Since cryptocurrencies were invented in 2009 bitcoin has soared in popularity. Like most valuable objects or stocks, the whole price is determined by how safe your Bitcoin store is. To secure and store Bitcoin properly, you need to understand certain essential features of the cryptocurrency. Most importantly, you must store it somewhere to protect your privacy. Digital money keeps everything secure so you won't have to write your credit card.
Bitcoin currency is a cryptocurrency that has been gaining popularity in recent years and can be used as an alternative to traditional currencies. Bitcoins are stored on the blockchain, which is a public ledger of all transactions ever made with bitcoins. This allows for transparency and security because your account cannot be hacked or compromised if it's not linked to any personal information as banks require.
There are many different types of wallets but for this post, we will focus on two popular ones: cold wallets and hot wallets. The best type of wallet depends on what you need it for - some people just want to store their coins while others want a faster approach to do trades and direct transactions.
What is a Bitcoin Wallet?
A Bitcoin wallet is a form of secure storage that reserves your BTC as well as altcoins. It is a computer program that stores your private and public keys. A "private key" is like a password for coins stored in the wallet, while a "public key" or "address" is an address to which others can send bitcoins.
The two types of keys are linked together and create what's called a digital signature, which helps protect against fraudsters who might try to spend other people's money by forging their identities.
- Hot wallets are cheaper than safe methods of making quick transactions so you get a faster transfer time.
- Cold wallets are more secure and designed for the duration of cryptocurrency use. Whichever you choose is up to you but keep in mind that both cold and hot wallets have their own advantages and disadvantages.
For starters, you can just hold your investments in a reliable crypto exchange like Binance or Coinbase. But, if you want to take it to the next level, a wallet should be mandatory.
How Does Bitcoin Wallet Work?
Bitcoin wallets typically generate six sets of numbers: one set of 12 words as backup, three sets (one per line) consisting of both letters and numbers and two QR codes with addresses for sending bitcoins to another person or company. One important thing about these backups is that they should never be shared with anybody else but you. Remembering and storing the code is extremely important because there will be no other way to recover it.
Wisely, you will want to write it down on a notepad or piece of paper and store it somewhere secure yet accessible, should you forget the access key of your wallet.
Think of it as a wallet 2.0 where instead of the traditional foldable type that stores your cash, you have a flash drive or app that holds all of your non-physical assets. We are definitely stepping into the future and having either a cold wallet or hot wallet is the first process into a new world of transactions.
Criteria to the Safest Bitcoin Wallets
We all know that Bitcoin is a powerful and revolutionary way to store, spend, or invest money. After the hack on Bitfinex in 2016, people have become more cautious about the safety of their Bitcoins. There have been many hacks in recent years for this digital currency making it hard for your BTC to be 100% safe from theft.
In order to protect yourself from any further hacks or theft, you should follow these criteria when choosing a wallet:
- Does the wallet allow access via biometrics?
- Is there an offline mode?
- Can you set up 2FA security without using SMS?
- What type of encryption does it use (AES 256 bit)?
Bitcoin Wallets Features & Benefits
Selecting the best wallet is imperative in trading, mining, buying and selling cryptocurrency. A wallet is a gateway to all transactions in the crypto world. Without a wallet, you would not be able to even start on your cryptocurrency journey. Bitcoin still remains the most popular cryptocurrency and the fact that it is widely used and available means that there are a variety of wallets that support it.
However, with the widespread availability and types of Bitcoin wallets, it can also be difficult and confusing to choose the best one for you. The list of Bitcoin Wallets includes Exodus, Trezor, Electrum and many more.
Most Secure Bitcoin Wallets
There have been a number of hacking events surrounding bitcoin crypto coins. Hackers are coming up with ingenious ways of stealing funds and keeping investments secure is increasingly important. Safety is undoubtedly one of the most important aspects of a cryptocurrency wallet.
Safest and Most Secure Bitcoin Hot Wallets of All Time
Electrum
Best Feature: good security
Purchase Cost: Free
Cloud Storage: Yes
Cold Storage: Yes
Built-in exchange: Yes
Customer support: Yes
Works on mobile: Yes
Customizable transaction fees: Yes
Open-source software: Yes
Bluetooth connectivity: No
Electrum is a hot wallet and one of the original Bitcoin wallets. It has a barebones interface and only supports Bitcoin, which has made it come up with functions that make it very secure to store and complete transactions. Some safety features include the ability to choose your level of security. So, you can create your Electrum wallet with a multi-signature wallet, a standard wallet, or one with two-factor authentications. Users are also able to elongate their seed phrases with custom words. This means it has a great level of security.
Jaxx
Best Feature: good security
Purchase Cost: Free
Cloud Storage: Yes
Cold Storage: Yes
Built-in exchange: Yes
Customer support: Yes
Works on mobile: Yes
Customizable transaction fees: Yes
Open-source software: Yes
Bluetooth connectivity: No
Jaxx is another wallet app with great security features. The Jaxx Liberty has both password and PIN protection. Jaxx uses a 12-word seed to create your wallets’ private encryption keys, giving them the strength of 128-bits and Jaxx never has access to the phrase. As well as this, Jaxx doesn’t store any user information, private wallet data, or funds on centralized servers – instead, all the information is in your storage. However it does not have two-factor authentication, but the other features may compensate for this.
Exodus
Best Feature: beginner-friendly
Purchase Cost: Free
Cloud Storage: Yes
Cold Storage: No
Built-in exchange: Yes
Customer support: Yes
Works on mobile: Yes
Customizable transaction fees: Yes
Open-source software: No
Bluetooth connectivity: No
Exodus is a desktop and mobile wallet that provides users with a private key to access Bitcoin. It also has other useful security features made specifically to keep your assets secure. The private key is stored on your computer. It is important to create a backup of the key to make this wallet the safest as possible. You use seed words to generate keys and it is great for beginners because of its ease of use
The Safest and Most Secure Bitcoin Cold Wallets of All Time
Ledger
Both the Ledger Nano X and Ledger Nano S are hardware wallets that keep your bitcoins safe in an offline device. The Ledger devices can connect to your phone or computer to store and access your digital assets. It has extremely secure offline storage, which makes it hard for any hacking to take place. Ledger wallets use highly secure chips such as credit cards to provide that extra security boost.
Ledger Nano X
Best Feature: convenient UI
Purchase Cost: ~$119
Cloud Storage: No
Cold Storage: Yes
Built-in exchange: Yes
Customer support: Yes
Works on mobile: Yes
Customizable transaction fees: Yes
Open-source software: No
Bluetooth connectivity: Yes
The Ledger brand is one of the most iconic wallets in the crypto market. It is also one of the first that introduced hardware wallets since 2014 and has since then become a staple for long-term investors. The latest version, Nano X, is a huge step-up from its predecessor, the S model. It has its own exchange platform as well, making transactions and storage more convenient for the user. Security is also tight, which is why plenty of investors will highly recommend the Nano X. Just make sure to keep it in a very safe place along with the key code access so you can always stay in touch with your coins.
The Nano X also includes a USB Type-C to Type-A cable so you can easily connect to your computer or phone. Best of all, it supports 1,800 cryptocurrencies.
Ledger Nano S
Best Feature: affordable
Purchase Cost: ~$59
Cloud Storage: No
Cold Storage: Yes
Built-in exchange: Yes
Customer support: Yes
Works on mobile: Yes
Customizable transaction fees: Yes
Open-source software: Yes
Bluetooth connectivity: No
Arguably, the Ledger Nano S is still the most reliable budget cold wallet available today. It may lack some of the better features from the Nano X - such as lack of Bluetooth connectivity and limited app storage of up to three - but it still makes a great storage for beginner investors who just want to buy a certain coin and leave it in a secure place inside the house or office. The Nano S may be an old model but that does not deter its great security that Ledger is known for.
However, the most unique feature of the Nano S compared to its successor is the inclusion of an open-source software. It also comes with a much-improved Ledger Live customer and community support as well.
COLDCARD
Best Feature: secure and affordable
Purchase Cost: ~$119
Cloud Storage: No
Cold Storage: Yes
Built-in exchange: Yes
Customer support: Yes
Works on mobile: No
Customizable transaction fees: No
Open-source software: Yes
Bluetooth connectivity: No
COLDCARD is made by Coinkite: one of the original Bitcoin companies since the early days of cryptocurrency. The model may look old but it is still one of the most sought-after Bitcoin-only cold wallets today. This is all thanks to its MicroSD backup, decoy wallets, lockout timers and PINs. The model looks like a calculator but it is a small, mean machine that can withstand major cyber attacks. In case you are having fears of an oncoming hack, then the COLDCARD is your guaranteed safety to keep all your saved BTC.
The Most Expensive Bitcoin Cold Wallets of All Time
Trezor Model T
Best Feature: Security
Purchase Cost: ~$190
Cloud Storage: No
Cold Storage: Yes
Built-in exchange: Yes
Customer support: Yes
Works on mobile: Yes
Customizable transaction fees: Yes
Open-source software: No
Bluetooth connectivity: Yes
The Trezor Model T is also Ledger’s direct competitor for a very long time, so if you like a more advanced type of wallet, then Trezor could be your preferred choice.
When it comes to wallet security, nothing comes close to the Trezor brand. While this cold wallet may cost a lot, it pays for itself for its defenses alone. The Model T comes with built-in exchange and can also connect directly to third-party platforms such as CoinSwitch and Changelly. It includes a MicroSD slot as well, which allows you to encrypt the wallet PIN. This way, security is sturdier, avoiding any major cyber attacks.
Just like the Ledger Nano X, the Model T includes a USB Type-C to Type-A cable for convenient connections to your PC or phone.
OPOLO Cosmos
Best Feature: All-in-one security vault
Purchase Cost: ~$190
Cloud Storage: Yes
Cold Storage: Yes
Built-in exchange: Yes
Customer support: Yes
Works on mobile: Yes
Customizable transaction fees: Yes
Open-source software: Yes
Bluetooth connectivity: Yes
The OPOLO brand is considered the most sophisticated cold wallet in the market today. Boasting over 200,000 tokens and 110 coins, the OPOLO app alone includes an open-source software, a password manager and multi-sig. To make security tighter, it supports 127 characters for the password as well. Not only does the Cosmos make a great cold wallet but it also acts as a mini vault for all your passphrases and passwords for your other platforms like your Gmail and social media profiles.
Final Thoughts
We can never be too sure about the future of the crypto market and its security even if large platforms such as Binance and Coinbase may say that they have state-of-the-art defenses against hackers, which is why stricter wallets exist.
If you feel comfortable storing your cryptocurrencies online with good security, refer to our list above such as Electrum, Jaxx and Exodus.
For the extra mile of security, you will need a cold wallet - for a price. Just make sure to keep your PINs and passphrases on paper and hide them somewhere safe so you do not lose all your precious savings.
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