Types of Bitcoin Wallets
Before you learn how to get Bitcoin you should first set up a place to store it, which is called a Bitcoin wallet. Strictly speaking you do not store your Bitcoin in the wallet, but rather store the secure digital keys, which are used to access transactions connected to your public Bitcoin address(es). There are several different wallet options, with multiple options for mobile devices, your computer’s desktop, or online. We recommend you use the safest and most secure type of wallet to store your Bitcoin. Below is a comparison chart of some of the most popular methods of Bitcoin storage.
Basically apps on your smartphone, mobile wallets are a great option for when you need to pay for something on the go. They are not full-scope Bitcoin clients, because they cannot download multiple Gigabytes of Blockchain data (well, technically they can but your data bill would be huge, and all of the storage space on your smartphone would be taken up with the contents of the Blockchain, which is always growing). Mobile wallets download a very small amount of Blockchain and rely on the Bitcoin network to sync the information.
Desktop wallets are diverse, and sometimes target different aspects of Bitcoin. If your main focus is anonymity then DarkWallet uses a system whereby they ‘mix’ the coins to prevent people from tracking them. MultiBit is a diverse client that runs on all common operating systems, such as Windows, Mac, and Linux. Bitcoin Armory is known for its enhanced security. Electrum is also a great option for a desktop wallet.
Online wallets are one of the most convenient ways to store Bitcoin because they are accessible from anywhere with an internet connection, but the convenience comes with a few drawbacks. Choosing a correctly-implemented web-based wallet is essential to prevent your Bitcoin being taken out of your control by giving someone else charge of your private keys. It is essential to choose an online Bitcoin wallet with a solid reputation.
Paper wallets contain private and public keys, which is what wallets are usually made of. They may have QR codes on them so that they can be scanned, and the transactions recorded through software wallets. A paper wallet is the cheapest way to keep your Bitcoin safe. It is also the most common. It is also the safest method because your public and private keys are not stored anywhere electronically, so your Bitcoins are safe should a website hosting an online wallet, or a computer with wallet software get hacked. However, like with every piece of paper there are some drawbacks. Ink fades, paper crumbles, and pieces of paper get lost. Once your paper wallet is gone, it’s gone. You will not be able to access your Bitcoin again.
You can make a paper Bitcoin wallet yourself! Generate a Bitcoin address through BitAddress.org, select Paper Wallet, and then print it. Blockchain also offers an option to make a basic paper wallet. Be sure to store it securely to minimize wear and tear.
Hardware wallets are small handheld devices, which store private keys and facilitate payments. They are extremely limited in numbers and are not as popular with the average Bitcoin user. Trezor is an example of a hardware wallet, and it is one of the most secure ways to store your Bitcoin. Ledger Nano S is another great option for crypto storage.