Bitcoin wallets: comparison and test of the best crypto wallets 2021

There are purses for cash and bank accounts for book money. But how are digital currencies such as bitcoins stored? In order to store digital currencies securely, there are crypto wallets Wallet for cryptocurrencies, Basic requirement. With the help of a crypto wallet, coveted digital currencies such as Bitcoin and Co. can be stored, sent and received. Crypto wallets differ depending on the type and provider in terms of user-friendliness and security.

This makes it not easy, especially for newcomers who are interested in owning digital currencies, to decide on the right product and the right provider. Since crypto currencies are still new territory for many people and the multitude of opaque offers, technical terms and opinions seem daunting to many people, we will try the following Review to provide a little insight into the different types of crypto wallets as well as the providers, so that newcomers as well as experienced users get a better overview of the current market.

Anyone who reads this article carefully to the end can different types of wallets how hot wallet, web wallet, desktop wallet, smartphone wallet and hardware wallet differ from each other, knows about the advantages and disadvantages and knows the best providers in each category.

Content

    Definition of terms: Bitcoin Wallet

    Many people use the term "Bitcoin" synonymously with "digital currency". However, this is not correct, as there are many other digital currencies in addition to Bitcoins, such as:

    • Ether,
    • Litecoin or
    • Ripple.

    By definition, BTC wallets are so-called blockchain wallets, which are specially designed for Bitcoins. Nowadays, however, this no longer corresponds to the truth, as good Bitcoin or crypto wallets can record a variety of digital currencies. For example, the wallet of the Crypto exchange eToro more than 120 cryptocurrencies store.

    So there are nowadays only a few pure "Bitcoin Wallets" and one could rather speak of “crypto wallet” in general. This is interesting for all those who want to store other crypto currencies in addition to Bitcoins. Here it is worthwhile to read the provider's specifications carefully to see whether the desired currency is supported. Otherwise, in the worst case, several wallets for different currencies would have to be kept, which not only costs money, but would also be more than just cumbersome.

    What exactly is a Bitcoin wallet?

    Bitcoins do not physically exist, they just exist from a sequence of virtual data, which are stored in a Bitcoin wallet in digital form. Although different types of wallets differ, the basic principle is the same: each wallet contains two different keys:

    1. The public key acts as the recipient address and is always required when you want to transfer bitcoins. The public key is therefore comparable to an account number.
    2. The Private Key is required, on the other hand, to be able to access your own bitcoins as a recipient and can therefore be compared with a password of a bank account.

    When sending bitcoins, a single data structure, the bitcoin transaction, is created by the wallet client and sent to the network. The network's Bitcoin nodes communicate and forward the transaction. If the operation is valid, the nodes will include it in the block they mined. It is of course imperative that the owner does not lose the keys, which ultimately only represent a certain character string, otherwise he no longer have access to the bitcoins Has. The private key should therefore be guarded with the same care as the PIN of a bank account.

    What types and operators of Bitcoin wallets are there?

    There are now a number of different wallets, all with specific advantages and disadvantages.

    Trezor Model One - Cryptocurrency Hardware Wallet - The Most Trusted Cold Storage for Bitcoin, Ethereum, ERC20 and many more (white)
    • LONG-TERM AND SECURE STORAGE - Save your crypto currencies and passwords on a hardware wallet. The private keys never leave the hardware wallet.
    • SECURE - The hardware wallet offers the latest cryptographic algorithms and enables long-term, secure and professional storage of various crypto currencies such as B. Bitcoin, Dash, Litecoin Zcash and Ether (via MyEtherWallet).
    • USB 2.0 - The Trezor Hardware Wallet is a USB device and is therefore compatible with Windows, macOS and Linux.
    • COMPATIBLE WITH MANY CRYPTOCURRENCIES - TREZOR One is compatible with many Crypto Currencies and some other services. Store your wealth safely.
    • DISPLAY - Information about the transactions can be checked and confirmed directly via the display and the two buttons on the device. Thus, your crypto currencies are protected from attacks on your computer.

    Hot wallets

    Hot wallets is not a specific form of wallet per se, but rather a name all Bitcoin wallets that are connected to the internet are. This includes both web wallets, desktop wallets and wallets for smartphones. Hot wallets offer sufficient security and easy handling, especially for people with smaller amounts or beginners. As we will see later, the hot wallets are opposed to the so-called hardware wallets - physical devices on which the keys are stored.

    Web wallets

    Web wallets refers to all forms of wallets to which using an internet browser can be accessed. This is the easiest way for beginners to create a Bitcoin wallet. There are a large number of these online services, some of which are linked to smartphone or desktop wallets and thus open up a range of options for accessing digital currencies.

    • One advantage of web-based wallets is that they accessible from anywhere are independent of which device you use. The handling works without any problems, as virtually any device connected to the Internet can access web wallets.
    • However, they have one major disadvantage: The problem is that web wallets use the store private key online. This attracts hackers and, if leaks are successful, can have serious consequences for users.
    • Furthermore, the provider of a web wallet must be trustworthy, as it is theoretically possible that the provider could use the private key himself and prevent the user from accessing it. It's a dangerous idea, especially when it comes to large amounts.

    Examples of popular web wallets:

    • Coinbase, a wallet and a Bitcoin exchange, operates its wallet worldwide. Users in the US and Europe can purchase bitcoins through the trading exchange.
    • Circle offers users worldwide the opportunity to store, send, receive and purchase bitcoins.
    • Strongcoin offers a Fusion Wallet, which enables users to encrypt the private key before transmission to the server - the encryption is done in the browser. The keys are completely anonymous, which enables the highest possible level of security among the web wallets.

    Choosing the right wallet naturally also depends on your own needs. Anyone who wants to trade with Bitcoins is at Coinbase in good hands, as the provider connects his wallet with an exchange. If you already own coins and don't want to trade, we recommend the Strongcoin Fusion Wallet, as the private key is encrypted by the browser before it reaches the provider's servers. This means that the security restrictions that we initially pointed out can be greatly reduced.

    To the free Coinbase registration

    Desktop wallets

    • With a desktop wallet, the Key managed independently on the PCwhich makes them generally more secure than web wallets.

    Examples of popular desktop wallets:

    • Bitcoin Core: Anyone who has already installed the original Bitcoin client is already using a wallet. In addition to transferring transactions to the network, the software also allows a Bitcoin address to be set up to receive and send the virtual currency and to store the private key for this.
    • Armory: Armory is an open source wallet and is available for free. The desktop wallet was specially created for increased security - Armory enables cold storage, ie the key can be stored without an internet connection in order to rule out hacker attacks. In addition, several accounts can be created, for example to create a business and private account. Unfortunately, the wallet is only available for bitcoins.
    • DarkWallet: DarkWallet uses a slim browser plug-in to offer services like coin mixing, in which users can exchange coins without being tracked by natives.
    • Electrum: Another well-known desktop wallet is Electrum. The user-friendly interface and the rich features make Electrum attractive for both beginners and experienced users. Electrum can be used for Mac, Linux and Windows and is compatible with hardware wallets such as TREZOR, Ledger Nano and KeepKey.

    Although desktop wallets are generally more secure than web wallets, you should still choose the provider with the highest security standards. The cold storage possibilities of Armory make the wallet one of the safest in the desktop category.

    Smartphone wallets

    As the name suggests, smartphone wallets are only available on smartphones.

    • In some cases, the wallets can even use the Near Field Communication Technology (NFC) of the smartphone so that the smartphone only has to be held up to a reader and payments can be made with Bitcoins without having to enter any information.
    Smartphone wallets are no full-fledged clients. A full-fledged client has to download the entire Bitcoin blockchain, which is constantly growing and already amounts to several gigabytes. Many smartphones are not able to save the entire blockchain. These mobile clients are therefore equipped with a Simplified Payment Verification (SPV) - a simplified payment verification. A small sub-section of the blockchain is downloaded and trusted nodes are used to help ensure that the correct information is available.

    The selection of Android and iOS-based wallets is very large. The following is a small overview of the most common smartphone wallets:

    • Breadwalltet: Breadwallet was originally only available for iOS, but is now also available for Android users on the Google Play Store. The application has a number of security functions, such as passcode support and control over private keys, which make the app very user-friendly.
    • Edge: Edge is aimed entirely at newcomers. The automatic backup function, which automatically saves the most important configurations, is particularly advantageous here so that users are always optimally protected.
    • MyCelium: MyCelium is the best known wallet for Android and, in addition to being easy to use, also offers a range of back-up functions for increased security.
    • eToro Wallet: The operator of the social investing platform eToro has recently also released a smartphone wallet, which, like the brokerage platform, is easy to use and was created not only for bitcoins, but for more than 120 crypto currencies.
    • Green Address: GreenAddress is a cross-platform wallet, which can be accessed both for the web browser and via desktop, Android and iOS. GreenAddress supports a number of security functions: For example, money transfers must be confirmed again manually. In addition, the platform is even compatible with some hardware wallets.

    Anyone with a little knowledge of investing knows that eToro's platform Ease of use and security unified like hardly any other provider. The same principles also apply to the wallet. Therefore, we can more than recommend the eToro wallet in the smartphone wallet category.

    For free eToro registration

    * Cryptocurrencies are highly volatile, unregulated investment products. No EU investor protection. Your capital is at risk.

    Hardware Wallets

    Hardware wallets are widespread these days. These are devices that store private keys electronically and make payments easily.

    • Hardware wallets offer the greatest possible security, because they save the private key on the device without storing it on the PC. This means that hackers cannot steal the key and hardware wallets are still secure even if the PC has already been infected.
    • When a Back-up code the saved currencies can be restored even in the event of theft or damage.

    Here are the currently best known and most popular hardware wallets on the market:

    • Safe One: The hardware wallet is aimed at Bitcoin users who want to store a considerable amount of Bitcoins and do not want to be dependent on an intermediary Bitcoin storage service or impractical storage options.
      Trezor Model One - Cryptocurrency Hardware Wallet - The Most Trusted Cold Storage for Bitcoin, Ethereum, ERC20 and many more (white)
      • LONG-TERM AND SECURE STORAGE - Save your crypto currencies and passwords on a hardware wallet. The private keys never leave the hardware wallet.
      • SECURE - The hardware wallet offers the latest cryptographic algorithms and enables long-term, secure and professional storage of various crypto currencies such as B. Bitcoin, Dash, Litecoin Zcash and Ether (via MyEtherWallet).
      • USB 2.0 - The Trezor Hardware Wallet is a USB device and is therefore compatible with Windows, macOS and Linux.
      • COMPATIBLE WITH MANY CRYPTOCURRENCIES - TREZOR One is compatible with many Crypto Currencies and some other services. Store your wealth safely.
      • DISPLAY - Information about the transactions can be checked and confirmed directly via the display and the two buttons on the device. Thus, your crypto currencies are protected from attacks on your computer.
    • KeepKey: Keep Key released its hardware wallet in September 2015, which is in the upper price range. The Keepkey software was originally part of Trezor's Code.
      KeepKey: your private Bitcoin vault
      • Hardware wallet with large OLED display (256 × 64 3.12 ″)
      • Supports Bitcoin, Ethereum, Litecoin, Namecoin, Dogecoin and DASH
      • Cryptos can be changed directly on the device via Shapeshift
      • Elegant design: front made of polycarbonate with housing made of anodized aluminum
      • Works with PC, Mac, Linux, and Android
    • Ledger Nano S and X: The Ledger Nano S is in the middle price range despite the screen and high quality standards. While the Nano S can be used with an Android smartphone, the more expensive Ledger Nano X can be used for iOS.

    While all hardware wallets offer the highest level of security, we have noticed the biggest difference, especially in the processing quality. What that Ledger In addition to the user-friendliness, what sets it apart from the competition is the processing of high-quality materials, which makes it less prone to damage.

    Conclusion: The eToro wallet covers the needs of most users

    When choosing the right wallet, it depends on the needs of each individual user. Of course are Hardware Wallets the safest. However, the cumbersome use and the acquisition costs only make sense if a considerable amount of Bitcoins or other currencies is already available.

    For users with a smaller amount The eToro Wallet offers the best conditions for Bitcoins or other digital currencies.

    Who is that? eToro Wallet would like to secure, must first register via the eToro platform.

    Step 1: The registration on the trading platform is easy and secure via Facebook or the Google account. To register, you must first enter personal data, including your financial situation.

    Step 2: Those who have successfully registered with eToro can then download the wallet, which is available in the Google Play Store for Android or the Apple Store for iOS.

    Step 3: After the download, the same user data from the main eToro account must be used to use the wallet. After the verification process has been completed, all functions of the wallet are available to users. The available crypto balance is displayed, as well as the trading history.

    For free eToro registration

    * Cryptocurrencies are highly volatile, unregulated investment products. No EU investor protection. Your capital is at risk.

    Finally one more Safety note: No matter which provider is preferred and which type of wallet you choose - only the money should be converted into digital currencies, which really is freely available and which you could do without in an emergency. Bitcoins and other digital currencies are affected by fluctuations and can therefore also fall in value. In addition, nobody can predict the future of digital currencies. This must be clear to everyone who decides on a Bitcoin wallet.

    About David Maul

    David Maul is a qualified business IT specialist with a passion for hardware