Introduction: A bitcoin wallet is a digital wallet that lets you store, receive, and send your Bitcoin. Choosing the best bitcoin wallet can be a daunting task as there are many types of wallets to choose from, all with their own set of tradeoffs to consider. In this guide, we will outline different types of Bitcoin wallets so that you can decide which ones make sense to use based on your needs.
A Bitcoin wallet is a digital online or hardware wallet that is used to store, send, and receive Bitcoin. Digital wallets come in the form of cold wallets and hot wallets.
A cold wallet is a digital wallet that keeps users' private keys offline. Unlike hot wallets, cold wallets are not connected to any network and are protected from potential online threats. Cold wallets can either come in the form of hardware wallets like Ledger or paper wallets that just hold the keys.
A hot wallet is a software wallet that is connected to the internet and come in the form of a desktop wallet, browser wallet extension or as a mobile app. Hot wallets are easier to get started with and more practical to use for day-to-day transactions. Having said that, hackers have been known to target hot wallets so users should take extra precautions and secure their private keys offline.
How does a Bitcoin Wallet work?
In order to use a bitcoin wallet, a user must first create a wallet and generate a pair of private and public keys. The public key (aka wallet address) is the address used to receive Bitcoin and the private key is used to sign off on transactions. Public and private keys can be stored in a file or printed on a piece of paper.
To send Bitcoin, the private key must be used to sign off on the transaction. This signature is used to prove that the transaction is legitimate and the bitcoins are transferred from one address to another. Once the transaction is verified on the blockchain, the bitcoins are transferred from the sender's address to the receiver's. The receiver can then use their private key spend the coins.
How do I setup a Bitcoin Wallet?
To setup a Bitcoin wallet you need to begin by choosing a reliable wallet provider. Depending on the type of wallet you choose, you may need to download the wallet onto your computer or another device (phone/tablet). The main types of Bitcoin wallets are desktop wallets, mobile wallets, browser wallets, and hardware wallets.
In this section we provide an overview of the most popular and secure hot and cold wallets, so you can decide which one is right for your cryptocurrency needs.
Best Desktop Wallet for Bitcoin
Exodus Wallet
Exodus has created a secure, intuitive, and simple-to-use desktop wallet that lets users store, send, receive, and exchange cryptocurrencies like Bitcoin. Exodus is a free non-custodial wallet where each user has full control of their funds as no third party has access to the users wallets or private keys.
In addition to Bitcoin, Exodus provides support to securely store over 250 cryptocurrencies including Ethereum, Solana, Cosmos and many others. Exodus also features a built-in exchange that lets you trade between supported cryptocurrencies.
Exodus Platforms
To get started with Exodus, simply follow this step-by-step guide:
Download the Exodus desktop wallet (Windos/Mac/Linux)
Install the wallet and open it
Create a password
Back up your seed phrase some place safe! (Used to recover your wallet)
Best Browser Wallet for Bitcoin
Xdefi Wallet Website
TheXdefi wallet is a free and easy-to-use non-custodial browser wallet that allows users store cryptocurrencies like Bitcoin. The Xdefi wallet never stores your password, seedphrase or other private information.
With Xdefi, users can manage their funds, monitor their portfolio, and seamlessly interact with DeFi dApps. Xdefi is also multi-chain and supports a wide range of digital assets, including Bitcoin, Ethereum, Solana and 12 additional blockchains.
Xdefi is compatible with popular browsers such as Chrome and Brave and always requires your permission in order to read and write to any webpage. The Xdefi team is constantly working on adding new features to ensure that users have access to the most up-to-date tools and services. The team also provides support for multiple languages and 24/7 customer service via their website.
Zengo is a mobile wallet that allows users to store, manage and make payments with cryptocurrencies. Zengo uses MPC (Multi-Party Computation) technology which allows for secure key management without a single point of failure. Instead of having one unique private key, Zengo splits the traditional key into multiple pieces and distributes them to multiple places, such as your phone and a ZenGo server.
Zengo includes features such as a built-in exchange, support for multiple currencies and tokens and an intuitive user interface. The wallet is available for both iOS and Android devices, and it can be used to store and manage a variety of digital currencies, including Bitcoin, Ethereum, Solana and 60 others.
Zengo App
Best Hardware Wallet for Bitcoin
Ledger Website
Ledgerwas founded in Paris in 2014 by Eric Larchevêque and produces hardware wallets used to securely store cryptocurrencies like Bitcoin. The Ledger wallet is a physical cold storage solution where the funds are stored offline in a USB device that connects to a computer.
Ledger wallets offer a great way to take secure control of your cryptocurrency assets and removing them from the reach of hackers and other security threats. The company currently offers two UBS-based hardware wallets, the Ledger Nano X and the Ledger Nano S. Both wallets support over 1100 cryptocurrencies and have bluetooth support.
The Ledger Nano S is the older model and comes with more limited functionality and a price tag of $85. The Ledger Nano X is their newer model and is designed to be more user-friendly with a price tag of around $159.
Ledger Products
Ledger has also developed the Ledger Live app which is free to download and available for desktop (Windows/Mac/Linux) and mobile (IOS & Android). With Ledger Live, users can easily manage their wallets, view their balances, make transactions and participate in DeFi.
Author
Jack Moreau
Jack is a crypto writer and reviewer who has been active in the space since he caught the crypto bug in 2017. With a passion for trying out new shiny things, Jack is always eager to try the latest cryptocurrency exchanges, wallets or DeFi applications.
