Agree or not, cryptocurrency is experiencing its time in the technology spotlight.
Whether you’re just grasping a few bitcoins to experiment with this new currency or you’re a more mature digital currency investor, all procedures you follow will remain the same.
To buy or trade virtual currency, you’ll require access to an exchange, either a stable platform under a single corporate flag or one of the more automated and distributed exchanges that have lately begun to surface.
With the support of the exchange, you’ll be able to acquire and trade your chosen crypto-coins.
But if you’re looking to collect your new currency or even use it on goods, services, or debts, then you’ll need a cryptocurrency wallet.
Yet just like the continually displacing crypto exchange platforms, the idea of the perfect cryptocurrency wallet is a continuously moving target, too.
Cryptocurrency wallets come in different forms and can span online, hardware, or even paper.
However they’re all designed to store at least one kind of digital currency, and in the case of cryptocurrency, maintain the cryptographic keys and other security constraints linked with key storage, digital currency transactions, and at times even identity (ID) verification.
When you’re speaking about the cryptographic keys associated with your cryptocurrency wallet, you’re referring to a prolonged series of numbers and letters that’s machine-generated and is used to secure and open access to your cryptocurrency holdings as well as to create the addresses of your wallet.
That’s a lot of power that is attached to your secret key, so where these keys are produced and who controls them is something you should heed carefully when picking your cryptocurrency wallet platform.
Bitcoin Wallets
A Bitcoin wallet is typically an application for transferring and accepting bitcoins. A Bitcoin wallet does that by combining with Bitcoin’s ledger, known as the blockchain.
Bitcoin wallet applications are available for mobile phones, desktops, and even as a unique piece of hardware. To be more clear, Bitcoin wallets are a bit comparable to how an email operates.
If you want to transmit and accept emails, you need some application to do so. Just like emails, accepting Bitcoins will require a unique personal address.
This individual address is known as your Bitcoin address and just like your email address you can share it with anyone who needs to send you bitcoins.
Types of Cryptocurrency Wallets
There are different types of wallets that can be used to collect or store your cryptocurrency. They come in numerous formats, created for different kinds of devices.
The three distinct categories of wallets available for storing your currencies are paper, hardware or software wallets.
Paper Wallets
A paper wallet is just a printed piece of paper that includes a cryptocurrency address and private key that are obtained using a QR code.
The benefits of paper wallets are that they take the form of cold storage, as they are not linked to the web and thus reduces the risk of hacking.
You can utilize paper storage to avoid having your currency stored in digital format at all.
Hardware Wallets
Hardware wallets are devices that are designed to provide an extra layer of security to cold storage options such as paper wallets.
With a paper wallet, for example, your funds are safe until you use a computer. But if the computer you then use to access your currency is jeopardized, you could then find your accounts hacked.
I will be talking more about hardware wallets in my next post.
Software
Software wallets are, based on computer software. There are several types of software wallets available. Some of which can store multiple currencies, others are created to save just one.
Some demand you to download the code to your device, while in certain others, most of the processing power needed is carried out by network servers.
Software wallets are available in three basic formats such as desktop, mobile and online:
Online Wallets:
Online wallets are cryptocurrency wallets that you enter through your web browser.
In some cases, people connect all hot wallets as online wallets. However, that only gets complicated when we start to consider individual stands that your wallet dwells on, such as mobile or desktop wallets.
Mobile Wallets:
Mobile wallets present access to your cryptocurrencies wheresoever you are with your mobile device and proffer additional features above and exceeding wallets that are entirely internet based.
Nevertheless, they also come with other security risks.
Desktop Wallets:
A desktop cryptocurrency wallet is regarded somewhat more safe than both an online (web) wallet and mobile wallet, however that depends on your confinement to online security.
If you are looking for a good software wallet to store your bitcoins on, here is a list of 5 great software wallets in the market:
Mycelium
Mycelium is an industry’s leading online Bitcoin wallet. The wallet links enterprise-level security as well as many other characteristics making it far more than just an ordinary wallet.
The team behind Mycelium started from a group of hardware engineers in the year 2008 and is now composed of a semi-open source group of developers and administrators.
The Mycelium wallet is one of the widely used Bitcoin wallets with hundreds of thousands of users around the globe.
The app looks forward to making Bitcoin frictionless, functional, and helps connect the gap to fiat currency while prevailing to be secure.
The project also aims to keep Bitcoin decentralized and in the hands of the customers.
Mycelium is accessible on both iOS and Android mobiles as a free download from their corresponding app stores.
For all Android and IOS users, Mycelium can be the best Bitcoins wallet. Apart from providing enterprise-level security, it has various other features which make this different from the other wallets.
Therefore it is a trading platform, a vault and, a wire-transfer and more.
Pros
- A diverse range of Features
- Highly secure
- Hardware wallet compatibility
Cons
- Not as safe as hardware wallets
- Only supports Bitcoin
- Some other wallets may have better privacy
Exodus
Exodus stands out among cryptocurrency wallets in that, not only it is designed solely as a desktop wallet, but its user interface (UI) can be described as beautiful.
The designers are cryptocurrency and open-source veterans and have gone to great lengths to not only make Exodus as broadly applicable as possible from a currency standpoint but to make sure it’s easy to look at and use.
However, Exodus is also relatively new, which means the company is still catching up in some areas, notably in security.
Pros
- Good interface with powerful charting tools
- Ideal for the cryptocurrency trader or portfolio builder
- Access to nearly a dozen cryptocurrency assets
- Tutorials, videos that guide you through the setup and use
- Engineered for beginners
Cons
- New company means lower reputation, especially since it is not open source
- Lacks two-factor authentication, which in turn has raised certain security concerns
Electrum
Electrum is a bitcoin wallet that is congenial with multiple working stands, such as Mac, and Linux. It was built by a German computer specialist and created to be lightweight and effective.
Over the course of years, numerous developers have committed to its source code, turning it what a great many believe to be one of the most entrusted crypto currency wallets available.
Even though there are over 900 cryptocurrencies in the market today, Electrum’s main focus is bitcoin in an endeavour to assure that the platform remains fast and effective at all times.
One of Electrum’s core features is its integration with the major hardware wallets, such as TREZOR, KeepKey and Ledger Nano S. This means you can combine Electrum with any of these premium hardware wallets.
Pros
- Broadly used platform.
- Very fast and simple to set up.
- Good privacy features.
- Integration with hardware wallets for added security.
Cons
- Not ideal for beginners.
- Only supports bitcoin.
Jaxx
Jaxx is a multi-chain wallet that allows support for seven various cryptocurrencies.
If you’re new to the cryptocurrency world, you’ll be pleased to know that Jaxx grants you access to world’s largest cryptos by market cap.
The Jaxx wallet supports over seven different cryptocurrencies, such as Bitcoin, Ethereum, and Dash, and is popular for its cross-platform pairing characteristic, easy-to-use interface, the client-side security system, impressive design, ease-of-switch between stored coins, local camera scanning, master seed backup, and much more.
The Jaxx wallet is recognized as one of the most versatile cryptocurrency wallets open. It’s constantly implementing innovative features and improvements.
Pros
- Great for beginners.
- A wide range of cryptocurrencies.
- Highly convenient, with mobile and desktop adaptability and seamless combination across any platforms.
Cons
- Certain security concerns latest
- A lack of 2-factor authentication
Copay BitCoin Wallet
The Copay Bitcoin wallet is a well-known free software wallet that only allows you to store bitcoins.
It is available in the market as a desktop and mobile wallet and supports multiple users to be able to use a single wallet.
Designed and created by BitPay, a preeminent cryptocurrency payment system, Copay is held as one of the most secure wallets.
It is easy to use for beginners and any person that makes use of their Bitcoin on a regular basis as a mode of payment.
Pros
- Multi-signature wallet
- Supports multiple wallets on one app
- Open source
- Easy to use for beginners
- Highly reputable wallet backed by a leading bitcoin payment firm
Cons
- Service relies on central verification, which may upset some bitcoin users
- Maybe a steep learning curve for beginners
Final Verdict
Aside from the fact that the main reason that you may want a wallet is to guard your funds, you should also analyze how you plan to use your currency.
For longterm storing for investment purposes, an offline wallet is seemingly safer, such as a paper wallet or hardware wallet.
However, for everyday use, mobile wallets and online wallets are more comfortable.
Whatever method you make use of, make sure that you create backup options.
Although hacking is a real and severe risk in the cryptocurrency space when it comes to virtual currencies, there is far more currency lost related to personal negligence than that is occurred through hacking.
Therefore, always keep backups of your secure keys and similar details in a safe place.
Are you familiar with any other wallets? Don’t hesitate to share the list if you are using any other bitcoin wallet for storing BTC.
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