Bitcoin is the most traded cryptocurrency in the market today. However, you’ll need a digital wallet to get started with Bitcoin. This guide explains digital wallets and how to find the best cryptocurrency wallet for you.
What is a digital wallet for Bitcoin?
A digital wallet – also known as a bitcoin wallet – holds proof of your digital assets. It keeps the public and private keys required to buy bitcoin or other cryptocurrencies. The private keys are fundamental because it provides digital signatures authorizing each transaction. In addition, it unlocks your crypto wallet to trade or spend your cryptocurrency. Sometimes, you will have to keep safe and secure your private key. Losing your private keys denies you access to your crypto.
Do I need a digital wallet to trade Bitcoin?
To buy or trade bitcoin, you need to create a wallet address to enable the proper storage of the digital currencies after it has been transferred to you. Most crypto exchanges provide a digital wallet for you to use. You can use the wallet to buy, sell, trade, or transfer crypto to someone else or even to another wallet. In addition, most bitcoin digital wallets are password-protected and offer security features such as encryption and two-factor authentication to secure your funds. If you’re considering using an exchange’s built-in wallet, getting familiar with its storage and crypto transfer capabilities is advisable.
While most bitcoin wallets give you complete custody over your assets, not all cryptocurrency exchanges and investment platforms do. You can also decide to have full custody or control over your money, but you’ll probably need a non-custodial bitcoin wallet to do so. These stand-alone wallets will give you absolute control and security over your crypto assets.
Types of digital wallets
There are two types of digital wallets that exist for bitcoin:
- hardware wallet (cold storage)
- software wallet (hot wallet).
A hardware Bitcoin wallet stores your private keys entirely offline on a device (such as a USB drive) that is not connected to the internet. Because they’re offline, hardware wallets are the most secure wallets for keeping your crypto holdings. Examples of cold bitcoin wallets include Trezor and Ledger wallets.
A software Bitcoin wallet (hot wallet) runs on your computer or smartphone, or web browser, so the keys are stored online. Because it is actively online, making it easier to send, receive, and use your crypto. However, they are more vulnerable to hacking attempts since they leave your keys connected to the Internet. The good news is that exchanges and digital wallet providers appear to be getting better at thwarting crypto theft.
According to CipherTrace, a blockchain security and analytics firm, cryptocrime dropped to $681 million in 2021 from $1.9 billion in 2020. Still, always remember to enable features like two-factor verification to enhance your wallet’s security and keep your digital assets in your wallet safe from would-be thieves.
Paper wallets also serve as a form of offline cold storage for cryptocurrency. This entails printing your public and private keys onto a piece of paper, which you then save and preserve in a safe location. Then you simply scan the QR code that contains the keys to gain access to your cryptocurrency.
Desktop bitcoin wallets are installed on a desktop or laptop computer, which gives you complete control over the wallet. No third party can access or freeze your funds or interfere with your wallet. But security is your responsibility. All you need to do is to secure and back up your wallet and ensure your computer is safe from malware.
The most popular desktop Bitcoin wallets you can use include Electrum, Bitcoin Core, Atomic Wallet, BitPay, and Exodus.
Mobile wallets run on your smartphone or tablet. Mobile wallets for iOS and Android are the most convenient for everyday trading and the use of QR codes to make quick payments. Like desktop wallets, you’ll need to back up your device and set up two-factor authentication to secure your digital assets.
Examples of mobile Bitcoin wallets include Bitcoin Wallet, Mycelium, BitPay, Atomic Wallet, Exodus, and GreenAddress.
Web wallets: MetaMask, for example, is an online wallet that can send and hold cryptocurrency on one’s behalf. Web wallets have the advantage of being accessible from any location and on any device.
Best Bitcoin Wallets for 2022
Exodus offers cryptocurrency exchange services across all gadgets, including desktop, mobile, and hardware crypto wallets. Its features include live charts and portfolio data, 24/7 customer support, a built-in exchange, and more than 150 cryptocurrency assets.
Electrum is a type of hot wallet that encrypts your cryptos online. It functions by verifying all of your bitcoin transactions are in the bitcoin blockchain and leverages its Multisig feature to allow you to spend bitcoin between multiple wallets. In addition, Electrum offers several interfaces that you can use on mobile, desktop, or its command-line interface.
Mycelium is a free bitcoin wallet that offers a broad range of bitcoin storage services such as advanced cold storage, spending and savings accounts for bitcoin investors, and inter-wallet operability. It is a bitcoin-focused digital wallet but also offers support for Ethereum-based tokens. Additional features of using this wallet include in-app exchange, trading, and educational resources.
Ledger was launched in 2014; it is one of the best hardware wallets. The company offered customers two different types of Ledger wallets for Bitcoin — Ledger Nano S and Ledger Nano X. Ledger Nano X costs twice what you’ll pay for Nano S. It also comes with Bluetooth and long battery life. Moreover, users can maneuver between up to 100 crypto apps on the Nano X compared to three on the Nano S.
Trezor is another cold wallet for bitcoin that offers offline storage through an external USB-like device. Both Trezor One and Trezor Model T provide Bitcoin-only firmware and more than 1,600 cryptocurrencies. However, some of Trezor’s advanced features can be pricey.
Metamask is designed to be accessible as a browser extension and as a mobile app. The wallet includes private key storage, a secure login, a token wallet, and a token exchange for buying, sending, and swapping tokens. MetaMask, on the other hand, primarily supports Ethereum and ERC-20 coins.
7. Trust Wallet
Trust Wallet is a mobile-only digital wallet that lets you store, purchase, and exchange bitcoin and other cryptocurrencies. You can also earn up to 130 percent APR by staking cryptocurrency. The wallet is available for iOS and Android devices.
8. Blockchain.com wallet
Blockchain.com’s bitcoin wallet offers online encryption and gives you complete custody over your bitcoin holdings. Its best features perhaps include crypto data charts, interest-bearing accounts, and real-time crypto prices. But keep note that the total number of tradeable assets you can hold inside the wallet is limited.
Create your hi wallet to begin earning HI
If you want to get into cryptocurrency, the first step is to get a crypto wallet. Your hi wallet is the simplest and most convenient way to access your HI within the hi ecosystem. You can also use your hi wallet to store cryptocurrencies like Bitcoin, Ethereum, and many more.
Hold HI in your wallet to earn daily yields through staking. In addition, you can earn HI daily by inviting your friends to join hi.com. Get half the daily rewards for any friend you refer who claims daily. And the friends of your friends give you rewards too (downstream referrals)
Follow these procedures to set up your new wallet. Hi can be bought via WhatsApp or Telegram. After that, type “Hi” in the chat to create a menu that allows you to establish an account. Your hi wallet will be created immediately when you finish the signup process.