If you are just getting started with Bitcoins, Ethereum or any ICO’s, after you buy your currency at an exchange like Coinbase, Kraken, and Bitfenex you are going to need to store it somewhere to keep it safe.
You are going to need a secure coin wallet to protect you and your investment. There are several different kinds:
- Online wallets – Can be accessed from anywhere on the web or with any internet connected device.
- Hardware wallets – A physical device designed to hold your coins.
- Software wallets – An application downloaded to your computer or mobile device.
- Paper wallets – Your private keys printed or written down and kept offline.
The best wallet for you will depend on a few factors:
- Mobile or Not? – Do you need to use your coins to pay for items in person? Then you will need a mobile wallet like Copay (iOS & Android), breadwallet (iOS) or Mycelium (Android).
- Frequency of use – If you need to make payments quite often, then its better to keep your coins in a wallet which you can access easily and quickly. Mobile and desktop wallets fit this well.
- Transaction size – If you are dealing with large amounts of coins, you will need a more secure wallet. Hardware wallets like Armory are good option as well as paper wallets.
- Mix and Match – For everyday use, use a mobile or desktop wallet and think of it like your checking account. For more security, use a hardware or paper wallet to protect your investments.
Hot vs Cold Wallets
A simple distinction about the security of your wallet.
A hot wallet keeps all of its private keys so it can be used for any transactions. It is considered not as safe because hackers and thieves can gain access to it much easier than a cold wallet. Keep a minimal amount store on your hot wallet.
A cold wallet is for long term storage of your coins. Its private keys are unloaded and is probably not connected to the internet. Hackers and thieves will have a much tougher time trying to access your coins in this method.
An open source universal wallet by Bitpay and available on iOS, Android, Windows Phone, Linux, Max OS X, and Windows. You can use the same account across all devices, making it a great application to use for storage or on the go.
Copay’s design is extremely user friendly and intuitive, making it a great option for people new to cryptocurrencies. Additionally, a wallet can be set up businesses with multi user authentication, which requires a certain number of users to sign each transaction. So if you have a business you can set the wallet up so 2 or 3 people have to verify the transaction for it to be processed.
Copay’s simple, clean user interface makes it a good choice for new Bitcoin users. Copay is also a good option for businesses due to a shared account feature, which requires a certain number of users to sign each transaction. Two co-founders, for example, could create a 2 of 2 wallet where both will be required to sign each transaction.
A hardware wallet is a physical device like a smart card or small computer designed solely to generate and issue Bitcoin private keys. Hardware wallets are a cold wallet that secures your coins offline.
A multi-currency hierarchical deterministic multisig hardware wallet with a built in screen, which isolates your cryptocurrency data behind a locked personal pin code. With this wallet you can store any coin. The device is a little larger than a normal USB drive and more information can be found here. The Ledger Nano S is priced at €58.00.
The Ledger Nano S can also be used with Android.
Another hardware wallet, but instead of connecting through USB, it is a standalone device that connects by USB cable to either your computer or Android device. It is extremely use and all that is required is a pin code.
Upon setup Trezor creates a 24-key seed which is not shown on your computer or online. An additional passphrase can be added to the device, making it more secure, as anyone with the 24 key seed can access your funds. If you lose your passphrase you will permanently lose access to your coins.
Opendime is a small USB stick that allows you to spend Bitcoin like a dollar bill. Pass it along multiple times. Connect to any USB to check balance. Unseal anytime to spend online.
The device keeps the private key on the device itself and never shares it with anyone, not even the users. This allows the device to be passed along like cash. The coins on the device are in the possession of the owner. If you load coins onto the device and then pass it to someone else, they become the new owners of the coins and you cannot access them.
Online Bitcoin wallets, or web wallets, store your private keys online. Wallets can only be accessed with a user-set password.
SpectroCoin is an all-in-one solution for Bitcoin. Services offered include a wide range of Bitcoin solutions, from exchange to Bitcoin e-wallet.
breadwallet (iOS & Android)
Breadwallet’s ease of use and security has made it the most popular iOS wallet. Any iPhone user looking to download a great wallet app should try Breadwallet.
Mycelium is a great app for experienced crypto users. It has tons of advanced features like support for hardware wallets TREZOR and Ledger, watch-only accounts, cold storage spending, and Tor access.
Armory is the most secure and full featured solution available for users and institutions to generate and store Bitcoin private keys. This means users never have to trust the Armory team and can use it with the Glacier Protocol.
Users are empowered with multiple encrypted Bitcoin wallets and permanent one-time “paper backups.” Armory pioneered cold storage and distributed multi-signature. Bitcoin cold storage is a system for securely storing Bitcoins on a completely air-gapped offline computer.
Whether you have a few bitcoins or thousands, Armory is the most secure option available.
One of the most widely used desktop solutions. It is fast, easy to use and provides advanced options like cold storage, distributed ledgers, multisig, and proof checking. It can also be connected through Tor for an extra layer of protection.
Before hardware options like Trezor and Ledger Nano came along, paper wallets were the most secure way to protect your coins. To create a paper wallet you need a printer, offline computer or OS.
Creating a paper wallet and having the key be 100% random and without any of the information kept by any device takes time and patience. Check out this great guide to find out how you can create your own.
At the moment I use Copay because of its ease of access and device availability. However, you should check out all of these options to determine which one is best for you.
Comment below to let me know if I missed any.