The choice of wallet for Bitcoin is no longer just a matter of choice for the benefit of security or ease. Using different wallets for different purposes is becoming commonplace, as is the use of different accounts when dealing with fiat currencies.
A few years ago, several main types of wallets emerged, and new developments continue to appear. Therefore, the choice of a wallet for those who have just started acquaintance with cryptocurrency only gets more complicated. Here we will try to conduct a brief classification of wallets by their purpose.
A Bitcoin wallet is, in the simplest case, a pair of two large and complex numbers. The first number is the public key and the second is the private one.
The public key will be your wallet or address to which you can send Bitcoins.
Private key – this key is encrypted and is not subject to public access, it serves to confirm transactions within the blockchain.
Types of Bitcoin wallets and choosing the best one for you
Bitcoin wallets are not limited to one option, there are several types. To store these wallets, you need to download and install a special application on your computer. In this case, you will have local storage for the file with the keys, and you yourself will need to work with the security settings. The only exceptions are HD wallets.
Types of wallets:
- Web wallets (or online).
- Mobile (installed on smartphones, etc.).
- Local (installed on a PC or laptop)
- Hardware (as a separate device).
We will consider all types and you can choose the best option for yourself in terms of reliability and complexity of use.
For cold wallets, you need to download the full blockchain and constantly load new blocks. This type of wallet has a number of disadvantages for the average user:
- loading takes a very long time – more than a day at first use. the entire register of transactions is loaded from the first day of Bitcoin’s existence,
- volume – takes about 100 GB of hard disk space, since it includes the entire cryptocurrency blockchain,
- there is a risk of complete and irrecoverable loss of the wallet itself if the hard drive is damaged. all information is stored only by you.
For hot wallets (they are also called light wallets), you do not need to download the entire block history, since you can operate with all the necessary data on third-party services. This method is convenient when using a wallet on a mobile terminal. But here there is already lower security of using BTC because you will need to entrust some of the necessary data to outside resources.
Hardware wallets. Hardware wallets such as Trezor, Keepkey and Ledger Nano S provide convenient access to bitcoin with a high degree of security since private keys are stored only in the wallet’s memory. While these wallets can cost $ 60 or $ 100 to use, they allow transactions to be made in a way that hackers cannot reach.
Wallets with this level of protection are ideal for receiving and storing and lending bitcoins. Once the bitcoins are in the wallet, some of them can be transferred to any other place for permanent use, while the main amount will be safely “hidden” in the hardware wallet.
There are 5 factors that characterize every bitcoin wallet:
- Verification of payments.
- Control of funds.
You should choose a wallet based on what you want to do. If, for example, you want to store a large amount in cryptocurrency, then it is better to choose a hardware solution if you want to quickly carry out some operations or explore the possibilities, then wallets like Jaxx or Blockchain.info are suitable for you.
For maximum privacy, use wallets that download the full blockchain, if the wallet uses centralized servers, then a group of your transactions can be very easily tracked by IP, even if you use Tor. Do not store the entire amount in one wallet, try to distribute it to increase the reliability of storage. Ideally, divide the money into 5-10 parts, and not only into different wallets but also into different computers. Although if we are talking about 1000 dollars, then there is no point in complicating things so much.
Next, we will understand in detail what a bitcoin wallet is and its varieties.
Local bitcoin wallets as an application for PC and laptop
As noted above, no block download is required for the thin client. The fact is that all the data is available to you on the server that the client uses. It is most convenient to manage such wallets from a laptop or tablet. They are nimble and comfortable at work.
There is only one BUT! Anything that needs to be verified is done by a third party, which negatively affects safety. But you control the keys yourself. So what apps can you use for thin BTC wallets?
Electrum – regular and portable version (editor’s choice!)
It 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, and this reduces the amount of data downloaded, but at the same time reduces the level of security and anonymity, as your data is sent to centralized servers that speed up the work, but allow you to associate actions with your IP address. We can say that this is the best bitcoin wallet.
This application maximizes the speed of workflow on the Bitcoin network and minimizes resource consumption. After you install the application, you will be prompted to select a server to which you will subsequently connect. You can choose from the proposed list, or you can offer your own server.
After these actions, a secret phrase (seed) will be generated, which should be written down somewhere, or printed under the guise of a QR code. In this case, you do not need to create a backup wallet backup.
In addition, Electrum allows you to use offline storage if you have a computer that is not connected to the network to increase security. The wallet can be restored using a special mnemonic code (12 words), and you can also use Tor to increase anonymity. Also, Electrum is a bitcoin wallet in Russian.
The main advantage of this client is the minimization of resources used and fast work with the Bitcoin network. Most of the operations are performed outside the client, on a server that you can select from the list or specify your own. To work with Electrum, a special seed will be generated, thanks to which there is no need to create wallet backups. One of the advantages of the program is the support for Android devices, which greatly simplifies the use of the client.
Jaxx multicurrency wallet
One of its main features is support for full storage of several cryptocurrencies at once, between which you can switch, like between dishes at a festive dinner, and the prompt addition of the most trendy cryptocurrencies before everyone else adds them.
You can view information about tokens using conveniently switchable tabs. The token details display Transaction history (not in such details as in Electrum, but still) and the current bitcoin address (QR + symbolic) with a convenient copy icon to the clipboard.
However, unfortunately, the abundance of style is overshadowed by a somewhat stripped-down functionality. For example fixed commissions (for which part of your coins is “reserved” in advance, regardless of your consent, and the more coins you store, the more coins are “reserved”), the impossibility of importing third-party Accounts (the possibility of making settlements for the company is automatically excluded) and 4-digit password, which is as easy (or difficult?) To guess as a PIN code from a bank card.
The JAXX toolkit allows you to:
- View your Seed key (here it is called “Backup Phrase”, which does not change the meaning)
- See private keys (bitcoin addresses are shown in pairs with the corresponding keys)
- Synchronize devices (one JAXX for all your devices)
- Successfully split ETH / ETC if it suddenly turns out that you have not already done so and you had ETH tokens at the time of the network hard fork.
Online wallets for storing bitcoin (browser)
Browser Bitcoin wallet (online) has a number of advantages:
- You do not need to download all the blocks of the network, as it takes a lot of time, both during the first download and during each launch of the always-on local wallet.
- You can control it on various devices, regardless of your location, the main thing is that there is free access to the Internet.
- Most of these services offer their users additional conveniences. In the same service, you will be able to operate transfers to its other users to an email address or indicating a phone number. You can also send notifications and use address books.
But, as good as it may be, you should not forget that using an online wallet means entrusting your funds to an outside resource. Therefore, their safety depends not only on you. When such a service is hacked, your coins can simply be stolen.
Examples of the most popular online wallets:
- Leo bit
There are times when the owner is not a very confident computer user and cannot really configure the protection of his wallet. Or the computer is too weak to use the “cold wallet”, or maybe a person simply does not want to install programs on a computer, since he does not operate with large amounts. The reasons may be different – in this case, it would be wiser to use Blockchain.
Benefits of online wallets:
- The easiest way to store a small number of bitcoins
- Conveniently quickly send and receive payments
- Some online wallets allow you to use your account on multiple devices at once
Disadvantages of online wallets:
- It is dangerous to store large amounts of bitcoins
Matbi – a convenient bitcoin wallet and exchanger in one (editor’s choice!)
Matbi is a service that provides customers with the ability to create a bitcoin wallet, exchange bitcoins, and store them in one place. This will allow you to buy, sell, store, and spend bitcoins in just a few clicks.
All actions in Matbi are confirmed by SMS, E-mail, and pin-code. The latest generation security system has been introduced to protect bitcoins.
- Security. Matbi wallet uses three-factor authentication: SMS code, email code, and PIN code. Even if a virus has settled on your computer, it will in no way be able to read the code from SMS. And if a virus settles on a smartphone, it will not be able to read the pin code or email code.
- Reliability. Files with bitcoins are regularly backed up, so even in the event of an accident or failure of hard disks, clients’ bitcoins will be immediately restored. Most of the bitcoins are stored in cold storage. The hot storage is protected to all safety standards.
- Convenience. Quick access to bitcoins. You can pay for goods or services with bitcoins in 1 click directly from your browser.
- No wallet commission. There are no commissions for bitcoin exchange in Matbi, and bitcoin prices are kept at favorable levels.
- 24/7 support. Technical support for Matbi wallet works 24/7.
The list of payment systems that the Matbi service supports: Yandex Money, Qiwi, Bitcoin, Litecoin, Dash, Zcash, VISA \ MasterCard, any bank in the Russian Federation (Sberbank-online, Alfa-Bank, VTB24, etc.), cell phone, Euroset.