It was in the year 2008 when Satoshi Nakamoto created the Bitcoins, a peer to peer electronic cash system which is now widely used worldwide. In January 2009, the first block chain was mined and the Bitcoin client was first released to the public, until eventually the Bitcoin network was established.
If you have been trading with Bitcoins, then you are certainly aware that Bitcoin wallets are important before you can buy or sell Bitcoins. The wallet is similar to that of a bank account and that it allows you to receive Bitcoins, store them there for quite some time and then send them to other Bitcoin users.
Remember that there are two main types of Bitcoin wallets and one is the software wallet which you can install on your computer or mobile phone. With this wallet, you will be in complete control of the security of your Bitcoins although sometimes, the software wallet can be a bit tricky to install and maintain. The second type of wallet is the web wallet, also known as the hosted wallet since it is being hosted by a third party.
The web wallet is much easier to use although for this type of wallet, you should be able to put your full trust on the provider in order to maintain a high level of security in order to keep your Bitcoins protected.
- 1 What is a Bitcoin Wallet?
- 2 Top Online Wallets
- 3 Spending & Earning Bitcoins
- 4 How To Use The Top Cryptocurrency Wallets
- 4.1 Exodus
- 4.2 Electrum Wallet
- 4.3 Mycelium Wallet
What is a Bitcoin Wallet?
Technically, it should be understood that Bitcoins are not actually stored in the vault, but there is a private key (secret number) for every Bitcoin address that is saved in the Bitcoin wallet of the person who owns the balance. Basically, opening a bitcoin wallet creates an address for you, with its own private key, so that you can use the key to complete bitcoin transactions.
Even though bitcoins are not actually stored in a wallet they are still protected by its use. As the user, you have to sign every bitcoin transaction with your private key, and which gets stored in your wallet. Bitcoin wallets facilitate sending and receiving Bitcoins and gives ownership of the Bitcoin balance to the user.
The Bitcoin wallets come in two basic forms:
- Hardware wallet
- Software wallet
Hardware wallets are also known as cold wallets. They are referred to as cold wallets because they are stored on a platform that is not connected to the internet, thereby, protecting the wallet from unauthorized access, and other vulnerabilities that a system connected to the internet is susceptible to. Examples of hardware wallets include Trezor, and Ledger Nano S.
A software wallet is a bitcoin application that sits on your computer’s hard drive or mobile phone, and allows you complete control and great security, because each bitcoin you hold is only accessible on your own device.
Software wallets can be in form of a mobile, desktop, or a web application. Because most software are connected to the internet, they are also called Hot wallet. But not all software wallets are hot wallets.
Top Online Wallets
Lets take a look at the top online online wallets.
BitGo is an easy to use, high-security multi-sig wallet, which protects your bitcoin from theft and loss. BitGo uses a 2-of-3 key model, where BitGo holds one key, the user holds a second key, and the third key is stored in a secure offline location as a backup. This means that users maintain full custody of their bitcoin, and BitGo cannot spend or freeze funds. If BitGo were ever to become unavailable, users would still be able to retrieve their bitcoin.
In addition to its secure multi-sig key model, BitGo’s wallets offer additional security features such as spending limits, multi-user access, address whitelisting, and audit logs. By upgrading to a premium account, users can also take advantage of the BitGo Promise, an insurance-backed protection plan against theft and loss.
Coinbase is a type of web wallet that is ideal for beginners. This is because it features a simple design and it comes with several useful features that help both beginners and prod with their Bitcoin exchange. Here is a detailed Coinbase Review.
By signing up for an account with Coinbase, you will be able to send and receive Bitcoins through the mail and purchase and sell Bitcoins directly from Coinbase. Its full featured mobile app is compatible with Android and allows users to have access to all account functions even when on the go.
The founders of Coinbase have a good reputation within the Bitcoin network and they are the leading Bitcoin wallets when talking about legitimacy and security. Above all, they are among the few Bitcoin companies that have never suffered a major hack from since it started its operation.
If you will not mind waiting for a couple of days for your Bitcoins to arrive, Coinbase is a great place to purchase your Bitcoins. They have the easiest platform to use and they are the cheapest as well. After you sign up for an account, you need to link your Coinbase account to your bank account so you can start buying Bitcoins. Coinbase charges only 1% for the service fee and you will receive your Bitcoins after the transfer coming from your bank account will be cleared.
Coinbase is also one of those Bitcoin wallets that double as a web wallet and a mobile wallet. This means that you can buy and sell Bitcoins wherever you may be.
Bitcoin Wallet for Android and Blackberry
Those who are in need of Bitcoin wallets that they can use even when they are on the go can install those wallets that are compatible with Android and Blackberry. There is now a version of the wallet which will work for both Android and Blackberry operating systems. This type of wallet is called the software wallet and you retain complete control over your Bitcoins when using this. The wallet also works great for those phones that can read QR codes as well as NFC, which makes transferring coins to another user's account easier. It is even much easier than writing a check.
Just make sure that you back up your wallet or you might risk all your Bitcoins if your mobile phone gets damaged. To back it up, simply make use of the Backup wallet feature that comes with the app.
If you want an easier and faster way to obtain Bitcoin wallets, all you will do is to access Blockchain.info. When you are on the site, you need to fill out the form and provide the information needed. Basically, Blockchain.info works like a web wallet similar to Coinbase, but it has a simpler setup and you can get access to your Bitcoin account even if you are traveling. Blockchain.info also provides several other services that are useful for all traders within the Bitcoin network.
Electrum is a type of software wallet that allows Bitcoin users to set up an account with high level of security. The software must be installed before it can be used, but the great thing about the software is that it is extremely easy to install. Users will then be given a phrase that consists of 12 words and this will be used to recover all of the Bitcoins in case the computer fails.
The Bitcoin wallets are also encrypted by default in order to protect your account against hackers and other fraudulent transactions. The software is compatible with OSX, Linux, as well as Windows operating system. This software is highly recommended for beginners in the world of Bitcoins since it makes trading with Bitcoins easier.
Another place where you can purchase your Bitcoins is through BitInstant. They are able to provide more than 700,000 in cash deposit locations since they have partnered with ZipZap. With BitInstant, you can get your Bitcoins in only a few hours although be prepared for a little more complexity and cost.
ZipZap also charges $3.95 for the handling fee on top of the 4% that Bitinstant will charge you, so it can be a bit expensive. Also, you need to remember that BitInstant does not work like Bitcoin wallets, so you may have to go through a deposit location and deposit your cash then wait for a little while. It may not have that great feedback, yet it is still one of the best places to purchase Bitcoins.
Another great place to purchase Bitcoins is through LocalBitcoins.com. But unlike your usual Bitcoin wallets, the website works just like a Craigslist for Bitcoins, allowing sellers and buyers in the same area to find each other and then meet up in order to trade Bitcoins for cash. Although this might seem like an easy and fast way to do, there are lots of risks involved on this type of transaction so it is best to exercise proper precautions.
Remember that you will be meeting with some strangers that you just met through the World Wide Web. It is therefore recommended that you meet up with them in a public place and in an area that is not very secluded. LocalBitcoins.com also features a rating system that can help you to easily find a trustworthy seller or buyer, so make sure to check the rating of the person you plan on meeting with.
Online Bitcoin Exchanges
You can also choose to exchange Bitcoins through the online Bitcoin exchanges. These websites work like Bitcoin wallets where you can store your Bitcoins as well as your dollars into your account and then use it later on to purchase Bitcoins in the market. This also allows you to trade Bitcoins in the same way that you trade stocks. The biggest disadvantage of using Bitcoin exchanges is that it can be a bit difficult to fund your account with dollars or transfer your dollars out right after selling the coins.
Camp BX is also recommended. However, the company has recently suffered a hacking attack on their site, so it is not advisable to deal with them for now. But as soon as they will be able to settle this issue, Camp BX is definitely a great place to acquire your Bitcoins, so better watch out for updates.
Just like Camp BX, Mt.Gox has also faced lots of controversies in the past. As a matter of fact, they have declared bankruptcy early this year and are no longer in operation as of this time. But before any of the Bitcoin wallets came into the picture, it is Mt.Gox that is considered as the best place to trade Bitcoins.
They offered the highest trading volume at that time. One of the controversies that Mt.Gox has faced has something to do with their Dwolla account, which was frozen because of improperly registering it as a money transmitter. Due to such crackdown from the government, Bitcoin users were not able to send to and from Mt.Gox their dollars.
Bitcoin is a currency without borders, thus, you can find several other wallets and many other exchanges that can help you in buying and selling your Bitcoins internationally. There are Russian based Bitcoin exchanges as well with a really great interface. You can also find an EU based Bitcoin exchange, which is the Bitstamp.
Aside from the Bitcoin wallets already mentioned, there are several other wallets that are ideal for beginners of the Bitcoin network to use. If you want something that is more challenging, then Armory would be a good choice. Their interface might be a bit complicated, but you can guarantee the highest possible security when you choose them as your wallet of choice.
Aside from Armory, another recommended Bitcoin wallet is the Bitcoin-Qt client. It is highly reliable and trustworthy and is extremely easy to use.
Spending & Earning Bitcoins
Sending Bitcoins is just as easy as merely copying and pasting an address. After that, you need to key in the amount that you want to send and then click on the option that says “send”. That's how simple it is. This might seem difficult for people who are familiar with providing credit card information when shopping online, but this method allows the sender to be able to have full control of the payment process.
The transactions are also irreversible and essentially, sending Bitcoins is like sending an email. You will put in the address of the person to whom you will be sending Bitcoins to and then there is no going back right after you click “send”. So just like with sending emails, make sure that you finalize your Bitcoin transaction before you click send.
Do not worry if the payment that you have sent to the recipient has not reflected yet. It might take a few minutes before the payment will be cleared, but this will also depend on the network as well as the Bitcoin wallet that you have been using. In most instances, the transaction will not be longer than ten minutes. There are also some Bitcoin exchange services that will require up to six confirmations which could take up to an hour before they will recognize your payment.
In order to receive Bitcoins, you must first choose a receiving address from the Bitcoin wallet you are using. Then provide it to the person who will be sending you Bitcoins and then wait for them to send the Bitcoins you have purchased. And as stated, it could take about ten minutes for the transaction to clear and to be confirmed by the Bitcoin network.
Any Bitcoins that you have is at risk to be stolen or be taken by a third party individual if the security of your Bitcoin wallet is weak. This can also happen due to computer failure. Therefore, it is highly advised to keep several backups in a highly secure area.
Just imagine that you have a hefty amount of money stored in a safe and that it is in a public area where everybody can readily access and the only protection it has is the combinations. If you think you can easily forget the combinations, then write it down on a paper and keep it somewhere safe and secure. This way, you can be sure that no one will be able to have access to it.
There are two ways that you can end up losing the Bitcoins in your Bitcoin wallet. First is when you lose your combinations, since the safe cannot be opened by anyone. And second, if someone stole the combinations and will then access your wallet and steal whatever Bitcoins you have there.
How To Use The Top Cryptocurrency Wallets
Here we'll give you a step by step guide to set-up and use the top cryptocurrency wallets below:
Exodus wallet is a multi-cryptocurrency wallet designed with an easy-to-use user interface to give users complete control over their cryptocurrency assets. It is the first desktop wallet that offers full compatibility with ShapeShift – a popular instant cryptocurrency exchange supporting dozens of tokens. This means Exodus users have access to nearly a dozen cryptocurrencies.
Exodus stores cryptocurrency assets directly on the machine. Because Exodus is a lite wallet, users will never have to download the whole blockchain to the computer.
- Exodus is a desktop wallet
- Compatible with Windows, Mac OS and Linux.
- It should be noted that only 64-bit systems work for Windows and Linux users.
|Bitcoin (BTC)||Gnosis (GNO)|
|Ethereum (ETH)||OmiseGo (OMG)|
|Litecoin (LTC)||Qtum (QTUM)|
|Dash (DASH)||Basic Attention Token (BAT)|
|Golem (GNT)||Civic (CVC)|
|Augur (REP)||SALT (SALT)|
|Dered (DCR)||Ethereum Classic (ETC)|
|EOS (EOS)||FunFair (FUN)|
|Aragon (ANT)||District0x (DNT)|
To install Exodus, download the latest version from www.exodus.io/releases.
Note that Windows 7 users will need to ensure that .NET Framework 4.5.2 is installed, if it is not installed prior to installing Exodus wallet, the installer will attempt to download and install it for you. In the event that the .NET install fails, you can download the .NET installer from the Microsoft website and install it manually and then install Exodus again.
.NET Framework 4.5.2 download link: https://www.microsoft.com/en-us/download/details.aspx?id=42643. Click on your preference with respect to your operating system and the file will be downloaded automatically.
Double click on the downloaded file, a security warning will be popped-up, click on the run button.
After the installation, launch(double-click) the wallet from the icon on your desktop, and the wallet should appear as shown below:
For those who had a back-up for the previous wallet they’ve used before, they can select the restore from back-up option, and add the file to the application source.
The portfolio shows list cryptocurrencies you have in your wallet, and the $ equivalent.
The wallet displays the amount of a specific coin you have in your wallet at a specific time. In the image below, the wallet has a balance of 0.0BTC.
Funding Your Wallet
The easiest way to add cryptocurrency assets to your Exodus wallet is to first purchase them with your national currency (e.g. US dollars). You can then transfer them to your Exodus wallet for safe storage.To receive BTC (or any coin as the case may be), click on the RECEIVE button, and the address will be displayed to you as shown below:
Then, you need to copy the address (yellow color) and paste it into the wallet from which you are sending to EXODUS.
To send cryptocurrency funds, click the WALLET button on the left sidebar and select the asset you want to send.
Enter the address of the recipient and click the SEND button.
The exchange allows you to convert your coins directly from your walletAs mentioned earlier, SHAPESHIFT is integrated into EXODUS. With this, you can exchange you BTC to any of the supported altcoins (as listed above), or from one altcoin to other, or from altcoin to BTC as displayed below:
All you need do is to select the coin from which you intend to convert, from the drop down on the left to the other on the right, by selecting also from the dropdown. Enter the amount you wish to exchange, and press the EXCHANGE button.
Electrum is also a desktop bitcoin wallet that is compatible with multiple operating systems. It is a cold wallet storage, in the sense that only you manage your private keys. It was developed by a German computer scientist and designed to be lightweight and efficient.
Over the years, various developers have contributed to its source code, making it one of the most trusted wallets available. Although there are more than 900 cryptocurrencies on the market today. This ensures that the platform remains fast and efficient at all times.
One of Electrum’s core features is its integration with the major hardware wallets, such as TREZOR, KeepKey and Ledger Nano S. This means you can integrate Electrum with any of these premium hardware wallets.
- Desktop and mobile
- Compatible with Windows, Mac, Linux and Android. Also, compatible with the major bitcoin hardware wallets.
- Bitcoin (BTC) ONLY.
To install Exodus, download the latest version from electrum.org and run it. You will now undergo the wallet creation process. Use the default options in the first two screens and select Auto connect and Standard wallet (for a more advanced setup with increased security, choose Wallet with two-factor authentication).
Next, Electrum will generate your wallet backup seed – a sequence of 12 words, which allows you to restore your wallet if something unforeseen happens to your device. You MUST keep the backup seed secure. Also, it is recommended to write it in a safe note.
To make sure that you wrote down the backup seed correctly, you will be asked to re-enter the 12-word sequence.
Next, you will be able to choose a password to encrypt your wallet. This password will help protect your Bitcoins in case someone gains access to your computer or copies your wallet file. This password will NOT be required to restore the wallet from the backup seed, though.
After choosing the password, the main Electrum window will open – you are done with setting up. You’ll see on the bottom left corner that the base unit is in mBTC. To make things easier, and avoid confusion, you can change the Base unit to BTC. This will make Electrum display the transaction amount in bitcoins.
Funding Your Wallet
To receive bitcoins into your wallets, make sure Electrum is online (green icon bottom right) * Click ‘Receive' and copy the receiving address from your clipboard (there's a little blue icon for that at the right). Note, The Receiving address is your Bitcoin wallets address.
Go to the wallets from which you wish to send your Bitcoin, click Send and Paste the address you copied from Electrum Specify the amount of BTC you want to send, click Continue. Confirm the 2-factor authentication and send.
Upon receiving a payment, Electrum will display a notification.
There will be a notification from the sending wallet confirming the transaction. Go back to Electrum and wait until it confirms there the BTC has been arrived. You can check that under the Addresses tab
To increase anonymity and improve security, you will be generated a new Bitcoin address each time you want to receive a transaction. Copy this address and paste it into the wallet from which you wish to send the BTC to your Electrum account.
To Send Fund From The Wallet
To send your BTC from Electrum, click on the Send tab, past the address of the receiving wallet into the space provided, insert the amount you are willing to send and click on the Send button
The Mycelium is a cold mobile wallet. With the Mycelium Bitcoin wallet, you can send and receive Bitcoins using your mobile phone. The unparalleled cold storage functionality allows you to 100% secure your funds until you are ready to spend them, all of these can be done on one account or multiple accounts that have enterprise-level security features.
Using Mycelium, you have a wide range of benefits including:
- 100% control over your private keys, they never leave your device unless you export them
- No blockchain download, install and run in seconds
- HD enabled – manage multiple accounts and never reuse addresses (BIP32, BIP44)
- Ultra-fast connection to the Bitcoin network through our super nodes
- Watch-only addresses & private key import for secure cold-storage integration
- TREZOR and LEDGER hardware wallets
- Bitcoin (BTC) ONLY
You can download Mycelium wallet to your android phone here
- Protect your wallet from theft with a PIN code
First go to settings (found in the top right corner by clicking the vertically stacked three small squares)
- Click “set pin code” and Set a pin code
It should be noted that you must secure the pin, and you must not forget the pin. Without the pin, you won’t be able to access the wallet the next time. In case you lose the phone , you can easily recover the wallet from another phone using this code.
Also, any time you want to make a transaction or change important settings, this screen will appear:
Click on the three small squares in the top right corner and choose Backup
- Enter your pin code to access the recovery phrase
- The wallet will show 12 words, one at a time.
- You will be prompted to write down the 12 words to make sure you have correctly written them down
- Make sure to write them physically, with pen and paper.
- Important: you will not be able to take a screenshot. Do not write those words on a computer or worse, in an email! Anybody with these 12 words can have access to your bitcoins.
- Mycelium will ask you to input the words again to make sure that you wrote them down correctly
In case of device theft or loss your bitcoins cannot be spent without your PIN code. However, experienced hackers can crack PIN codes without too much difficulty. If you think this is the case, make sure to quickly follow the next steps. Don’t panic! If you lost your pin code and you have the 12 words written down, simply uninstall Mycelium and download it again. If you lose your phone, you need to get a new Android device and re-install Mycelium. When you open the Mycelium app for the first time, it will ask you if you want to create a new wallet or recover a wallet. Click the recover wallet option. You will be prompted to enter your recovery phrase and your wallet (with all its funds) will be restored!
Funding The Wallet
- To receive a payment, go to your Balance tab and select “Receive”
- (Optional) Request an amount by clicking on the keyboard icon under “Optional Amount”
- Share your bitcoin address with the sender by:
- Letting them scan your QR code
- Manually sharing your address with them by using either “Copy to Clipboard” and then pasting it in a message or “Share Bitcoin Address” which will give you various sharing options
- Wait for the sender to send the funds
- You can check to make sure you have received the funds by going to the Transactions tab
- NOTE: you will not be able to send the funds you have just received until you have received one confirmation (approx. 10 minutes)
Sending Fun From The Wallet
- To send a payment, go to the BALANCE tab and click the Send button
- You can either:
- Scan the recipient’s QR code using “Scan QR Code” (this is the simplest and fastest option)
- Paste a copied bitcoin address from your clipboard using Clipboard
- Or manually enter their bitcoin address using Manual Entry
- Once you have their address, enter the amount you wish to send by clicking on the keyboard icon under Enter Amount
Also, you can choose which currency to enter the amount in (BTC, USD, CAD, etc) by clicking on the displayed currency in the top right-hand corner
If you are making an online payment, the amount to send will sometimes be automatically entered when scanning the QR code of the merchant. In this case, DO NOT CHANGE the amount. Try to always know from the merchant the amount of bitcoins he wants to receive, and not the amount of dollars (or euros) he wants to receive.
- Once you are satisfied with the amount, click “Ok” to return to the payment screen
- Verify that all the information is correct and then click “Send”
- Enter your PIN code to confirm the transaction and you are done! You can check your transactions under the Transactions tab
How To Send Fund From Cold Storage
Paper wallets are a great way secure bitcoin funds, and Mycelium makes it easy to spend cold storage funds.
From the “Balance” tab, tap the camera icon.
Importing HD Public Key
Hierarchical deterministic (HD) keys are a type of deterministic bitcoin wallet derived from a known seed, that allow for the creation of child keys from the parent key. … BlockchainMe is a web application where users can create an identity document and sign it with their PGP key in the browser.
Why would you want to import an HD public key to Mycelium? It can help you track the balance of other Bitcoin wallets.
Let’s say you use Electrum on your computer and want to monitor your balance on your phone. Import the HD public key from Electrum into Mycelium. What’s great is that you can also import HD public keys from hardware wallets like TREZOR or Ledger. This makes monitoring or receiving payments to your cold storage balance easy.
To add an HD account, navigate to the “Accounts” tab. From there, tap the key icon in the top right corner.
Mycelium offers a somewhat low-key feature that’s useful if you’re lucky enough to live near a city. Mycelium Local Trader helps match you with other Bitcoin buyers and sellers in your area. If you have people near you this makes it super easy to buy and sell Bitcoin with cash!
To activate the Local Trader feature, click the three dots in the top right corner of the wallet and then click “Settings”.
Using Mycelium With Hardware Wallets
Mycelium supports TREZOR and Ledger Nano S hardware wallets. While you can’t setup a hardware wallet with Mycelium, it’s easy to use an already initialized TREZOR or Ledger with an OTG cable.