There are more types of bitcoin wallets than people think. Let’s find out the pros and cons of each wallet and what should you use.
Before we jump into the world of Bitcoin wallets…
Is using a digital currency exchange(DCE) wallet the same as having a wallet of my own?
A lot of people buy Bitcoin on a DCE such as Upbit, Coinbase, Binance, and just leave the Bitcoin in the DCE wallets. But technically, those wallets are not really yours.
You may not know, right? Is this a totally new term for you? Then the wallet doesn’t fully be-long to you. Because the only way you can access your own wallet is with a user ID and password on DCE.
In order to fully control and securely store your Bitcoin, you are probably going to need a proper wallet. Now, let’s dive into the world of Bitcoin wallets!
Hot Wallets and Cold Wallets
What are hot wallets and cold wallets?
First of all, every Bitcoin wallet is categorized as either a “Hot wallet” or a “Cold wallet.” The difference is really simple. A hot wallet is connected to the internet and a cold wallet is not.
Examples of hot wallets:
- Digital currency exchange wallet (Upbit, Bitsum…)
- Web wallet (Coinbase..)
- Mobile wallet (Green Wallet, Blue Wallet…)
- Desktop wallet (Electrum, Exodus…)
Examples of cold wallets:
- Hardware wallet (Trezor, Ledger Nano..)
- Paper wallet
• Hardware wallet (Trezor, Ledger Nano..)
• Paper wallet
Examples of Bitcoin wallets
1. Web Wallet (HOT)
So they’re easy to access, and convenient for transactions and Defi. However, due to the nature of web services, the risk of hacking or scams is pretty high. Most of them come with a Crypto Exchange platform as well. The recommended sites are as follows.
But considering the relative risks of these wallets, I highly recommend that you use 2FA(Two-Factor Authentication) for your security.
2. Mobile Wallet (HOT)
Mobile wallets are apps that run on your smartphone to store and control your bitcoin funds. With mobile access, you can conveniently check your wallet and transfer cryptocurrency anywhere, anytime. Two-factor authentication is also strongly recommended for security.
Here are my recommendations:
I personally think Blockstream Green is the best. Super strong security and very intuitive. It has all of the key features. Exodus has a pretty cool UI design as always. If privacy is the most important thing for you, a Samourai wallet would be the answer.
3. Desktop wallet(HOT)
Desktop wallets are installed on a desktop or a laptop at your home. Unlike smartphones, these have a lower risk of getting lost. However, they are also connected to the internet, there is always a possibility of hacking. So don’t forget to install a vaccine program above Internet Security and keep it up to date!
Here’s a list of desktop wallets:
In terms of design, Exodus is the best. It has a chic, cyber-like look which sets the perfect vibe for increasing your assets, lol. (I always recommend this wallet for beginners.) The wasabi wallet values privacy the most. It’s similar to the Samurai Wallet, the mobile option mentioned in the list above. (I recommend this wallet for advanced users!) Electrum was made by MIT and is fast and robust, but the design is not attractive. Bitcoin Core can down-load a full node, so you could become a validator. You get to feel like an important part of the Bitcoin ecosystem.
4. Hardware Wallet (COLD)
I recommend this type of Bitcoin wallet the most. A private key is stored on a small device with a connected USB. It only needs to connect to your computer when you make a transaction, and the rest of the time it stores your assets safely offline. It is a must-have item for “HODLERS” (long-term Bitcoin holders).
Here’s the list of recommended hardware wallets below.
Each wallet is slightly different, but in general, one-time receiving address generation, PIN lock, 2FA security authentication, fee customization, etc. are provided.
Trezor and Ledger Nano are commonly used products. FYI, Ledger has a history of custom-er information databases getting hacked. It is not that the wallet’s security is flawed, but there were widespread accounts of phishing due to leaked customer information. (Related articles, Official website phishing attacks warning) We’ll move on from that since it’s not a problem with the Bitcoin wallet itself, but it’s a little sketchy, so just be aware of that before making a decision.
If you don’t want to stress over it, just buy Trezor. It’s simple and good.
Pick one according to your needs after checking out hardware wallets on the homepage. Just make sure you buy a new product, no matter what. With used products, there is a possibility of tampering. Alright?
5. Paper Wallet (COLD)
This wallet is literally a record that is kept on paper. Crypto sounds like something you must store in an electronic device such as a computer or mobile phone, but isn’t it funny that you can keep it on paper?
You can make something that looks like the picture below. Print it, and keep it in your closet.
- • How to make a paper wallet (bitaddress.org)
Since it will be kept entirely offline, nobody can hack or even access it at all! But now the problem happens offline. If you lose your paper, your house catches on fire, or a burglar takes it, you’re screwed. And though you wouldn’t expect it, someone close to you could easily throw it out or take it accidentally.
Bitcoin Wallet Combination Recommendation
If you buy bitcoin and don’t plan to trade it for several years, storing it in a hardware wallet is the best way. If you have quite a lot of bitcoin, better to spread the risk by splitting it into two or more hardware wallets. Or, if you want to hold it for a long time but at the same time plan to use or trade some of it, use a hardware wallet and a mobile wallet together.
- A hardware wallet to keep big money for a long time.
- A mobile wallet to trade a little money sometimes.
Just like that!
If I had to recommend only one for each type of wallet, then I’d recommend Trezor for hardware wallets and Blockstream Green for mobile wallets.
If you set up your wallet right, it will be easier to manage in the future, so consider carefully from the beginning and store your bitcoins!