Best Bitcoin Wallets (UPDATED 2018): Bitcoin Wallets Reviews | VKOOL

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Bitcoin has been getting more and more press lately, with a dramatic increase in value since last January, plus more support from big institutions (like Bank of America and the New York Stock Exchange), and notable celebrities like the Winkelvoss Twins supporting the cryptocurrency. Now more than ever, people want to get aboard the hype train.

But you can't just jump aboard without taking the proper precautions. After all, you wouldn't carry your credit cards loose in your pockets, would you? Hackers can steal loose Bitcoins, and you could even lose them yourself. What you need is something to keep your Bitcoins safe. What you need, my friends, is a wallet.

Types of Wallets and What They Do

First off, let's cover the different kinds of Bitcoin wallets, so that you can figure out which one is right for you. If you're new to this sort of thing, don't worry: everything in this guide is written for the layman, so that even if you're never heard of cryptocurrency before, you should be on the same page as experts who have been in the field for years.

There are three main kinds of Bitcoin wallets: paper wallets, software wallets, and hardware wallets. In a nutshell, paper wallets are documents with keys printed on them, software wallets are programs that contain your records, and hardware wallets are physical things that contain encrypted keys.

Each of these different kinds of wallets comes with its own advantages and disadvantages, all of which we'll go into in the following sections.

Paper Wallets

Paper wallets have one thing going for them: they can not be hacked. Since they're not connected to a system, a thief would have to physically get their hands on the wallet to get access to the information. In that way, it's like cash or precious stones.

Or is it?

It's actually not as safe as that. A thief can't take a photo of a stack of hundreds and then use that photo to assemble wealth for themselves (unless they were a master counterfeiter). But all a hacker needs is an image of your paper wallet's key and they can have instant access to it. Also, some programs for creating keys for paper wallets can be easily exploited to reverse-engineer the keys for hackers to use for their own purposes.

For that reason, we can't recommend people use paper wallets for Bitcoin. The risks just outweigh the advantages by too much.

Software Wallets

Software wallets are a massive step up from paper ones, because they have all sorts of advantages that paper wallets don't. For one, they're convenient because you don't need to physically store them anywhere. Not only that, they can be accessed from any computer that's connected to the Internet, so no matter where you are in the world, you can access your wallet whenever you like.

Unfortunately, that's also their disadvantage: a talented hacker could worm their way in and steal your keys if you're not protected.  They're easy to set up and (generally) cost you nothing, making them very attractive for beginners in the world of cryptocurrency, but again, that's also one of their drawbacks: ultimately, they're controlled by a third-party company. These companies may have tight security, but one screw up by them could end up with you (and everyone else) losing huge amounts of money.

All the same, let's look at one of the better choices of software wallet: Coinbase.

Coinbase at a Glance

Coinbase is a great place to start for those who are new to Bitcoin. Why? It's popular, it's easy and it's fast. It's a one-stop shop for all your Bitcoin needs, a platform where you can not only buy and sell, but also store your Bitcoins (or fractions thereof), making it extremely flexible.

For all its popularity, you'd think it was a popular target for hackers. While that may be the case, Coinbase has taken a lot of precautions to put your worries at bay. First, Coinbase is insured (like a bank), meaning that if you ever lost any money to theft from their platform, you'd be covered. In another bit of good thinking, Coinbase keeps only 2% of their customers' funds in the cloud, with the rest of it being stored on hard drives, meaning that 98% of all funds kept by Coinbase are untouchable. Big thumbs up for that.

They're also one of the more legitimate services, being supported by the New York Stock Exchange and Lloyd's of London, in addition to having had tens of millions raised in capital from investors. They're also insured by the FDIC for up to $250k, in case you're an American investor in Bitcoin.

For ease of use, your Coinbase account is accessible not only through a web browser, but also through apps for iOS and Android.

For the person just getting into Bitcoin, Coinbase is one of the fastest, easiest, and most convenient way to get started.

What About BlockChain.info?

You might have heard about Blockchain.info, another online wallet, but before you decide to go with them, we wanted to make sure that people know some things about them. First of all, while they do have good security, they've had power outages that have affected their servers. While no data was lost, it rendered Bitcoins inaccessible for periods of time.

Hardware Wallets

This is where things get serious. Not bad-serious, but professional-serious. If you want the best protection from theft, hardware wallets are the way to go.

The only way a thief can get access to your information is by hacking their way through software defenses and gaining remote access, but to do that, they need a connection. Unplug your computer, and hackers cannot hack. The same principle goes for hardware wallets: since they're unplugged from anything and everything, they are impossible to touch.

The main drawback (to some) is that hardware wallets cost money, unlike free software wallets. This sort of upfront cost might make some people shrug, but for those who value their data and are a little anal about security, it's the only way to go. Let's look at some options you could go with:

Ledger Nano S

The Ledger Nano S is one of the better hardware wallets on the market. It's slim, minimalist, and to the untrained eye could pass for a normal flash drive.

It's also incredibly secure, even more than other hardware wallets. While it's true that all hardware wallets are safest in the sense that they're not connected to any servers and can't be hacked, they can still be filched the old-fashioned way: by someone physically stealing it.

But don't worry, Ledger has you covered there: the wallet comes with a security PIN option to gain access, and if someone steals it and enters the wrong PIN three times in a row, the Ledger formats itself and erases all of its data, making it worthless to the thief.

After that, all you have to do is recover your keys through their secure backup service, and all it right again. It's a hassle, but it's better than losing your precious currency forever.

All that protection for only $99? Sign us up! That is, when it finally comes out – after March 18, 2018.

Trezor

Trezor is another hard wallet that comes with the same safety guarantee as a private, disconnected place to hold your keys, but it has one option that Ledger doesn't have: you can spend your Bitcoins with it.

Just having a place to hold your Bitcoins doesn't mean you can automatically use them, or spend them from that wallet. With Trezor, however, you can. All you need to do is plug it in via its USB connection – which can't be hacked, since it's only a one-way connection from the Trezor to your computer – and voila: you can sign off on a transaction using a digital signature.

It doesn't come with any passwords or usernames – all you need is the device, like having a physical door key – so unless someone physically takes it from you, you've got no worries about being hacked.

Trezor's other advantage is that it's available right now – you can even pick it up from Amazon – but it's also more expensive than Ledger Nano at the hefty price of $200 (you can find it for slightly less, other places). But can you really put a price on security? We think not.

Frequently Asked Questions

  1. What are the pluses about hardware wallets for Bitcoin?
    They're disconnected from any and all systems, meaning they're not just lying around for some hacker to steal them. Instead, only you have access to it and only you have control over when and where you use it – as long as you don't lose it.
  2. Can I download a Bitcoin wallet?
    Many software services have a download component for their wallet, but the data itself is going to be stored most likely on servers controlled by the company that hosts your wallet.
  3. Can I read about Bitcoin wallets on Reddit?
    Yes, there are dedicated subreddits not only to Bitcoin wallets in general, but also to specific ones – paper, software, and hardware alike.
  4. Where can I read reviews of Bitcoin wallets?
    In addition to some of the review here, you'll be able to find reviews of Bitcoin wallets on lots of different tech and crypto-oriented blogs and websites.
  5. What are different ways to login to your wallet?
    Depending on what sort of wallet you have, you might not even need a login. While all software wallets will have some sort of username and password requirement to gain access to your wallet, some hardware wallets like the Trezor require no login information at all.
  6. What is a Bitcoin wallet address?
    An “address” is a unique string of numbers and letters that works like a bank account routing number. Giving it out lets others send Bitcoins to you, and you can have any number you wish.
  7. How do I create a Bitcoin wallet?
    That's a little more in-depth. To do that, you would need to code a program that is secure enough to host and transfer sensitive information in a quick, safe way. Then you'd have to connect it to the Bitcoin community.
  8. What is the best online Bitcoin wallet?
    Each person's needs are going to be different, but we suggest Coinbase as a good starting place for anyone looking to get into Bitcoin. It's safe, secure, dependable, and has a large following.
  9. Is there a Bitcoin wallet for Android?
    Coinbase has an app for Android, and many other online wallets that have app-versions of themselves will usually have an option for Android users to download, in addition to iOS users.
  10. What is the best free Bitcoin wallet?
    Nearly all online Bitcoin wallets are going to be free, so if you want to save money, you can forego using a physical wallet and focus on the litany of different online software wallets out there. Most of them do not have a sign-up fee, but make their money in other ways, such as by putting a fee on transactions or transfers.
  11. What is a Bitcoin QT wallet?
    It refers to a Bitcoin wallet that was made with QT, a user-interface framework for software developers who use C++ as the coding language.
  12. What is the best Bitcoin wallet, according to Reddit?
    You're going to get a lot of different answers, there. The best course of action would be to check out a number of Reddit subreddits dedicated to different wallets, and compare and contrast how users have experienced them.

Conclusion

So there you have it: a short introduction to the world of Bitcoin wallets and some of our personal preferences. Armed with this little guide, and a little research into the vagaries and mysteries of the exciting Bitcoin boom, and you're set. Who knows? If you play your cards right, you could find yourself sitting on loads of crypto, and with even more places and services accepting Bitcoin as payment, you could find that your investments have paid off.

Peter Lehmann

Peter is a blockchain investor and cryptocurrency writer at Vkool.com. Since 2014 Peter has advised blockchain startups and ICOs on content marketing, strategy and business development.

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