The use of bitcoin as a medium of currency exchange, as a store of value, and for purchase is rapidly growing by the day. We may use it for many different purposes, however, the fact remains that we are dealing with virtual money and so the risks may be greater.
We’ve heard of people losing their bitcoins during fraudulent transactions and of bitcoins being stolen, which brings us to why storing your bitcoins safely is extremely important. Just like how we use our purses and wallets to store physical money, bitcoins too have wallets that store not your money, but the private key which is something like an ATM pin that allows access to the bitcoin address and to do transactions.
Bitcoin wallets can be chosen according to your preference and convenience. Each wallet has its own specifications. Your wallet contains two types of keys:
- The Public key, which is the bitcoin address that is randomly generated every time you make a transaction and can be viewed by anyone, and
- The Private key which goes with that address. Without these two keys, you cannot use your bitcoins or gain access to spend it.
Of course, you can also view your current balance and view related transactions on a new page.
Bitcoin wallets come in different forms and designs. However, securing and backing up your bitcoin wallet is essential. Bitcoin wallets vary in the type of device used and the main forms of these wallets are Desktop, Mobile, Web, Paper, and Hardware. Yes, it is even possible to store them in a paper if you don’t trust computers.
Before you choose your bitcoin wallet, the things that you need to consider are Security and Backup, Convenience and Compatibility with other cryptocurrencies. Compatibility is important because if you have already started using bitcoins then you’re bound to start using other cryptocurrencies. So if you’re planning to use bitcoins, you will first need to buy, download or create a bitcoin wallet. We have listed five of the best offline wallets for you:
1. Ledger Nano S
It is important to use a hardware wallet when you’re dealing with a lot of bitcoins. Ledger Nano S is a hardware wallet founded by a French start-up. It is a USB drive type of wallet that can connect to any USB port. It doesn’t have to be charged because it doesn’t have a separate battery and automatically starts up once plugged into a USB port.
The Ledger Nano is considered to be the smallest and most cost-effective option. It works like a Smartcard, in which the private key is generated and signed offline during the transaction. When you install the device, you need to create a secure pin code and a 24-word recovery code in order to restore your bitcoins anytime. The Ledger Nano S can also be used to store Ether, Litecoin, Ripple and much more making it highly compatible.
Mycelium owes its huge popularity to its ease of usage. It is a mobile wallet, compatible with Ledger Nano S and Trezor (which are hardware wallets) and with paper wallets too. It is hassle-free as it does not require email verifications, passwords and usernames to help you get started. Mycelium is an HD wallet containing a 12-word seed key which should be noted somewhere and kept safe as this will help you recover your bitcoins in case you damage or lose your device. It is available for both Android and iOS.
Exodus is again a very convenient and free to use desktop wallet designed in 2015. It is the first multi-cryptocurrency wallet and supports Bitcoin, Ethereum, Litecoin, Dogecoin and Dash among others. There is no registration and identity verification to get started. However, you do need to create a backup code. For backing-up your code, it asks for your email id to aid in recovery. However, you can only take a backup if there is some balance left in your wallet. It is supported on Windows, Mac, and Linux.
Trezor is the first bitcoin hardware wallet developed by SatoshiLabs. It works just like the Ledger Nano, where it is consists of an OLED screen and connects through a USB to either your phone or computer. When you first connect it to a PC, it shows a 9 digit pin code on its screen. This same code has to be entered into the PC. A random code is generated every time you connect it to a device, which makes it highly secure. Trezor now supports many cryptocurrencies like Ethereum, Litecoin, Zcash, Dash and many more.
Armory is a popular desktop wallet option. It is considered to be the most mature and secure where private keys are stored in an offline computer and only someone with access to the physical location of the computer which is kept a secret can steal bitcoins. This is highly secure as users are in complete control of the private key.
- It is important to set up a bitcoin wallet first before getting bitcoins so as to store it safely and prevent from losing it.
- Some important hardware wallets are Ledger Nano S and Trezor that are highly secure and connect to a USB drive. It asks for a password code and backup seed key for recovering bitcoins. It works like a smartcard where the private key is generated and signed offline during transactions.
- Some popular desktop wallets are Exodus and Armory. Exodus is very easy to use and only asks for a backup code in case of restoring bitcoins. Armory, on the other hand, is highly secure as the private key is stored in an offline computer which makes it almost impossible to steal bitcoins.
- Mycelium is a popular form of a mobile wallet that is easy to use and compatible with the important cryptocurrencies. It only again asks for a back-up key in case of recovering your bitcoins. It is available in Android and iOS.
One thing you’ll probably hear from every bitcoin expert is that your bitcoins are as safe as you make them. Before you start using and getting bitcoins, invest some time to decide on your wallet as the security of your money entirely depends on it. Some factors to look at while deciding would be the amount you want to deal with and the frequency of usage. For instance, if you’re going to be using the bitcoin frequently then a more convenient option can be considered like mobile or desktop wallets.