Ultra-secure Trezor and software wallet Exodus are top choices.
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KEY TAKEAWAYS
- Investing in cryptocurrencies, Decentralized Finance (DeFi), and other Initial Coin Offerings (ICOs) is highly risky and speculative, and the markets can be extremely volatile. Consult with a qualified professional before making any financial decisions. This article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies, nor can the accuracy or timeliness of the information be guaranteed.
Final Verdict
With many Bitcoin wallets to choose from, including a piece of paper with your public and private keys printed, you have many options when finding the best Bitcoin wallet. Whether you want an easy-to-use online wallet or a super-secure hardware wallet, there’s a good option for your crypto storage needs.
Compare the Best Bitcoin Wallets
| Company | Type of Wallet | Purchase Cost | Incorporated Exchange | Compatible Hardware |
|---|---|---|---|---|
| CoinBase | Self Custody | Free | Yes | Yes |
| Electrum Best for Advanced Bitcoin Users | Hot | Free | No | Yes |
| Mycelium is Best for Mobile Users | Hot | Free | Yes | Yes |
| Ledger Nano X Best Hardware Wallet | Cold | $149 | Yes | Yes |
| Exodus Best for Beginners | Hot | Free | ||
| Trezor Model T Best for a Security | Cold | $214 | Yes | Yes |
What Is a Bitcoin Wallet?
A Bitcoin wallet is a place that stores your digital Bitcoin and validates your transactions when you’re using your Bitcoin. A wallet keeps secret information, called a private key or a seed, used to validate transactions and “sign” them so that your Bitcoin can be used to make purchases or exchange for another asset. This prevents someone else from using your Bitcoin or the transaction from being altered by a third party.
When people refer to a Bitcoin wallet, they often refer to a crypto exchange that offers a wallet as part of their account features. In this sense, the wallet is where all of your cryptocurrencies are kept or where you can keep fiat money for future use.
How Does a Bitcoin Wallet Work?
A blockchain is a shared public ledger where all transactions are conducted from Bitcoin wallets. When a transaction occurs, there is a transfer of value between more than one Bitcoin wallet. Typically, a single party exchange some Bitcoin value for another asset or service with another Bitcoin wallet.
When this occurs, every individual Bitcoin wallet will use its secret data to sign and validate transactions, providing a mathematical proof that the buyer or seller is the owner of their Bitcoin wallet. Your wallet can safely keep as much Bitcoin as you’d like without any limit.
How Much Does a Bitcoin Wallet Cost?
Using a Bitcoin wallet costs nothing if you’re storing Bitcoin in the wallet. However, if you’re completing a transaction, then the owner of the exchange or device that is housing your wallet will charge you various fees depending on what you’re trying to do. Purchasing a wallet could cost anywhere from $0 to $200. If you’re using a wallet as part of an exchange, you’ll likely pay either a flat fee of a few dollars or a percentage of the total transaction value.
How Do You Cash Out Your Bitcoin Wallet?
You can’t convert Bitcoin to cash directly whenever you feel like it, but you can sell your Bitcoin anonymously on the blockchain in exchange for the fiat currency you desire. A crypto exchange can handle the transaction on your behalf and find a buyer so that you can quickly convert the value of your Bitcoin into the cash you need. Every wallet has different rules and periods for transferring your fiat currency over to your bank account, but most can be done in one to three days after the Bitcoin sale is complete.
Methodology
We looked at over a dozen Bitcoin wallets worldwide and decided on the top hot and cold wallets based on security, costs, and customer reviews. Security is a significant consideration, so using a well-used wallet with plenty of security protocols is essential. It’s also important to choose a wallet that works well with more extensive exchanges to complete transactions in the open market quickly.
