Bitcoin is a digital currency that only exists on the internet and not as a physical currency. This means that you need to store Bitcoins online or on a computer instead of in your wallet or on a credit card. On this page, we will talk more about the different storage options and what’s usually called Bitcoin wallets. We will also recommend some of the best wallets and give you tips on how to keep your personal information and your Bitcoins safe.
What is a Bitcoin Wallet
One of the biggest issues with Bitcoin and other digital currencies is that they are fairly easy to copy and possibly even steal from other users. This has created a need for a safe and reliable way to store them. Luckily enough, there are a few different options to choose from and if you practice a little bit of caution it will be easy to keep your Bitcoins safe.
There are three different ways in which you can store your Bitcoins – three different types of Bitcoin wallets.
The first option is to create your own Bitcoin wallet and keep all your Bitcoins on your computer. A self-hosted Bitcoin wallet is essentially just a folder on your computer where you save your Bitcoins and other digital currencies. By using this option, you will be in charge of keeping your Bitcoins safe. However, this is one of the most unsafe ways to store Bitcoins.
If your computer breaks down or if you’re hacked, there is a high risk that your Bitcoins would disappear. Furthermore, since there is no way to insure your Bitcoins you would lose them. Because of this, we recommend that you always keep copies of your Bitcoin in multiple locations even though this adds to the risk of them being copied. In our opinion, the best option is to combine this type of Bitcoin storage with the two options we mention below.
You can also store your Bitcoins in a hardware wallet that only you have access to. A hardware wallet is a small device that gets connected to your computer and that is only used to store Bitcoins. They usually look like a flash memory or a small external hard drive. This option costs money and can be somewhat complicated to use for people who aren’t tech-savvy. In some ways, it also makes it harder to use the Bitcoins since you can’t make transactions directly from the hardware.
The second option is to store your Bitcoins with a Bitcoin company that offers a so-called e-wallet. You have probably heard about the biggest e-wallet of them all, PayPal. And even though PayPal can’t be used for Bitcoins, the principle for these digital currency wallets is the same.
You keep your Bitcoin on a server that belongs to a company and it is their job to keep your investment safe. It is more practical than the first option but it is essential that you trust the company. Too often we hear about people using unreliable companies that end up stealing their customer’s Bitcoins.
Most companies that sell and buy Bitcoins also offer Bitcoin wallets in one shape or another. Therefore, the best option is to stick with whoever you bought the coins from. We have a list of recommended and reliable Bitcoin wallets further down on this page.
A hybrid Bitcoin wallet is pretty much a combination of the options we mentioned above. With this option, you store your Bitcoins on someone else’s server and they are in charge of keeping the server safe. However, they don’t have access to your Bitcoins which means that they can’t steal them. This is obviously a very safe way of storing your Bitcoins but there is still some risk involved.
When you keep your Bitcoins in a hybrid Bitcoin wallet, you protect them with a password. The password is personal and it can’t be changed or updated which means that if you forget the password you also lose your Bitcoins.
In the end, it is up to you to decide what option fits you best. In our opinion, a combination of two or three of the above-mentioned systems is usually best for storing Bitcoins. We have recommended a handful of wallets below and they are generally all safe and reliable. Unfortunately, there is never any guarantee that a company will honor their agreement with you, which is why it’s important to trust your gut feeling.
Recommendations of the Best Bitcoin Wallets
As you can imagine there are many different Bitcoin wallets to choose from on the market. They all have their pros and cons, and it is up to you to decide which one you prefer. However, in order to make your decision easier, we have decided to recommend four of the best Bitcoin wallets out there.
These four options are, in our opinion, the best Bitcoin wallets right now but that doesn’t mean that you can’t use other companies as well. Just be careful, do your research, and only use wallets with a good reputation.
Coinbase – Coinbase is the largest provider of buy and sell services for Bitcoin and other cryptocurrencies. They have hundreds of thousands of customers in 19 countries and a spotless track record. Using Coinbase is a practical solution since you can also buy and sell your coins with them.
With a basic Coinbase account, your Bitcoins are fully accessible to Coinbase which could be risky. Recently they released an extra feature called Vault that lets you store your Bitcoins on their servers. Your Bitcoins are stored with your own password, meaning they are not accessible to Coinbase. Because of this, you could consider Coinbase a semi-hybrid Bitcoin wallet that can be adjusted to your needs.
In addition to Bitcoins, you can also buy, sell, and store Ethereum (Ether) and Litecoins with Coinbase.
Bitcoin Wallet – Bitcoin Wallet is one of the oldest and most trusted services in the industry for storing your Bitcoins. They offer a unique and decentralized system called “zero trust” that gives the user a lot of control over their own coins. The company is highly transparent and extremely secure making it one of the most attractive web-based Bitcoin wallets out there right now.
Blockchain.info – Blockchain.info is a hybrid Bitcoin wallet and the single most used service on the market. By using blockchain.info, you can access your Bitcoins through your computer or smartphone. They also offer a simple user interface that is very beginner friendly. This is a good e-wallet to start with if you are new to cryptocurrencies or if you want a wallet that is very easy to use.
Jaxx Bitcoin – Jaxx Bitcoin is a platform that can be used for both Bitcoins and Altcoins. It’s self-hosted which means that you are in charge of your coins. You are also able to exchange your coins for several different currencies within the wallet, which means that this is a one-stop-solution for everything related to Bitcoins.
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