Best Bitcoin Wallets

Bitcoin is a cryptocurrency created in 2009 by an unknown person using the alias Satoshi Nakamoto. It’s a digital currency that gets distributed electronically from a decentralized peer-to-peer network. Bitcoin functions independently from governments, banks, and corporations. No central authority controls it.

Although there are many types of bitcoin wallets, the general process of sending and receiving payments is the same.

To send bitcoins:

Know the recipient’s wallet address or QR code and the exact amount you’re sending.

Look for the ‘Send’ tab in your wallet app.

Scan or copy the recipient’s address.

Enter the amount of bitcoins you wish to send.

Click ‘Send Funds’ to initiate the transaction.

To receive Bitcoins:

Look for the ‘Receive’ tab within your wallet to generate your bitcoin address. As a security measure, most wallets create a different address for every transaction.

Share this address with the person who wants to send you bitcoins. 

Yes. Using your wallet to send and receive bitcoins involves paying for specific transaction fees. Transaction fees cover your payment for the mining network that validates your transaction on the blockchain.

Higher costs usually mean faster completion. Luckily, some of the biggest Bitcoin wallets offer fee adjustments. Using a built-in fee estimator, you can customize your transaction fee based on your level of urgency (e.g., priority, standard, or economy).

Desktop Wallet

A desktop wallet is a software that you download and install on your laptop or a local desktop computer. It stores your private keys and transaction details on your hard drive. Using your computer, you can send and receive Bitcoins from other users.

Mobile Wallet

A mobile wallet is an application that you can download on a smartphone to get instant access to your Bitcoins. It allows you to manage your Bitcoins on the move. Additionally, mobile wallets also enable you to make physical store payments through tap-to-pay and QR code scanning.

Web Wallet

Another type of hot wallet that allows quick access to your bitcoin account is a web wallet. Web wallets store your private keys in an online server, usually controlled by a third-party. Some service providers manage the private keys for you while others let you handle your private keys. This type of hot wallet can be used on any browser or smartphone with access to the internet.

There are two types of offline Bitcoin wallets:

Paper Wallet

Paper wallets use traditional paper for storing vital bitcoin information. It could be in the form of a handwritten or printed note containing your private key or seed, and your Bitcoin address. You can also choose to print out your private key and Bitcoin address in the form of a QR code. Some paper wallet providers offer a downloadable code so you can create new addresses and keys offline.

Hardware Wallet

Hardware Bitcoin wallets are electronic devices, usually a custom flash drive, for storing your keys. Public and private keys are generated through a random number generator (RNG). Furthermore, your private keys will never leave the device.

To manage your Bitcoins, you need to connect your wallet to a computer and access your funds through a software. Additionally, some wallets can be connected directly to the trading platform.    

Yes. Most Bitcoin wallets use a seed phrase to back up a private key associated with a specific wallet. The seed phrase is a list of random words representing your private key for recovery purposes should you need to import your wallet to a new device. This is usually displayed when you open a wallet app for the first time. The number of words may vary depending on your provider (e.g., 12-word, 24-word, 39-word).

Backing up your wallet, writing down your seed phrase, and storing it in a secure location is extremely important. Without your seed phrase, there’s no way to recover your lost wallet or the funds in it.

Anyone who uses Bitcoins for simple to major transactions needs a bitcoin wallet not just for storing keys but, most importantly, to carry out bitcoin transactions such as sending and receiving bitcoins. Some exchanges also require you to have a digital wallet first before they allow you to buy Bitcoins. Remember, bitcoins are digital — there’s no way to access them without using a bitcoin wallet. 

You can get Bitcoins by buying on an exchange and as payment for goods and services. In the U.S., you can buy Bitcoins legally through government-sanctioned Bitcoin platforms. To register for a digital wallet, you’re required to submit personal documents to verify your identity. You can also mine your own Bitcoins, although this is not practical since mining involves the use of expensive hardware. 

Yes. Many bitcoin wallets support a feature called multi-signature, which allows two or more persons to share a particular wallet. With multi-signature, all cosigners have access to and control over the same wallet. However, transactions can only be executed after the required number of co-signers is reached.

Bitcoins can be used for online and offline purchases as long as the merchant accepts Bitcoin payments. Examples of online purchases that you can pay with Bitcoins are gift cards, video games, bets in online casinos, household goods, and more. Tipping and donations can also be made using Bitcoins. Aside from commercial establishments, many online marketplaces offer a diverse selection of products and services that accept Bitcoin payments.

Bitcoin gold wallets are used for a specific type of bitcoin currency known as bitcoin gold. Although there are many wallets that support bitcoin gold, the digital currency has its official full-node wallet that’s capable of storing, sending, receiving, and mining bitcoin gold.