A Bitcoin Wallet is a digital wallet – you won’t be able to mine without it
On the wallet are the keys and the security to devalue the cryptocurrencies.
A wallet for digital currencies stores the private keys. With the private key you have access to your cryptocurrencies.
If you do not have a private key, you do not own any cryptocurrencies.
Therefore, handling wallets is essential for using digital currencies. That’s why you have to differ with the topic. With this tutorial you will find out which wallet you have selected and which one you need for wallets.
There are different types, we will list you the types down below.
Are Bitcoin Wallets Safe?
How secure a Bitcoin wallet is depends on its type.
Online wallets are the most insecure because a third party holds the private keys. The security of desktop wallets depends heavily on the security of the respective desktop.
If the computer is infected by a virus, there is a risk that the desktop wallet is also unsafe. Mobile wallets are generally considered to be more secure because the operating systems are less susceptible to viruses.
The Bitcoin Core Wallet is a highly technical wallet.
However, many personal contacts are overwhelmed by perception. There are plenty of alternative desktop wallets.
Electrum is a lightweight wallet that runs on all popular (Windows, Mac OS X and Linux). Electrum is sufficient for most applications
The access here is that use doesn’t have to download the entire blockchain, saving space. Electrum can also be combined with a hardware wallet.
- Many functions (possibility of full node, custom transaction fees)
- Supports SegWit addresses
- Not easy for beginners
- Virus-infected computers pose a security risk
Mobile Wallet (easiest for newbies)
Mobile wallets are installed as an app on the smartphone and store the private keys directly on the mobile device.
This means that bitcoins can be received and sent with your mobile phone in a matter of seconds.
Some mobile Bitcoin wallets even support near-field communication technology (NFC). The smartphone only has to be held up to the terminal and no scanned QR codes or a Bitcoin address are required.
Some mobile Bitcoin wallets even include near-field communication technology (NFC).
The smartphone must be there and the terminal must be preserved and other scanned QR codes or a Bitcoin address are required. Many mobile wallets have multiple cryptocurrencies.
- Easy to use
- Supports many cryptocurrencies
- Mobile possibilities (payments etc.)
- Big risk if smartphone gets stolen or lost
There are several apps for iOS and Android.
We recommend MyCelium.
MyCelium is a classic for Bitcoin users. The wallet is exclusive to Bitcoin. Any number of accounts (receiving addresses) can be set up within the app. MyCelium can also be used in combination with hardware wallets such as Ledger and Trezor.
Web-based wallets store the private keys online on a server that is managed by an external party.
A great advantage of online wallets is their availability. All that is required is Internet access on a mobile device.
Availability therefore costs security, large amounts should not be saved on an online wallet.
From knowledge and experience in the past we recommend you to try out CoinBase.
- Accessible from anywhere with internet access
- Intuitive use with login process and password
- Lack of security as third party controls the private keys
Hardware wallets offer the option of electronically storing private keys and making payments.
They are considered one of the safest ways to keep digital currencies.
The peculiarity of hardware wallets is that the private keys never touch the computer or the cell phone.
This means that even if the computer is infected by a virus, the attacker cannot access the cryptocurrencies on the hardware wallet.
- High security, since private keys never leave the hardware wallet
- Acquisition cost
The development team attaches great importance to transparency and security. The wallet is usually operated via the Trezor website.
The cheapest methods for the safe storage of Bitcoin are so-called paper wallets.
A paper wallet is a piece of paper on which, for example, a seed phrase is noted.
Bitcoin addresses can be restored with this seed phrase. All the wallet options already mentioned ultimately have a paper wallet as a security backup.
If you lose your cell phone or hardware wallet, everything can be restored with the Paper Wallet. The paper wallet is therefore the final key for every wallet and must be kept securely. If you just want to create a paper wallet, you can either use Electrum or run BitAddress.org on your computer.
Paper wallets and seed phrases should never be created online. It is therefore advisable to download the ZIP and run it locally in the browser. Paper wallets are ideal for HODLn. Those who make a transaction more often are better guided by the desktop and mobile wallets.
- Save the ZIP from BitAddress.org on a USB stick.
- Install a live distribution of Linux (Ubuntu / Debian) on another USB stick.
- Start Linux from the USB stick.
- Do not connect the computer to the Internet, but start the ZIP from the first USB stick.
- Generate the secret key using the tool and write it on a piece of paper.
- Send Bitcoin to the displayed QR code (share) and keep the paper wallet safe.
- High security through offline creation
- Easy storage
- Ultimate recovery key for a wallet
- Not very beginner-friendly
- Transactions require an additional wallet application