Cryptocurrencies, such as Bitcoin, are a relatively newer investment in the financial markets.
Since its inception in 2009, cryptocurrencies quickly gained popularity as a risky yet lucrative investment. Today, the highly volatile investment, such as Bitcoin, is still worth thousands of dollars and serves as a store of value that is also appreciated.
Given its economic significance, finding out where to store your currency is as crucial as investing in it in the first place. So what are some of the best Bitcoin wallets in 2020?
In this post, you will find out about the five best Bitcoin wallets in 2020, where you can safely accommodate your cryptocurrency. Different Bitcoin wallets offer various features. However, some of the key factors that make Bitcoin wallet desirable are also highlighted in this post.
Lastly, you get answers to some of the frequently asked questions that will surely help you find the best Bitcoin wallet for your cryptocurrency. But before we get started, let’s look at what a Bitcoin wallet is and some types of Bitcoin wallets.
What is a Bitcoin Wallet?
A Bitcoin wallet is a software program where you can store your Bitcoins. Technically, Bitcoins are not physical coins; however, given their considerable value, they are an expensive investment that needs safe storage.
A Bitcoin wallet serves the same purpose as a vault where you can store your valuables and access it using a private key.
In the case of a Bitcoin wallet, a private key is a secret number that corresponds to the Bitcoin address using which you can access your wallet and trade your cryptocurrency.
Types of Bitcoin Wallets
Bitcoin wallets also referred to as digital wallets, are available in several types, including
This type of Bitcoin wallet is installed on the desktop and provides complete control to the user. The desktop functions as a location for which you get a security key to send and receive your cryptocurrency.
Like desktop wallets, mobile wallets are installed on a mobile phone that allows access to the wallet. Mobile Bitcoin wallets can be compatible with both Android and iOS.
Unlike desktop and mobile wallets that provide access through the device, web wallets are accessible from any location or through any device. Web wallets are one of the most popular types of Bitcoin wallets.
Hardware wallets are the most secure type of wallet for storing any amount of cryptocurrency.
It involves using physical equipment such as a USB, which is connected to the computer via a USB port. The added security comes at an additional cost, which is the device’s cost that often ranges between $100 and $200.
Hot Wallets vs. Cold Wallets
Another way to classify Bitcoin wallets is through their connection to the internet. A hot wallet is connected to the internet and is linked with keys that facilitate cryptocurrency transactions. Moreover, since a hot wallet is connected to the internet, it is more vulnerable to security breaches and hacks.
On the other hand, a cold wallet is not connected to the internet. As a result, it is less prone to hacks and thefts.
Now that you are aware of different types of Bitcoin wallets let’s look at the five best Bitcoin wallets for the year 2020.
Best Overall: Coinbase
- Type: Mobile and web wallet. (Hot wallet)
- Exchange Incorporated: Yes
Coinbase is one of the mainstream cryptocurrency exchanges in the U.S. that allows investors to buy, sell, and store cryptocurrencies.
Using Coinbase, you connect your bank account and easily transfer currency in or out of your wallet to purchase and store Bitcoin and other cryptocurrencies
This one-stop solution that offers exchange as well as storage. Moreover, its simple and user-friendly interface makes it a great place to start for people who are new to cryptocurrency investments.
The exchange allows you to invest in more than 25 cryptocurrencies, whereas the wallet can hold as much as 20 cryptocurrencies. Another great feature of Coinbase is that it can be accessed through your mobile phone regardless of location.
Moreover, Coinbase Earn provides you free access to learning videos that can sharpen your Bitcoin investment skills. But it is also an earning opportunity where you get crypto for every quiz you complete.
Security is still one of the struggling aspects of Coinbase. While the company has a strong security track record, there have been instances of downtime. Moreover, the high transaction cost is another undesirable feature of this Bitcoin wallet.
- One-stop solution – combines exchange and wallet.
- It offers a secure way for investing, trading, and storing cryptocurrencies.
- Easy to use interface makes it an ideal choice for beginner investors.
- One of the biggest exchanges.
- Simple, user-friendly interface.
- Easy withdrawal of money when you sell cryptocurrency.
- Coinbase Pro that offers more features and is cheaperis free for anyone with a Coinbase account.
- Higher fee structure.
- More vulnerable to security breach compared to hardware wallets.
Runner up: Binance
- Type: Mobile and desktop wallet (Hot wallet)
- Exchange Incorporated: Yes
Since its creation in 2017, Binance has established itself as one of the leading cryptocurrency exchanges worldwide, offering a wide range of cryptocurrencies for investors.
With more than 100 cryptocurrencies to choose from, Binance is an investment-haven for crypto enthusiasts. The large and ever-growing list of trading products provides some of the most comprehensive tools for traders worldwide.
It is not just an excellent option for investors but is also one of the favorite exchanges for several crypto companies. Since so much is happening at Binance, buying and selling your cryptocurrency is relatively simple.
And with a high volume of trading, security becomes an even more critical consideration. Two-factor authentication provides foolproof security.
However, given the variety of products, Binance is not a very user-friendly option for new users.
- A renowned crypto-to-crypto exchange.
- Over 100 cryptocurrencies to choose from.
- Lowest fee in the industry.
- ICO Launchpad.
- Two-factor authentication for better security.
- More than 100 cryptocurrencies to choose from.
- Low trading fee.
- Enhanced Security.
- Might be confusing for beginner level investors.
- Mixed reviews on customer support.
- Type: Web wallet
- Exchange Incorporated: Yes
Exmo, a UK-based cryptocurrency exchange, is one of the top 10 exchanges in the world. Established in 2013, Exmo has a global reach, and traders from over 200 countries worldwide can trade on this exchange.
However, the famous trading destination does not allow U.S. traders to buy or sell cryptocurrencies. The very basic yet classic interface is simple to use for both beginner level and expert crypto traders.
Moreover, it offers an Over-the-Counter (OTC) trading service, which is very similar to stock exchanges. Additionally, each customer at Exmo will have access to a web-based wallet. The wallet can be used to store Bitcoin and other cryptocurrencies.
Offering services to global customers, Exmo has vigilant security features. It is supported by SSL and incorporates two-way authentication and I.P. recognition for foolproof security
And its security is not the only desirable feature, but it offers excellent customer support. Additionally, the exchange uses a flat rate model of 0.40 % and charges a withdrawal fee of 0.0004 BTC as you withdraw Bitcoin. Its rates are far lower than the industry average.
Perhaps the only undesirable aspect of Exmo is its ever-changing terms and conditions for withdrawals and deposits, so traders are always speculating.
- User-friendly interface,
- Ease of payments,
- OTC trading service,
- Exceptional security – Two-factor authentication and I.P. recognition, and
- Great customer service.
- Low trading fee.
- Variety of cryptocurrencies to trade with.
- 24/7 customer support.
- Margin trading is not supported.
- U.S. customers cannot trade.
- Ever-changing terms and conditions for deposits and withdrawals.
Best Hardware Bitcoin Wallet: Trezor T
- Type: Hardware wallet (cold wallet)
- Exchange Incorporated: Yes
The second generation of hardware wallets, Trezor T, comes from the reliable manufacturer Trezor and is one of the best hardware Bitcoin wallets available in the industry.
It is simply to set up and use and has an intuitive interface that gives traders access to third-party exchanges directly on the website. This unique feature, along with its touch screen, adds to the convenience.
Moreover, this cold wallet comes with a USB cable to connect with your laptop, desktop, or smartphone. But regardless of the device you use to connect, Trezor T is super safe, offering the industry’s leading security.
Currently, Trezor T supports almost 1,400 cryptocurrencies and since it is integrated with exchanges, you can quickly liquidate your Bitcoin and other cryptocurrency.
- Industry-leading security,
- Supports nearly 1,400 cryptocurrencies,
- Intuitive interface with built-in exchanges,
- Ease of set up and use,
- Great customer support.
- Web-based interface with built-in access to exchanges.
- Wide variety of cryptocurrencies.
- Access to multiple wallets simultaneously.
- It is highly-priced.
- Small touch interface which can be challenging to use.
- May be confusing to use, especially for beginners.
Runner-up: Ledger Nano S
- Type: Hardware wallet (cold wallet)
- Exchange Incorporated: No
Introduced by the industry leader, Ledger, Nano S is the first generation hardware wallets. Compatible with thousands of cryptocurrencies, Ledger Nano S is a few hardware wallets that are not exchange incorporated.
However, it gives access to the Ledger Live software, showing every cryptocurrency transaction that you perform even if you have deleted a specific wallet.
Unlike its successor Nano X that allows you to store 100 wallets simultaneously, the Nano S user can store up to 18 wallets. Moreover, it does not come with a USB cable, making it difficult for smart phone users to connect the device.
The simple to use Nano S is a great choice for beginner crypto traders who prefer security at an affordable price.
- Pocket-friendly hardware wallet,
- Highest level of security,
- Open-source Ledger Life software
- Convenient user interface.
- Secure yet affordable.
- Customer and community support.
- No USB cable or Bluetooth connectivity.
- Can store up to 18 wallets.
Buying Advice – Factors to Consider
The cryptocurrency market has witnessed exceptional growth since its inception in 2008, particularly in the last 3 years.
And with so much happening in the cryptocurrency market, choosing the best Bitcoin wallet for your investment is challenging. Here is a list of nine considerations that will help you choose the best Bitcoin wallet.
Perhaps the most important thing that you need to consider when choosing a Bitcoin wallet is company reliability. You should be confident that your chosen Bitcoin wallet company is run by reliable industry professionals who are experts in their field.
Moreover, you need to be aware of the company’s mechanism for storing your Bitcoin or any other cryptocurrency. Check for details such as who has custody of your wallet’s key, what data management practices are being used, and if there are some very obvious process glitches.
The other most important consideration is security features. Over the last few years, security has been a significant concern for crypto-investors.
Crypto-exchange hacks have resulted in the loss of investment of several crypto enthusiasts, so make sure you give special thought to the security features.
It is best to look for features such as two-factor or biometric authentication. Inquire whether your desired Bitcoin wallet offers additional security features such as multi-signature support and automated logout sessions.
Traditionally, Bitcoin wallets have supported only one cryptocurrency. However, as an increasing number of investors invest in multiple cryptocurrencies, crypto traders are looking for Bitcoin wallets that can store more than one cryptocurrency.
As a result, an opportunity to hold various currencies is another major consideration for crypto enthusiasts today.
Ease of Use
Gone are the days when technology was only for professionals and techno-geeks. Today, an increasing number of people are using technology in almost every aspect of their lives, including trading and storing cryptocurrency.
And as users of Bitcoin wallets, you would not want to choose a wallet that is hard to use, confusing, and visually unappealing. Because of this, ease of use is what most crypto traders look for when choosing the best Bitcoin wallet.
Type of Wallet
Referring to the earlier section, there are several types of Bitcoin wallets that you can choose from. Given the very nature of financial transactions today, most people prefer hot wallets.
However, there is a risk of hacking and fraudulence involved. As a result, most risk-averse crypto traders still prefer cold wallets. Investors can choose between web wallets, mobile wallets, desktop wallets, and paper wallets depending upon individual preferences and needs.
Compatibility is one of the most sought after features for on-the-go investors and crypto traders who use several operating systems and platforms.
It allows you to synchronize your cryptocurrency wallet with several devices so you can switch easily.
Check for compatibility features whether your wallet is compatible with desktop/laptop platforms such as Windows and MacOS. Moreover, check whether your hot wallet app is available for download across iOS and Android platforms.
When choosing the best Bitcoin wallet for your investment, make sure you go for companies that offer prompt and efficient customer service.
If you are not sure about the customer service, you can get an idea by looking at the number of clients. Very often, the number of clients is a reflection of the company’s customer service.
Backup is another important factor that you need to consider when choosing a Bitcoin wallet. Does the wallet company offer a backup for your wallet? Moreover, is the backup encrypted? What is the backup restoration process?
Make sure you thoroughly check the backup process before you finalize a Bitcoin wallet.
Bitcoin wallets need updating and system up-gradation. When you are looking for the best Bitcoin wallet, it is best to go for the one that undergoes timely systemic improvements so that the investors can get the best and most desirable features.
Investors have varying preferences and needs. However, by keeping these nine factors in mind, you are one step closer to finding the best Bitcoin wallet.
Bitcoin Wallet FAQs
Do You Need a Bitcoin Wallet?
Bitcoin or any other cryptocurrency does not exist in a physical state. These digital currencies are a decentralized network controlled by the users and not by any central authority.
The cryptocurrencies act pretty much like cash on the worldwide web. However, since they cannot be stored anywhere, you need a Bitcoin wallet. It allows you to access your Bitcoin address and signatures, both of which need to be stored securely.
How Does Bitcoin Wallet Work?
On the user-end, a Bitcoin wallet is more like a mobile app or desktop program that allows storage space to investors where they can store their Bitcoin.
Some Bitcoin wallets are exchange incorporated with works in the same way as stock trading. These Bitcoin wallets allow investors to buy and sell cryptocurrency on the exchange.
On the back-end, a lot is more happening. A Bitcoin network is a public ledger known as blockchain that records every Bitcoin transaction. As a result, the user can verify the transaction since Bitcoin is a digital currency.
Moreover, each transaction is protected by digital signatures that correspond to a unique sending address (the device from which the wallet was accessed). It allows users to have full authentication control and prevents any transaction alteration once the signature has been issued.
How Do I Pay Someone With Bitcoin Wallet?
Payments through the Bitcoin wallet is as simple as payment through any other account.
Your Bitcoin wallet application or program on your smartphone or desktop allows you to make payments by merely entering the recipient’s address. You will also have to add additional details such as the payment amount and press send.
For making transactions more straightforward, you can also scan Q.R. code using your app, and you will get your recipient’s address. So all you have to do is to enter the payment amount, and you can complete the transaction in no time.
How Do I Add Bitcoin to My Wallet?
To add Bitcoins to your wallet, you will have to access your Bitcoin wallet app, but this time, you have to choose “receive.” Your Bitcoin wallet will generate an address that allows you to receive Bitcoin.
If you are using a desktop version, you can copy that address using a click, and if your Bitcoin app is installed on the phone, you can simply tap the Q.R. code.
Once you provide this address to your exchange or to the person sending you the Bitcoin, your desired cryptocurrency will be added to your wallet.
Is a Hardware Bitcoin Wallet Better?
If security and reliable cryptocurrency storage is a concern, then hardware Bitcoin wallets are the best choice. A hardware Bitcoin wallet allows you to have a separate physical key that you can store in a physical location.
Moreover, since the device is physical, it gives your protection against internet-based tools, which are more vulnerable to hacks.
And lastly, you can always plug and play your hardware Bitcoin wallet even if your device is infected by malware or virus. However, the hardware comes at an additional cost.
A hardware Bitcoin wallet is a better choice, but it all depends upon personal preference and needs.
Given the worth of Bitcoin and other cryptocurrencies, choosing a Bitcoin wallet is not a simple decision. Only with a lot of preparation and learning, and some experimentation, you will be in a position to find out the best Bitcoin wallet for your cryptocurrencies.
We hope that this guide has offered some essential guidance and a basic understanding of the best Bitcoin wallets in 2020.
Using this guide as a starting point, you are already aware of the five best Bitcoin wallets you can find in 2020. You also know some of the critical factors that you should always consider when choosing a Bitcoin wallet. So we hope you will make a more confident choice.