Complete Guide for Bitcoin Wallets

26/07/2021 | Categories: Bitcoin Guides | Published by: cmk4 | Last updated: 01/04/2022

What is a Bitcoin Wallet?

Anything that allows you to store your Bitcoins is a Bitcoin Wallet. It might be software, a mobile app, a web service, or even a hardware device that stores your private and public keys and allows you to receive and spend your Bitcoins. A warm welcome to all the GOSUS as today, we are going to discuss in-depth how to choose your Bitcoin wallet. Not just that, we will also talk about the different types of wallets that are available and what benefits one offers over others.

Different Types of Bitcoin wallets

Web Wallets

These wallets run on the server of the wallet provider and users can access the wallet through their browsers. The biggest advantage of web wallets is their availability and ease of use. While some web wallets store and securely manage your private keys on their end, some allow the users to manage their keys.

Some of the most common Web Wallets: Coinbase Wallet & Blockchain.com wallet

Advantages:

Convenient and Easy to Use
No consumption of data & time to synchronize the wallet
Access from anywhere

Disadvantages:

Some web wallets don’t give you access to private keys. And there’s a simple rule in crypto – If you don’t have the private keys, you don’t own the coins.
Limited functions as compared to the core wallet

Software/Desktop Wallets

These wallets are downloaded and installed on your computer. They offer a much higher level of security since you control the keys. Because they are installed on your computer, you must ensure that the computer is free from any viruses.

Some of the most common Software Wallets: Bitcoin Core (recommended), Armory, Electrum

Advantages:

Access to Private keys
Complete control and access to features like signing a message from your Bitcoin address and setting the transaction fees
High security

Disadvantages:

Prone to hacking and viruses on your computer
With more control comes even more responsibility like setting the right transaction fees.
Corrupted wallet files for any reason may result in the loss of your coins unless you have a backup

Hardware Wallets

Hardware wallets are among the most secure type of wallets because they store your private keys on the hardware. Because the keys are stored on hardware, they are usually immune to hacks and viruses that may exist on your computer. These are compatible with web interfaces that allow you to do transactions.

Some of the most common Software Wallets: Trezor One & Ledger Nano S

Advantages:

The private key is not exposed
Immune to viruses and hacks

Disadvantages:

Comes at a certain cost
If you lose the hardware device, you will have to wait until the new one is delivered to you.

Dos and Don’ts when choosing a wallet

1. Never use an exchange as a wallet. There are 2 basic reasons for this:

Exchanges often get hacked and some even scam
With so much emphasis on KYC, you might not want to give your documents online and without KYC the exchanges might not allow you to withdraw.

2. Don’t use casino sites as wallets for the same reasons.

3. Always prefer wallets that provide you the private keys for your coins.

4. If you are using online web wallets and the platform permits, always use 2FA and make sure the website uses HTTPS.

5. Lastly but crucially, always backup your wallet.

Conclusion

The type of wallet depends on the requirement of the individual so it’s hard to recommend a wallet for all needs. If security is your primary concern you shall go for Hardware wallets or Paper Wallets, although we haven’t discussed paper wallets in the guide because you might end up getting scammed by a fake paper wallet provider. If you want to receive and spend Bitcoins multiple times a day, we recommend using the software or web wallets. Please do your careful research when choosing your wallet and if you have the slightest doubt regarding anything, please comment below and let us know.