Are you a fresh Bitcoin user? Wij very recommend the free Copay wallet that can be used on many operating systems.
Have you bot using Bitcoin for a while and want to upgrade your security practices? Then keep reading!
Types of Wallets
There are many different ways to use Bitcoin and so there are many different types of wallets:
- Online bitcoin wallets. Wallets that can be accessed on the web from any internet connected device.
- Bitcoin hardware wallets. Physical devices designed to secure bitcoins.
- Software wallets. Wallet applications downloaded to your phone, rekentuig or tablet.
- Paper wallets. Bitcoin private keys printed from an offline pc.
By the end of this article you’ll understand Bitcoin wallets and have a better idea about which type is right for you. Here are some factors to consider:
- On the go? If you are making payments ter person and not online then a mobile wallet like Copay (iOS & Android), breadwallet (iOS) or Mycelium (Android) is a vereiste.
- Frequency of payments. If you will need to make frequent payments then it will be best to keep your funds ter wallet that is effortless to use and accessible. Mobile wallets and desktop wallets are good options.
- Amount. If you are dealing with large amounts of bitcoins you will need a secure wallet. Hardware wallets and secure offline wallets like Armory are good options.
- Use combinations. Use a mobile wallet spil your checking account, and a hardware or secure offline wallet spil your savings account. Mix and match to find a combination that provides both security and accessibility.
Copay is a Bitcoin wallet by Bitpay and available on iOS, Android, Windows Phone, Linux, Max OS X, and Windows. Because Copay is available on numerous platforms, it’s effortless to use the same wallet or accounts across numerous devices.
Copay’s ordinary, clean user interface makes it a good choice for fresh Bitcoin users. Copay is also a good option for businesses due to a collective account feature, which requires a certain number of users to sign each transaction. Two co-founders, for example, could create a Two of Two wallet where both will be required to sign each transaction.
Hardware wallets are puny computers or smartcards built with the foot purpose of generating Bitcoin private keys offline. Hardware wallets securely sign transactions te the same offline environment.
The Ledger Nano is a smartcard based hardware wallet. Private keys are generated and signed offline ter the smartcard’s secure environment. The Nano is setup using the Ledger Chrome Application. A random 24-word seed is generated upon setup and backed offline by writing it down on a lump of paper. Ter case of theft, harm or loss, the entire wallet can be recreated with the seed. A user selected Speld code is also assigned to the device to protect against physical theft or hacking.
The Ledger Nano may be used on any pc, or Android phones with Mycelium or GreenBits.
The TREZOR differs from the Ledger Nano te that it’s a very little rekentuig rather than a smartcard. Private keys are still generated offline.
TREZOR also generates a 24-word seed upon setup. The TREZOR has its own built te screen where the seed is displayed and copied down during backup. Since the TREZOR is an offline device it offers reserve security since the seed isn’t displayed on an online laptop.
An extra passphrase can be added to the 24-word seed. This provides toegevoegd protection, since anyone who finds someone else’s 24-word seed is free to access the funds. If the optional passphrase is added, an attacker still wouldn’t be able to access funds without both the seed AND the passphrase. If the passphrase is forgotten, it cannot be recovered.
The very first Bitcoin Bearer Unie or called a Bitcoin Stick. Opendime is a petite USB stick that permits you to spend Bitcoin like a dollar bill. Pass it along numerous times. Connect to any USB to check balance. Unseal anytime to spend online. Trust no one.
Acts like a read-only USB flash drive. Works with any rekentuig, laptop, and phone.
A QR Picture and Text opstopping inwards contain Bitcoin address and support.
The private key is generated inwards the device, and is never known to any human, not even you!
The Bitcoin world switches prompt but Opendime is built on the fundamental Bitcoin features that have not switched ter five years.
Give an Opendime to anyone and they don’t need to worry that you can take back the funds straks.
You have got the private keys te the device. This is physical Bitcoin spil it wasgoed meant to be to just arm it to someone and they have got it.
Pass it on numerous times! Ordinary spil a handshake. No miner fees, no confirmation delays.
Uses Bitcoin message signing, normal (non HD) bitcoin payment addresses and private keys ter WIF format.
The Ledger HW.1 is a more affordable version of the Ledger Nano.
The Ledger Unplugged is a credit card-size wireless hardware wallet. Private keys are generated offline. Transactions are signed on the device and sent to a mobile phone via NFC.
The Ledger Unplugged is ideal for everyday use, since the device fits flawlessly into wallets and no OTG cable is required.
Online Bitcoin Wallets
Online Bitcoin wallets, or web wallets, store your private keys online. Wallets can only be accessed with a user-set password.
GreenAddress is a multisig web wallet, with apps available for Chrome, iOS, and Android.
SpectroCoin is an all-in-one solution for Bitcoin. Services suggested include a broad range of Bitcoin solutions, from exchange to Bitcoin e-wallet.
Mobile Wallets for Android
Breadwallet commenced out spil the most popular wallet for iPhone, and now it is also available for Adroid devices running Android 6.0 or higher. The plainness and easy-to-use security makes it a good place to embark for users who are fresh to bitcoin.
Mycelium is a beloved among experienced Bitcoin users. It’s an HD wallet with many advanced features, like support for hardware wallets TREZOR and Ledger, watch-only accounts, cold storage spending, and Tor.
Bitcoin Wallet wasgoed the very first Bitcoin wallet for Android. It’s ordinary, effortless to backup, and connects directly to the Bitcoin network with SPV.
AirBitz is another Bitcoin wallet that’s excellent for everyday use. It’s integrated with Fold, meaning you can get 20% discounts at Starbucks from within the wallet.
Airbitz manages accounts with usernames and passwords, but doesn’t have access to your funds. This type of account creation is lighter for less technical users who may have trouble backing up or understanding HD seeds.
GreenBits is the native version of GreenAddress. It’s quick, plain, and supports hardware wallets TREZOR and Ledger Nano/HW.1.
Mobile Wallets for iOS
Breadwallet’s combination of plainness and security has made it the most popular iOS wallet. iPhone users ter search of their very first Bitcoin wallet should find Breadwallet effortless to understand.
Copay is available te the App Store. Click here for more details.
AirBitz is also available te the App Store.
Desktop wallets are software wallets that are downloaded and installed on your rekentuig. The desktop wallets below are available on Mac OS X, Windows, and Linux.
Armory is the most mature, secure and total featured Bitcoin wallet but it can be technologically intimidating for users. Whether you are an individual storing $1,000 or institution storing $1,000,000,000 this is the most secure option available. Users are te finish control all Bitcoin private keys and can setup a secure offline-signing process ter Armory.
Bitcoin Core is the “official” Bitcoin client and wallet, however isn’t used by many due to slow speeds and a lack of features. Bitcoin Core, however, is a utter knot, meaning it helps verify and transmit other Bitcoin transactions across the network and stores a copy of the entire blockchain. This offers better privacy since Core doesn’t have to rely on gegevens from outward servers or other peers on the network. Bitcoin Core routed through Tor is considered one of the best ways to use Bitcoin privately.
Electrum may be the most popular desktop wallet, due to its speed and ease of use. Electrum can also be used spil cold storage if you have an reserve rekentuig that can be used offline. Additonaly, Electrum offers other features like connecting through Tor, multisiganture wallets, integration with hardware wallets, and more.
Multibit HD is a prompt and straightforward desktop wallet with support for hardware wallets TREZOR and KeepKey.
Paper wallets were the standard method of cold storage before hardware wallets were built. Paper wallets are private keys printed out on a lump of paper. If generated and printed with a secure, offline rekentuig, paper wallets are secure cold storage.
The main problem with paper wallets is it can be inconvenient to create and print a fresh wallet each time you send funds to cold storage. However, it’s possible to bulk print paper wallets to save time and eliminate address reuse. Our cold storage guide explains step-by-step how to create a secure paper wallet.
Bitcoin lets you control your money, meaning you are responsible for both your money’s security and your financial privacy. Here are some steps you can take to ensure your privacy and security:
Control your private keys
Services like Coinbase and Circle suggest “Bitcoin wallets”, but te reality control your private keys. It’s best to use a wallet where you control your private keys. This is the only way to have utter control of your funds and not have to rely on third parties for security.
Protect your privacy
Each time you request blockchain gegevens from a wallet, the server may be able to view your IP address and connect this to the address gegevens requested. Each wallet treats gegevens requests differently. If privacy is significant to you, use a wallet that downloads the entire blockchain like Bitcoin Core or Armory. Tor can be used with other wallets to shield your IP address, but this doesn’t prevent a server from tying a group of addresses to one identity. For more information, check out the Open Bitcoin Privacy Project for wallet rankings based on privacy.
Don’t reuse addresses
Most Bitcoin wallets today automatically create a fresh address for each transaction. Since all Bitcoin transactions are public, address reuse makes it effortless for others to group transactions and understand which payments are connected to one identity.
Use different wallets for different sums of money
Just like you don’t walk around with your savings account spil specie, there are different Bitcoin wallets that should be used depending on how much money is being stored or transferred. Secure wallets like paper wallets or hardware wallets can be used spil “savings” wallets, while mobile, web, and desktop wallets should be treated like your spending wallet.
Create numerous secure backups
Users should create numerous backups of their wallets. Backups should be kept ter separate physical locations ter the case of fire or water harm. Paper wallets can be laminated or written te metal for reserve protection.
How to Store Bitcoins
Earlier it wasgoed mentioned that there are four types of Bitcoin wallets: online wallets, hardware wallets, software wallets, and paper wallets. Thesis four categories can be cracked down further into different kinds of storage and security:
Hot wallets refer to Bitcoin wallets used on internet connected devices like phones, computers, or tablets. Because hot wallets run on internet connected devices there is always a risk of theft. Think of hot wallets like your wallet today. You shouldn’t store any significant amount of bitcoins te a hot wallet, just spil you would not walk around with your savings account spil contant.
If only used with puny amounts, hot wallets should be used for your everyday Bitcoin needs. One may, for example, want to keep $200 worth of bitcoins te a hot wallet for spending, with $Ten,000 locked away te cold storage.
Albeit often called Bitcoin wallets, services like Coinbase and Circle aren’t true Bitcoin wallets. Customers private keys are held by thesis third party services, meaning users don’t truly have control of their money.
Spil Bitcoiners often say: “if you don’t control the keys, you don’t control the coins”. Mt. Gox is an extreme example, but one that illustrates the importance of holding private keys. Gox wasgoed the very first and largest Bitcoin exchange up until 2013. Thousands of users stored more than 800,000 bitcoins ter their Gox accounts.
At the time, one may have claimed to have 1,000 bitcoins te a Gox account. While true at the time, spil soon spil Mt. Gox claimed to have bot victim of theft users with bitcoins ter their accounts were left empty passed.
Services like Coinbase and Circle may ter fact use good security practices and there’s a chance your bitcoins are safe. But by storing bitcoins with a third party you are always taking on extra risk.
Cold storage is achieved when Bitcoin private keys are created and stored offline. Private keys stored offline are more secure since there is no risk that a hacker or malware could steal your coins.
There are three ways to create cold storage: paper wallets, hardware wallets, and software wallets run on offline computers. Think of cold storage spil your savings account. Use it to securely store bitcoins that you don’t project to spend.
Multisignature wallets like Copay make it lighter to share control of bitcoins inbetween numerous parties. If created offline, multisig can also make cold storage more secure.
Multisignature wallets require numerous parties to sign transactions te order for funds to be spend. Te a 2-2 wallet, for example, both parties voorwaarde sign a transaction. Te a 2-3 multisig wallet, two of the three co-signers voorwaarde sign each transaction.
Armory Multisig: Armory offers a Lockbox feature that requires any amount of up to seven co-signers to approve collective transactions. A Lockbox is created by one party who adds extra public keys spil co-signers. This solution provides a mix of plasticity and security for individual use or organizations.
Armory’s fragmented backups is another useful feature. Instead of requiring numerous signatures for each transaction, fragmented backups require numerous signatures only for backups. A fragmented backup splits up your Armory backup into numerous lumps, which decreases the risk of physical theft of your wallet. Without a fragmented backup, discovery of your backup would permit for instant theft. With fragmented backup, numerous backup locations would need to be compromised ter order to obtain the utter backup.
Here’s a look at some everyday use cases for multisig:
2-2 Wallet: Two business vrouwen work together at a startup. They create a 2-2 multisig wallet so that no funds can be spent without the permission of both founders. If one attempts to create a transaction, the other playmate will be required to sign off on the transaction before money can be moved.
2-3 Wallet: A 2-3 multisig wallet could be used to create secure offline storage with paper wallets or hardware wallets. Users should already backup their offline Bitcoin holdings ter numerous locations, and multisig helps add another level of security. A user, for example, may keep a backup of a paper wallet ter three separate physical locations. If any single location is compromised the user’s funds can be stolen. Multisignature wallets improve upon this by requiring instead any two of the three backups to spend funds–in the case of a 2-3 multisig wallet. The same setup can be created with any number of signatures. A 5-9 wallet would require any five of the nine signatures ter order to spend funds.