If you know the tidbits of the crypto market you must know that you need a cryptocurrency wallet in order to store this digital asset.
Unlike fiat money, this currency cannot be stored in your purse or wallet. You require a cryptocurrency wallet in order to store cryptocurrency.
In this article, we will explain everything that you need to know about crypto wallets and how they are used.
What is a Bitcoin Wallet?
Bitcoin – the most popular cryptocurrency, which has seldom seen a free fall in its prices, can be stored on almost every crypto wallet.
A bitcoin wallet is a type of crypto wallet that allows you to send, receive and store Bitcoins.
In reality, bitcoin wallets don’t store your bitcoins, they always remain on the network. These wallets are proof of your ownership in form of your public and private keys.
Currently, there is a wide range of crypto wallets the market offers but selecting the best from them can be tricky, especially if you are new to the crypto world.
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However, we have made this task easier for you. In this guide, we will delve into the best bitcoin wallets available in the market and also explain some of the most common concerns of users.
The table of content is as follows
- Types of Wallets
- What to look for in a crypto wallet
- Best Bitcoin wallet of 2023
- FAQs
Types of Wallets
1. Hot Wallets
A hot wallet is exactly similar to a cold wallet with the only difference being that, a hot wallet is connected to the internet while a cold wallet is not.
These wallets are great for user who use cryptocurrency for buying stuff online as cryptocurrencies from these wallets can be transferred smoothly over the internet.
However, security breaches and hacking remain a potential threat for hot wallets as the private and public keys are stored on the internet.
2. Cold Wallets
In a cold wallet, cryptocurrencies are held in an offline wallet. As it is not connected to the internet the question of hacking or stealing is out of the window.
Also in order to sign in to a cold wallet, you do not require any internet connection thus eliminating network-based theft.
Some of the forms of cold Wallets are Paper wallet and hardware wallet which uses a removable device or a smartcard to generate private keys all while being offline.
A paper wallet as the name suggests refers to a physical copy or print paper of your public and private keys.
It can also be referred to as software that generates a pair of keys along with your digital file for printing.
These paper wallets have a high level of security, and you can easily generate a paper wallet from Bitcoin Paper Wallet Generator.
However, these bitcoin paper wallet is not durable so prepare an appropriate storage facility for storing them before creating one.
3. Hosted Wallets
A hosted wallet is a crypto wallet that stores your private keys, which means, you can always regain access to your crypto assets even if you forgot your password or backup phrase.
In exchange, the wallet takes care of your funds for you.While all these sound fun and assuring, there are some serious disadvantages of hosting web wallets.
4. Decentralized Wallets
In decentralized wallets, you have full control over your private keys. You do not need to depend on any third party in order to send, receive or store your cryptocurrency while results in no security risks.
Some examples of decentralized wallets are Electrum and Mycelium. (Worry not, we have explained the features, PROs and CONs of these in our following list)
What to Look For in a Crypto Wallet?
There a number of factors you must consider before getting a crypto wallet. Following are some of them:
1. Security
Security is the biggest consideration you must make while choosing a cryptocurrency wallet. You might want to know whether your private keys are stored on their servers or do you have full access to them.
Also whether the wallet provides two-factor authentication to safeguard your account from any unauthorized access.
You might also want to look out for a multi-signature support feature. Sometimes a crypto wallet is held by many individuals.
There could be a situation where one person uses the funds excessively, so in order to tackle this problem, you could set up multi-signature support.
Which will require authorization from all individuals who hold the account before every transaction.
Mobile wallets must have a QR code scanner. They usually generate a QR code for coin transfers.
2. Wallet Utility
It is a growing trend among crypto wallets to provide storage as well as exchange features. Some example of wallet which provides an exchange system are Atomic Wallet, Robinhood, Coinbase, etc.
3. Mobile Wallets
Similar to desktop wallets, mobile wallets allow payments via a touch-to-pay system and by near-field communication (NFC) by scanning a nearby QR code.
The majority of bitcoin wallets are compatible with android and iOS. Generally, mobile wallets are considered safe but are not recommended as storage for cryptocurrencies.
4. Multi-currency V/s Single currency
If you are looking for a wallet to store only one cryptocurrency i.e. bitcoin you might want to skip this point.
This is because today majority of crypto wallets allow the storage of Bitcoins.
However, if you are planning to store more than one crypto you might want to check if your desired wallet supports the storage of your coin before you make an account on the wallet.
With all the above points in mind let’s begin our list of the top 8 cryptocurrency wallets.
The Best Crypto Wallets for 2023
1.Exodus
Exodus is the most popular multi-currency crypto wallet in the market. The features of this wallet are simple that even a newbie in the crypto world can easily understand its functioning.
Launched as a desktop application it can now be downloaded on iOS and android. The best part about Exodus is its support for a wide range of altcoins along with Bitcoin.
PROs
- Supports multiple currencies
- User-friendly interface
- Updated regularly
CONs
- Not fully open source
- No two-factor authentication
2. Electrum
One of the earliest Bitcoin wallets is Electrum, having been launched in 2011, it still remains on the top of the game.
This wallet is best suited for people who are already experienced in the crypto market and know-how a bitcoin coin wallet works.
This is because this website does not offer any fancy guides or walkthroughs. So if you are looking for a wallet with a simple user interface this is definitely not the right choice for you.
However, electrum has never compromised the security and privacy of its users which is why this still remains the favorite choice of people even after a decade since its launch.
PROs
- Supports multi-signature wallet feature
- Fast and easy set-up
- Do not store your private keys.
CONs
- Not regulated
- No guide for first-time users
- Only supports Bitcoins
3. Mycelium
Another outstanding cold storage bitcoin wallet has to be Mycelium. It is an easy open-source and mobile-only blockchain wallet.
It has an inbuilt exchange that allows you to set up transaction fees and allows you to choose how long you are willing to wait for the transaction to complete.
PROs
- Secure and fast service
- No fee required for signing up
- Well established wallet
- Open-source
CONs
- No desktop support
- Not recommended for beginners
4. Ledger Nano X
A hardware cryptocurrency wallet that supports a multitude of cryptocurrencies. They offer devices that can be connected to your mobile phone or desktop.
Being a cold wallet all your assets are stored offline. They support storage for an overwhelming range of 1,500+ cryptocurrencies.
This wallet is so popular that it has already sold over 1 million devices. Impressive, right?
PROs
- Easily accessible from mobile or desktop
- Very secure
- 1400+ cryptocurrencies can be stored
- User-friendly interface
CONs
- Expensive
5. Coinbase
Coinbase is well-known in the crypto industry. It is one of the safest digital currency storage platforms.
It is so secure that it has never had any attacks or security breach on it system since its inception.
Also, they have a very clean and easy-to-use interface, which is the reason why it is so popular among beginners.
However, there are some limitations to this wonderful platform. It supports only 8 altcoins and all ERC-20 tokens.
PROs
- Easy to use
- Highly secure
- Supports major cryptocurrencies
- Well known crypto wallet
CONs
- A limited number of supported coins
- Constant internet connection is required
- Expensive
6. Trezor
Trezor is another hardware crypto wallet that stores your coins offline. It stores your coin on a removable device that can easily be plugged into your phone or desktop.
The services provided by Trezor is one of the best in the industry. It supports more than 1000 cryptocurrencies.
Also, this company takes the security of their user’s account very seriously which is why the wallet they’ve developed holds the title of ‘the safest cryptocurrency storage device’
PROs
- Top-notch security
- Supports storage of 1000 cryptocurrency
- Easy set-up
CONs
- Bulky Design
- Expensive
7. SoFi
SoFi started its business by providing student loans and brokerage services, they added crypto trading services in 2019. Users can trade various cryptocurrencies like Bitcoin, Ethereum, Ethereum Classic, Bitcoin Cash, and Litecoin.
The minimum amount of cryptocurrency which you need to purchase is $10 and the maximum is $50,000 worth of crypto per day. SoFi charges a 1.25% transaction fee and a minimum deposit of 10$ to maintain an account.
It is important to note that SoFi is an investment platform so you will not be able to transfer the crypto you have bought to an external wallet nor can you use it for purchasing stuff online.
PROs
- You can manage your crypto assets and other investments through the same account.
- Additional finance tools for customers
- Decent security
CONs
- The very low number of cryptocurrencies.
8. Robinhood
Robinhood is infamous for the privacy breach of its users and zero anonymity options for its users, no wonder why this wallet is not well-known among the masses.
However, it’s not that this wallet only has negative qualities about it. Some of the good features offered by Robinhood are it is very simple to use and it also supports almost every well-known coin.
The coins supported by Robinhood are- Bitcoin, Bitcoin Cash, Bitcoin SV, Ethereum, Ethereum Classic, Litecoin, and Dogecoin.
Also, Robinhood has a pretty good security system. They offer two-factor authentication and you can also add some custom pin codes in order to get an additional layer of security.
PROs
- User-friendly interface
- Accepts fiat currency
- Decent security
CONs
- No anonymity
- You do not own your private keys
- Very limited range of cryptocurrency
- No transparency regarding fees
FAQs
We have answered some most frequently asked questions below.
1. How to use a Bitcoin Wallet?
Crypto wallets are similar to your bank accounts. Just like you store fiat money in bank accounts and secure it with a password, similarly, you can put any cryptocurrency like Bitcoin, Ethereum, ZCash, etc. in a crypto wallet.
Some crypto wallets on this list are solely for the purpose of storing cryptocurrencies while others provide a built-in exchange to purchase and sell cryptocurrency directly from their platform.
We recommend you download any cryptocurrency wallet only from the official website of the respective wallet or from the google play store or App store.
2. How much does a bitcoin wallet cost?
Usually, Bitcoin wallets don’t charge you for using their services. However, if a wallet provides exchange services then you might need to pay some transaction fees or a small portion/percentage of the total cost.
3. Which Bitcoin wallet should I choose?
Frankly speaking the type of wallet you need to choose totally depends upon your requirements, whether you need complex crypto storage or a user-friendly wallet that guides you through every step of your transaction.
Every bitcoin wallet differs by security, level of privacy, anonymity, user interface, fees, built-in services, etc.
While online wallets (hot wallets) are suitable for people who frequently use crypto for payment, offline wallets (cold storage) are best suited for users with less frequent crypto transactions.
We would also like to add that online wallets are less secure as compared to offline or hardware wallets.Some additional questions you could ask for evaluating a crypto wallet are:
- How many types of cryptocurrencies can be stored on the wallet?
- Is the wallet open source?
- Does the wallet provide transparency in transactions?
- What are the community review of this wallet?
- Always check for any fees charged by the service provider.
We recommend you check every aspect of your wallet carefully before opting for any of them.
4. How do you cash out uour Bitcoin Wallet?
Cashing out your bitcoins is very simple. Well, you cannot convert your bitcoins directly into Fiat money but you can sell it on the blockchain.
And due to the immense popularity of bitcoins, your sell order will be immediately executed. In order to sell your Bitcoins, you need a medium of exchange, and cryptocurrency exchange is that medium.
A cryptocurrency exchange can easily find the best deal for your coin in exchange of a certain sum or commission. Also, the trade executed can take up to 1 to 3 business days to reflect in your account.
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Conclusion
That’s it. We have completed our list of top 8 crypto wallets and we hope you must have gained some insight on different types of crypto wallets available and their features.
While there are many different ways to store your cryptocurrency the major question is: where are the keys?
With a hosted web wallet you trust your keys to a third party with the assurance that you can get access to your account even if you forget your password. But they always pose a third-party risk and security breach.
With a desktop, hardware, or paper wallet you own your private keys which cannot be accessed by any other.
This seems to be the best way to keep your cryptocurrency secure but unfortunately, this method too poses some risks.
If your computer happens to break down or in case you don’t remember your password or your backup phrase you will never be able to access your funds again.
This could be seen as a double-edged sword. We don’t intend to scare you but warn you regarding the risks this type of wallet holds.
Always read multiple articles and reviews regarding the product and try to connect with users who have actually used that product in order to know the real deal.
The world of cryptocurrency intends to give you power over your money, but with great power comes great responsibility.