- Personal Finance»
- Personal Finance Software
Best Bitcoin Wallet for Beginners
Getting Started with Bitcoin - Choosing Your Wallet
When you first get started with Bitcoin the most important decision you will have to make is which wallet to use. Your wallet is where you will store your coins, and it is also what you will use to send, spend and receive coins.
There are various different types and brands of wallet software available, and your choice of wallet will determine how securely your Bitcoin is stored - and therefore whether, or to what extent, you risk having your digital money stolen by hackers, as well as how easily you will be able to use Bitcoin for shopping or sending money to friends and family, as well as what other additional features you will be able to take advantage of.
It is therefore very important that you take the time to choose the best Bitcoin wallet for you. This article will look at some of the best Bitcoin wallets for beginners, providing a brief review and link for each one. When choosing which products to include on this page I placed the greatest emphasis on security and ease of use. Each of these Bitcoin wallets should be quick and easy for beginners to learn how to use, and should provide you with a good level of security.
Understanding Different Types of Bitcoin Wallet
Before I get on to recommending specific products, I think that it is well worth while taking a moment to review the various different types of wallet that are available. Each of these different types of wallet has its own advantages and disadvantages, so you choice will depend on what your own personal priorities are.
The first distinction which you should make is between wallets which give you control over your 'secret key' and those which don't. The secret key is like an internal password which is used to authenticate any transactions made by your wallet. You can also use it to recover your account if you lose your regular password. Generally it is seen as preferable to use a wallet which gives you control of your secret key. There are several reasons for this. Firstly it means that nobody else can spend or lose your coins. A wallet provider which doesn't give you this option may not actually keep your coins in your specific wallet - they may act like a bank by lending out or investing your coins for profit; if this provider is dishonest or just incompentent they may therefore steal or lose your coins. If you retain control of your secret key you know that nobody else can take your coins away from you, but on the other hand some services may provide fancy advanced features which require them to control the key themselves. In short - if you don't control your key yourself then that may be ok, but you should make damn sure that you trust your wallet provider as much as you would a traditional bank.
In addition to this I have identified 8 different types of wallet. The distinction between these may not be exclusive - meaning that some services or software products may fall under more than one of these headings:
Web Wallets: Web wallets are probably the most popular choice for beginners. You access them like you would any other website, meaning that you can use them from any device, anywhere in the world.
Desktop Wallets: A desktop wallet is stored locally on your own device. This gives you full control over your coins, but also means that you have full responsibility for securing them against hackers.
Wallet Apps: An app, generally designed for use on a mobile device such as a phone or a tablet computer, may actually be a form of web wallet which stores your information on a server and connects via the internet, or a kind of desktop wallet which stores your information locally on your own device - or even a combination of the two! Many web wallet providers also have their own app.
Cold Storage Wallets: Cold storage wallets are designed for long term storage and may require extra time or jumping through a few hoops to actually spend your coins. People with a large number of coins may have a cold wallet - something like a savings account or safety deposit box - as well as a 'hot wallet' for everyday use.
Paper Wallets: A paper wallet is just a print out of all the information you need to receive and spend Bitcoin. It will include your secret key, and a QR code which can be scanned to send you payments. Because it is not stored on a computer, a paper wallet cannot be stolen by hackers, but you still retain full control over your money as you would with a desktop wallet.
Brain Wallets: For the truly paranoid, a brain wallet is simply a nemonic - a memory device for remembering your secret key. Not only does this secure your coins against hackers, but also against anyone who may discover your paper wallet and attempt to use it.
Multi-Currency Wallets: Bitcoin is no longer the only digital currency out there. There are hundreds of different cons, many with unique and interesting features which set them apart from the rest. If you are interested in exploring some of these 'alt coins' as well as Bitcoin itself, a multi-currency wallet makes it easy by allowing you hold a range of different coins in the same place, rather than needing a separate piece of software for each one.
Multi-Signature Wallets: A multi-signature wallet needs more than one person to sign off on a transaction before it is allowed to be completed. There are two main uses for these. The first is a business use, in which one person may enter all the details for transactions, but another person, such as a supervisor or the business owner, may need to check them over and give them the ok before the money is sent out. The second use is for extra security, as a multi-signature wallet means that multiple account would need to be hacked before someone could spend your coins.
What is most important to your when choosing a digital wallet?
XAPO offers a web wallet which is strongly aimed at beginners. It is very easy to use and they even give you some Bitcoin for free when you sign up so you can have a play with some real coin before you even spend any money. You can also increase the number of free coins that you get by referring friends from your email address book or via your twitter account.
For extra security XAPO offers a 'vault' for cold storage. If you transfer coins from your main balance into their vault you have to pay a small fee - 0.12% per year - and in return you get insurance cover which will reimburse 100% of your losses if anyone ever manages to hack into the your vault account and steal the coins. It takes at least 24 hours to transfer coins back from the vault into your regular account so that they can be spent.
When it comes to spending your coins, you can pay in the usual way by scanning a QR code or pasting in a BTC address, or you can send Bitcoin to someone's email or twitter account.
In the near future XAPO are planning to launch a debit card, which will allow you to make purchases at any shop which accepts regular debit cards, and when you do so the appropriate amount of Bitcoin, calculated using the currency exchange rate to your national fiat currency, will be deducted from your wallet balance.
To sign up visit the XAPO Website.
A Screenshot from XAPO
Coinbase is probably the most popular web wallet for Bitcoin at the moment.
In addition to providing a place to store your coins, your Coinbase account can also be linked to your bank account - similar to the way that paypal works - allowing you to easily buy and sell coins for your regular fiat money.
Coinbase is also integrated with a wide range of other services and merchants through its API, making it super-easy to spend your coins at the widest possible range of different places. A range of apps can be downloaded which let you associate your coinbase account with a range of other services, meaning that you can access your coins from other wallets and apps, and also meaning that you can extend and customize the functionality of your Coinbase account with options such as accounting software, sending payments via twitter or reddit, and much more. This means that Coinbase customers enjoy the greatest flexibility and the greatest range of possible features compared to any other product which I am aware of.
A coin vault with offline storage and multi-signature functionality is also coming soon to coinbase for 'cold storage' of large amounts of Bitcoin.
To sign up visit the Coinbase website.
Some of the Apps available from Coinbase
If you would like to try out a desktop wallet to store your coins on your own computer then Multi-bit is perhaps the most beginner friendly option. It is 'lightweight' software, meaning that it will not not ages to download and install and will not slow down your computer, and is has a good reputation for being both secure and easy to use. On a personal note, this was the first Bitcoin wallet which I ever used, and it certainly suited my needs as a beginner.
If you choose this option please read the instructions to encrypt your wallet with a password, and make sure that you have up to date anti-virus software installed on your computer.
To download visit the Multi-Bit website.
Blockchain offers one of the longest running web wallet services. It may not have all of the fancy features of services such as Coinbase or XAPO, but it does offer maximum privacy and security.
You get full control over your private key and your account in general. Blockchain themselves cannot even view your balance let alone access the coins in your account. The service is completely free, and pretty easy to use for beginners.
You can also use a blockchain wallet to receive assets / alt coins from protocols such as mastercoin, which is built on top of Bitcoin - something which you generally can't do with web based services.
To sign up visit the Blockchain website.
Make Your Own Brain Wallet
Additional Resources for Bitcoin Beginners
- The Best Bitcoin Web Wallets
A top list of the best web wallets for Bitcoin and other digitial currencies, with the best features for secure storage, trading and exchange, shopping and more.
- Free Bitcoin and other 'Alt Coins' Every day.
Sign up for free Bitcoins, Litecoins, Feathercoins and other cryptocurrencies. Refer your friends and earn up to 1,250% extra!
- Bitcoin Alternatives: The Best Cryptocurrencies
Alt coin reiew - the best cryptocurrencies to use and invest in as an alternative to Bitcoin.