A lot of beginners buy their crypto in an exchange and leave it there, but that would mean that they are entrusting their crypto to the exchange, and exchanges do get hacked.
It should be obvious: if you're thinking about buying more crypto, then you would need someplace secure to store it. That's where a crypto wallet comes in.
The thing is, a crypto wallet doesn't literally contain your crypto, because your coins are written on the blockchain. What you can protect is the ability to transfer and withdraw your crypto, and that's exactly what a crypto wallet does: it secures your private keys, ensuring that only you can control what happens to your coins. In other words: crypto wallets secure your very ownership of your coins.
There are many types of Bitcoin wallets available in the market that offer different features and levels of security; some are better than others. That’s what we’re here to help you with. We've compiled a primer on the best crypto wallets in Australia (not to spoil anything, but the best part about this list is that the best Bitcoin wallets in Australia are also multi-currency crypto wallets, meaning you can use them to store currencies other than Bitcoin), so you can choose which one suits your needs.
Why We Need a Bitcoin Wallet?
Since your Bitcoins are written into the blockchain, you can't actually "store" them anywhere. What you can keep records of are your public and private addresses.
Your public Bitcoin address is your shareable address. This is where you receive your Bitcoins. Your private Bitcoin crypto address, on the other hand, is akin to your log-in details; it is the address from which you can authorize transfers of, and transactions using your Bitcoins.
Imagine someone getting access to your private and public addresses. The person essentially owns all of your coins and could do with it as they will.
A bitcoin wallet will ensure that only you have access to your private keys. There are two main types of wallets: hot and cold wallets. A hot wallet, simply put, is one that can be connected to the internet, and a cold wallet is one that can’t.
Types of BTC Wallets
- Resistant to attacks and viruses
- Susceptible to attacks during the creation
- Susceptible to theft and destruction
A paper wallet is one of the most straightforward ways to store your BTCs and other digital currencies. They work in accordance with a paper wallet generator, which will create a wallet and a corresponding QR code that contains the keys to the wallet. A paper wallet is a cold wallet, so it eliminates the risk of theft or loss from computers, smartphones, viruses, and hackers. While that sounds great, thieves can still gain access to your funds through a compromised OS, WiFi connection, or smart printer.
If you opt for a paper wallet, making sure that you're printing from a "dumb" printer (i.e., not connected to Bluetooth or wifi), and that you're printing on a water and fade-proof surface. Treat your paper wallet like paper fiat money -- once it's lost or damaged, your funds are gone forever.
2. Physical Bitcoin
Physical coins are connected to an actual Bitcoin address, which turns the beautiful coins into a type of cold storage wallet. There is a holographic sticker on the back of the coin that contains the details of the private key. As long as the sticker is intact, you can rest assured that no one has tampered with the wallet (though by the time you notice, it’s probably too late).
The first physical Bitcoins were produced by Mike Caldwell (through a company called Casascius), but the first iteration of the physical Bitcoin encountered problems with the US Financial Crimes Enforcement Network (FinCEN), which ultimately determined that selling preloaded BTCs are ultimately a form of money transmission. Current iterations of physical Bitcoins come with a QR code that will allow you to check the value of the coin online.
A physical coin could set you back around $100 to around $3,000. If your priority is security, there are better wallets to store your Bitcoins in. However, if novelty items are your thing, physical Bitcoins might be a great addition to your collection!
3. Web Wallets
Web wallets are accessible online, through a web browser, or through an app, making it a "hot" wallet.
Web wallets are third parties that offer asset holding and protection services. Most trading platforms and exchanges have a built-in web wallet. While trading platforms are user-friendly and practical (you only need to remember a login and a password) it's useful to remember one of Bitcoin's most basic tenets: "not your keys, not your coins." Since a third-party custodian (the platform) manages your funds, they can make calls that affect whom you get to trade with, and when.
Since web wallets are hot wallets, you are faced with a host of online dangers such as hacking and phishing.
4. Desktop Wallets
- You have full control over your funds
- Easy to use
- Susceptible to viruses, malware, and ransomware
- Losing your computer means losing access to the funds
- Compromise through updates
Desktop wallets are software that can be installed on your computer. The software encrypts, and then stores all of your private keys in your hard drive. One of the main selling points of a desktop wallet is its user-friendly interface. Most desktop wallets will give you a seed phrase (a set of words that will allow you to recover your wallet), so that adds a layer of security. Make sure you hide your seed phrase somewhere secure!
However, desktop wallets are still hot wallets, which makes them susceptible to viruses, malware, and ransomware. Some desktop wallets have also been compromised through hacks embedded in updates.
- User-friendly interface
- Compromise through the phone being lost or stolen
- Loss of access when the phone breaks
Mobile wallets offer one-click access to your crypto funds. However, it's also one of the most insecure ways to store your crypto, since phones are so often stolen, lost, and broken. Your mobile wallet is only as secure as your phone is. If you have an easy-to-crack pin (or worse, no pin at all), your funds are in danger.
Mobile wallets provide an unbeatable level of accessibility, especially for funds that you need to move fairly quickly. The key is to not hold large amounts of crypto in your mobile wallet. Most mobile key wallets offer a seed phrase as well.
- Secure -- not susceptible to any attacks or viruses/malware
In terms of security, nothing beats a hardware wallet. First of all, it's a cold wallet, meaning it's not susceptible to hacking, phishing, and other attacks brought about by being connected to the internet. Another great thing is that losing your hardware wallet doesn't mean you lose your funds -- your account can be restored to another wallet through a Bitcoin wallet backup (given that you've written your seed phrase down and secured it).
The downside? Hardware wallets can be expensive. The two most known brands, Trezor and Ledger start at around $70.
7. Bank Wallets
- Establishment-level protection for your crypto
- Easy to use
- Unavailable to most people
If you’re in a crypto-friendly country where banks accept crypto, congratulations! Some banks in the United Kingdom and Europe now allow users to store their Bitcoins in a wallet.
The downside to banks, aside from the very obvious problem that they’re not accessible to everyone, is that banks are the very institution that Bitcoin was designed to break free from.
How to Get a Bitcoin Address
1. Generate it from a Hardware Wallet.
If you’re wondering how to create a Bitcoin wallet address, it’s pretty easy since it’s a common feature of most wallets. Here’s the setup for a Trezor wallet. Choose Bitcoin as the currency, then click your wallet’s receive tab. There will be an option to create a Bitcoin wallet address from there.
2. Generate it from a Web Wallet
Web wallets also allow users to generate new Bitcoin wallets. Kraken, for example, you just have to click “Deposit” from the “Funding” tab, and clicking the button that says “Generate New Address.”
3. Generate it from a Desktop Wallet
Most Desktop Wallets also have the capability to create new Bitcoin wallet addresses. Here’s how to do it on an Exodus wallet.
Bitcoin Wallets Trends in Australia
Cryptocurrency has taken Australia by storm, so here’s a list of the best crypto wallets in Australia if you’re looking for the most secure wallets to store your crypto in.
Ledger Nano S
Ledger Nano S is one of Australia’s best Bitcoin hardware wallets. The Ledger Nano supports around 1800+ cryptocurrency assets, making it one of the best choices for both seasoned and newbie traders.
Trezor Model T
Trezor wallet is another good hardware wallet choice. The Trezor Model T offers an extra feature: you can also use it to secure your passwords.
Exodus is one of the most well-known desktop wallets out there. Exodus wallet has a user-friendly interface that is perfect for newbie cryptocurrency holders. Bonus: Exodus also has a mobile app version, and it integrates seamlessly with the Trezor hardware wallet.
Coinomi is a mobile-focused cryptocurrency wallet that stores your keys in your device, and nowhere else. The biggest selling point is the app’s track record. According to the website, “no Coinomi wallet has ever been hacked or compromised to date.”
We hope this quick primer has given you an overview of cryptocurrency wallets in the market today, plus a quick list of the best Bitcoin wallets in Australia (vetoed by Australians)! Now that you’ve ensured the safety of your coins, don’t forget to keep tabs on the Bitcoin value!