If you’re going to personally and securely own Bitcoin, you’ll need a Bitcoin Wallet to get started. Here are some options.
For all the recent talk about how great Bitcoin is, it would sure help to know how to actually get some.
If you’re not familiar with cryptocurrency, the whole concept of owning digital property may be totally foreign to you. A number of questions probably strike you from the start.
- How do I own Bitcoin? Where does it even go?
- Can my Bitcoin be hacked or stolen?
- How much Bitcoin can I buy?
Finding answers to these questions begins with choosing your digital wallet. Allow me to show you some of the best digital wallets that you can use to manage your Bitcoin.
But before that, let’s clear up some confusing terms.
Understanding Your Bitcoin Wallet
Bitcoin wallets– sometimes called “digital wallets” or “crypto wallets”– allow us to conveniently and securely manage our cryptocurrency holdings.
However, to simply say Bitcoin wallets “hold your bitcoin” would be misleading and irresponsible. To best understand how your wallet works, you must have a grasp of public keys and private keys.
- Public Keys are the blockchain equivalent of a bank-account number. They are long-unique strings of numbers and letters that identify a specific blockchain address.
- When other network users would like to send you some Bitcoin, they’ll need to know one of your public addresses. Multiple public keys/ public addresses can be generated from a user’s private key.
- Private Keys are 24-word long passphrases which give access and control to the funds stored on a specific blockchain address.
- While public keys are used to receive Bitcoin, only private keys can be used to send it. For this reason, private keys are often thought of as “digital signatures”, like the personal signatures used to sign a bank check.
- Private keys are personal identifiers– validation that the one accessing a given address is the rightful owner of its funds. As such, you must never share your private key with anyone, or they will be able to access your funds as well.
- So what does that have to do with your bitcoin wallet? Technically speaking, a Bitcoin wallet does not “hold” your Bitcoin itself, but your public and private keys. Rather a user’s Bitcoin holdings are simply recorded on the public blockchain, at their public address.
Software vs Hardware Wallets
Bitcoin wallets come in both software and hardware variations. Regardless of which type, each provides an interface for viewing, receiving, and sending cryptocurrency, while tracking activity of related addresses. Other features may come included as well.
Generally speaking, software wallets are more versatile and convenient than hardware wallets. However, hardware wallets are more secure than software wallets as they can easily be disconnected from the internet.
Wallets connected to the internet are called “hot wallets” as they frequently attract hackers trying to access your private keys. “Cold wallets” or “cold storage” are those keys disconnected from the internet, and therefore safe.
Wallet Options
With the basics in mind, it’s time to dig into the details of some wallets on the market. This will help you make a responsible decision in purchasing the right crypto wallet for you.
When deciding, remember to find one that strikes the right personal balance between price, functionality, and security.
Ledger Nano
- Type: Hardware
- Supported Coins: 1500+/ 1800+
- Cost: $89 (Nano S)/ $159 (Nano X) CAD
Ledger Nano S. Source: c2wireless
This is the wallet that I personally use. It comes in two editions: The Ledger Nano S, and Ledger Nano X. If you’re like me and only plan to invest in Bitcoin and a few other cryptos, take the former.
Both versions are familiarly shaped like USB sticks. In reality however, each uses a separate USB cord to connect to your computer, and the device itself features a tiny-interactive screen.
The wallet features a desktop app called “ledger live” used to manage your full span of crypto assets. You can login to view your current wallet portfolio on all connected addresses even when your hardware wallet is somewhere else.
However, to send funds or create/ view a public key, the wallet must be connected to the same desktop. That’s because the hardware wallet is what ultimately stores your private keys.
Again, only connect the wallet to your computer when you need to use it. Otherwise, keep it in cold storage and away from hackers.
Since I’m a HODLer, I don’t send funds often anyways. For that reason, my wallet usually stays tucked away where nobody will find it. Security is more important to me than convenience, so this hardware solution fits me best.
Exodus
- Type: Software
- Supported Coins: 130+
- Cost: Free
Exodus is a beginner friendly software wallet– that’s also completely free. It has both desktop-app and mobile-app versions.
Besides its storage services for over 130 cryptocurrencies, it also comes with built-in crypto exchange access. That means you can buy and sell cryptocurrency all from within its one wallet interface.
In terms of affordability and convenience, a wallet like Exodus has Ledger squarely beat. However, that’s only because its private keys are stored directly within the software wallet.
While this offers convenient access to your funds, it is also a security concern. If you want to be a regular trader and value Exodus’s exchange compatibility, I recommend coupling Exodus with a Trezor Model T.
Trezor is a hardware wallet that is fully compatible with the Exodus interface. It allows you to send bitcoin funds regularly while keeping your private keys safe. However, it comes at a hefty price of $240.
Other Wallets + Tips
That’s that– an explanation of digital wallets, how they work, and an example of both hardware and software wallet types. There are many other wallets out there that you may be interested in checking out, so I’ll list a few more here.
Before I dip, here’s a couple of tips to keep in mind:
- In case you lose your hardware or software wallet, make sure to write down your twenty-four word passphrase somewhere and put it somewhere safe.
That way, even if you lose the device, you can still recover your funds with your original private key. Easy. - If you really can’t be bothered with getting a Bitcoin wallet, just use WealthSimple Crypto. It’s a service available to Canadians that lets them invest in Bitcoin while WealthSimples handles all the back-end stuff.
You just give them dollars, watch the price go up (or down) and take out a number of dollars based on Bitcoin’s price movement. If you’re already familiar with wealthsimple, this will be incredibly easy.
Remember, people: NOT YOUR KEYS, NOT YOUR COINS.
Stay Stackin,
Andrew
