Once you decide to start trading or investing in Bitcoin, you need to take care of your cryptocurrency’s security straight away and choose the best wallet option. There is no shortage of Bitcoin blockchain wallets on the market, and it’s in your best interest to understand how they are different from each other and which one suits you the most.
But before we start to slice and dice, there is one thing that we want to mention. Security is the main characteristic of your soon-to-be best Bitcoin wallet and you must take it seriously.
You want to use an HD wallet that creates a new Bitcoin address for every transaction. It should also be client-side and store no data on servers, providing you with the full ownership of your private keys and cryptocurrency funds.
Types of Bitcoin Wallets
- Bitcoin hardware wallets
- Bitcoin paper wallets
- Bitcoin desktop wallets
- Bitcoin online/web wallets
- Bitcoin Android & iOS wallets
1. Hardware Wallets
Hardware wallets are often called the best option in terms of safety because they store your cryptocurrency offline. You need to buy the device first and figure out how to use it. Hardware wallets look like regular USB drives: you just connect them to your PC via cable or Bluetooth.
Although very safe, hardware wallets aren’t the best pick for those of you who plan on using Bitcoins regularly and prefer to seal their deals fast. And obviously they aren’t free.
2. Paper Wallets
Let’s get straight to the point: Bitcoin paper wallets are not the best Bitcoin wallet option, to say the least. This way of storing Bitcoins suggests generating a Bitcoin address together with a private key, printing it out, and using it when necessary.
Clearly, your comfort is out of the question. You will have to print out a new address every time you need to make a transaction and let’s be honest here: with all the innovations that blockchain technology promises, printing a wallet to store your Bitcoins seems like a relic from the past.
3. Desktop Wallets
A bitcoin desktop wallet is a software that you download to your computer. This way it provides more security and allows you to store your private keys independently.
However, there is a serious downside to them: your only option is to manage your Bitcoin assets via your computer, which is not always convenient or even possible.
4. Online/Web Wallets
Bitcoin online or web wallets are more universal in terms of mobility rather than the Bitcoin wallet types we’ve mentioned above. You can log into your Bitcoin wallet account on any device whether it’s a phone or a laptop.
However, make sure the online cryptocurrency wallet that you use is client-side and doesn’t keep your private keys on servers that can potentially be hacked. Don’t fall into the trap of holding your Bitcoins on exchange wallets either – that’s as risky as it gets.
Lumi Web Wallet is a safe online wallet that leaves you the sole owner of your private keys and Bitcoins.
5. Android & iOS Wallets
Bitcoin mobile wallets come in the form of an app which you can use to manage all of your cryptocurrency transactions. Typically, they are anonymous and client-side and you remain the only person in charge of your funds, but it wouldn’t hurt to double-check.
Cryptocurrency wallets like Lumi Wallet, BRD, or Jaxx are on the safe side.
What is the best type of Bitcoin wallet?
For an average cryptocurrency user that works with Bitcoin on a regular basis, the best wallet alternative is the one that is universally available. This way, the user can get access to their funds immediately and via any device.
That being said, in no way do we encourage you to use very risky online exchange wallets as they seriously compromise your security.
If you’re not a trader but rather, are interested in investing into various blockchain and cryptocurrency projects, a client-side wallet that has both a mobile and web version is one of the best solutions.
Now, let’s review what else you should bear in mind.
Best Bitcoin Wallet: Things To Consider
We have already mentioned that the best Bitcoin wallets are the most secure ones. Now let’s dig deeper.
What happens if you lose or break your mobile phone? Are you going to lose all the Bitcoins that you own? Of course not!
All your previous transactions are already recorded on the blockchain and in order to recover your funds you typically have two options.
- Recover Bitcoins with private keys
- Recover Bitcoins with mnemonic (seed phrase)
It’s really important that you write down this seed phrase elsewhere rather than your phone so you will be able to get your wallet account back. Unfortunately, many people don’t know or simply forget about that. Lumi Wallet will keep on reminding you to write your mnemonic down until you do so.
A decent blockchain wallet is normally equipped with Face ID and fingerprint protection. It works not only for your comfort but also helps to protect your Bitcoins from third parties.
Blockchain is all about privacy and anonymity. You probably don’t want to share your sensitive data with strangers and a blockchain wallet is no exception.
The best wallets won’t ask you for any information upon registration, unless you want to use your credit card to buy Bitcoin. In this case, anonymity is out of the question.
Wallet Ease of Use
When it comes to usability, many wallets lose the battle. However, it is almost as important as the safety. Why would you use a Bitcoin wallet when it’s confusing and figuring it out is time consuming?
We’ve put a lot of effort into making the Lumi Web Wallet and our iOS and Android apps intuitive. Lumi allows you to manage multiple currencies (both cryptocurrencies and fiat), set manual transaction fees when necessary, and execute transactions in just a few taps.
Additional Useful Features in Your Bitcoin Wallet
Not only blockchain beginners, but also more experienced users often find it helpful when their Bitcoin wallet is equipped with an exchange. When you decide to diversify your cryptocurrency portfolio, you can just exchange your Bitcoins for other coins or tokens directly in the wallet.
And if you want to forget about exchanges completely, some wallets (Lumi Wallet included) offer an additional service for buying Bitcoin with your credit card.