knowledge makes it easy for hackers to steal bitcoins from online wallets.
– The failure of two huge bitcoin exchanges (Mt Gox and Bitfinex) make people wary of such services.
– Although the bitcoin wallets recommended in this section have high reputation, we suggest you keep larger amounts of bitcoins in other types of wallets.

Blockchain.info
Blockchain.info is the most popular (8 mil wallets) website everyone uses to perform and check bitcoin transactions. They are often praised for its ease of use, multi-country support, and cross-platform capability.
Aside from web wallet, Blockchain.info is also available on desktop and mobile app.

BitGo
A respected name in the Bitcoin world, BitGo is considered a leader in blockchain security. BitGo is great for individuals and businesses who prefer near-instant transactions. Usually, a bitcoin transaction needs between 3-6 confirmations, taking about 30-60 minutes.
With BitGo Instant and its zero-confirmation technology, users can make both secure and fast transactions.

GreenAddress
Many bitcoin holders have the tendency to check bitcoin wallets multiple times to reassure themselves their bitcoins are still there. This constant login-logout might be unsafe if it was done over unsecured WiFi or exposed to malware or phishing tactics.
GreenAddress’s watch-only mode helps users to check balances without compromising safety. Hierarchical Deterministic wallets also help to keep users’ bitcoins secure.

 

Hardware Wallet

– The method of choice for many bitcoin holders to keep significant quantities of bitcoins
– Hardware bitcoin wallets are user-friendly and portable.
– All of these Plug-and-Play options give users complete control of their own bitcoins.

Keepkey
One of the biggest fears of a bitcoin holder is unknown transaction that depletes all of their bitcoin savings. KeepKey helps to alleviate this fear. Users will have to approve each outgoing transaction on the KeepKey device, manually.
Private keys remain in the device, which is also PIN-protected in case it falls into the wrong hands.

Trezor
A trusted name and endorsed by many key Bitcoin community leaders, Trezor is small and simple to use. It features security against malware and disaster recovery in case of theft or loss.

Ledger Nano
The smallest and most cost-effective option, the USD-sized Ledger Nano comes in a few variations. Everyday users can select between Ledger Nano or Ledger Nano S. The latter is the first hardware wallet that can also store Ether (ETH/ETH), making it the first of its kind.

 

Paper Wallet

– Bitcoin paper wallets are safe against hackers as the bitcoins are brought offline.
– Users have control of their bitcoins at all times as they keep own private keys.
– The  problem, however, is storage. Paper can be destroyed, torn, fade or otherwise lost.
– Unlike hardware wallets, there is no recovery mechanism for paper wallets – so lost bitcoins are lost forever. This is something you need to keep in mind if you want to use this option.
BitcoinPaperWallet
Users can print tamper-resistant paper wallets with this services to keep their bitcoins offline. Offering additional security tips, designs and supplies, this website is a favorite among bitcoin cold storage advocates. It even has a handy video showing you how to use this paper wallet.

BitAddress
BitAddress.org is a no-frills free service that can generate bitcoin paper wallets easily.

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