With the popularity surge that the crypto domain has seen in the past year, it is not unusual to meet casual investors who have purchased a small amount of BTC. Most of these individuals leave their holdings in an online wallet that is hosted by an exchange, thereby leaving their funds susceptible to hacking.
The hacking of the Mt. Gox exchange is a recent example that springs to mind immediately. In that particular incident, hackers stole over 850,000 Bitcoin, worth nearly half a billion dollars even back then.
Thus, when dealing with larger sums of money, it is best to make use of a private wallet which not only gives you more command over your funds, but also provides more financial flexibility.
However, when choosing a cryptocurrency wallet, investors are faced with many questions such as:
- How do these wallets work?
- Is an online wallet better than an offline one?
- Should I choose a hard, soft or paper wallet?
What to look for in a cryptocurrency wallet
Today, with the blockchain at the forefront of digital innovation, we have a host of options when it comes to selecting cryptocurrency wallets. However, depending upon our needs and requirements, we can choose between various storage solutions that differ in terms of security options, accessibility, etc. Some of the key areas to consider when choosing a wallet include:
- Platform Compatibility: there are Bitcoin wallets that can be operated on Android, iOS, Mac, and Windows devices. Thus, it is important to choose one that you can make use of most easily.
- Security Options: this is the most important aspect to consider. Many modern wallets offer customers a wide array of advanced encryption tools that allow for varying degrees of monetary safety.
- Price: depending on the amount of crypto one possesses, one can choose between various free and paid wallets. Both have their advantages, but paid ones usually come loaded with additional security features.
(i) Hot Wallet: these are wallets that are always connected to the internet in one way or another. They are installed on mobile phones, downloaded on computers, or hosted by third-party websites. Hot wallets are most commonly used by online exchanges, and they are also the most susceptible to external intrusion.
(ii) Paper Wallet: these wallets do not require users to be connected to the internet. When utilized, hackers cannot gain access to one’s private keys, thereby allowing for a high overall level of security.
(iii) Cold Wallet: these wallets come most commonly in the form of hardware units that are designed to store one’s private keys. They allow for the easy exchange of various alt-currencies, and can be used by simply plugging them into a computer. Hardware wallets provide a high level of security, and are able to store currencies safely even if one’s computer is infected with malware.
The top Bitcoin wallets of 2018
Electrum was one of the first Bitcoin-exclusive wallets to hit the market a couple of years back.
It is compatible with standard desktop computers as well as Android devices. From a functional standpoint, Electrum delivers on various fronts including:
- Highly stable platform
- Speed of transactions
- Good security options
- Compatible with Ledger and Trezor wallets
Exodus is a free software wallet that has become extremely popular among Bitcoin holders within the past year.
It comes with a built-in crypto exchange that allows for seamless trading of all alt-currencies from one location. However, Exodus is currently only available as a desktop wallet.
Jaxx is a Bitcoin software wallet that was made particularly for use on smartphones. It allows for amazing crypto mobility, without any of the risks attached to regular hot wallets.
In terms of its usability, Jaxx is compatible with iOS, Android, and desktop computers. It provides users with incredible control over their private keys, and it also allows for quick QR transactions to be executed with the touch of a button.
Other impressive features that this wallet boasts include:
- Shapeshift integration
- Good smartphone compatibility
Trezor is a hardware wallet that is ideal for storing large amounts of Bitcoin. It incorporates high-quality security features along with all of the benefits that are commonly provided by web-hosted wallets.
In terms of its usability, Trezor has an intuitive UI that can be used by novice and expert users alike. It also supports a wide range of altcoins and is compatible with other external wallets as well.
Mycelium is a mobile wallet that comes packed with a plethora of advanced privacy and security features. While its interface can take some time to get used to, it is undoubtedly one of the safest wallet options on the market today.
Mycelium’s code is open source, and it’s of particular use for people looking for a high level of anonymity in their crypto dealings.
Armory has established itself as a favorite among advanced Bitcoin users. The app offers a wide array of safety and privacy features that are not commonly found in wallets today.
It also comes loaded with many encryption and cold-storage options that provide users with good financial flexibility.
While quite similar to Trezor in its design and features, Ledger is a cold wallet that has been made for customers who are looking for an increased level of security.
Ledger is a hardware unit that needs to be connected to a PC in order for transactions to be executed. Ledger is extremely user-friendly and provides a high level of privacy.
When it comes to crypto safety, one can never be too careful. All of the wallets described above contain features to satisfy the needs of advanced and novice users alike. However, before choosing a wallet, it is of the utmost importance that users do a bit of research on their own, as it involves their own hard-earned money.