What types of Bitcoin wallets are available and which should I choose?

Hello Reader,

We’ve already explored what a bitcoin address is and how they are protected by cryptography. Now we will learn what bitcoin wallets are, which options are available and how you go about using one. Yes, this is the post that gets you on board the digital currency train.

A wallet is simply a collection of bitcoin private keys which enables you to use multiple bitcoin addresses with ease

Generally, your wallet will be created by a Bitcoin application as part of the initial setup process. There are two ways that applications generate keys for your wallet:

Standard where a set number of keys are generated at wallet creation. You will need to save a copy of the wallet file itself and write down your password. If you ever use more than the initial batch of keys (e.g. as change addresses, remember you will need to save a new backup of your wallet.

Deterministic where a seed is generated at the wallet creation. This seed is used in an algorithm to derive a never ending series of keys. Knowing the seed is enough to recover all of the keys.

Bitcoin wallet types

There are many different types of Bitcoin wallet, so first let’s take a look at each of the key ones:

Desktop wallet apps

A desktop wallet is an application that you can download and run locally on your computer. There are many variants, and all platforms (e.g. Windows, Mac OS, and Linux are supported. You control the private keys and therefore have full control over your coins. Your wallet is only as secure as your computer, if it is compromised (e.g. by a virus or trojan), it’s likely that you will lose your coins. Desktop wallets can be further divided into those which download the entire blockchain (slow but secure) and SPV wallets which connect to a third party for their record of the blockchain (fast but a little less secure).

Mobile wallet apps

A mobile wallet is an app that you can download and run locally on your smart phone. Again there are multiple to choose from and both iOS and Android are supported. Generally, you control the private keys and therefore have full control over your coins (although this is dependent on the app). Your wallet is only as secure as your phone, if it is compromised (e.g. by a virus or trojan), it’s likely that you will lose your coins. Mobile wallets are generally SPV wallets.

Online wallets

An online wallet is one hosted by an online provider. They manage the wallet software and allow you to access your coins via their website. They are easy to use but beware, you do not control private keys so if the provider is compromised or disappears, so will your coins.

Paper wallets

A paper wallet is normally just a public / private key pair that has been generated on an offline computer (or even manually with dice sometimes). People normally write or print these out on a few pieces of paper and secure them in safe spaces. You control your keys and there is no risk of them being hacked. This process is more difficult than the rest and doesn’t give you simple access to your coins.

Brain wallets

A brain wallet is similar to a paper wallet, but the address or key is memorised by the individual rather than written down. The advantage is that it is absolutely secure (barring torture!). The disadvantage is that you are likely to eventually forget your wallet or seed. But you have a great memory right? There are many stories on Bitcoin forums of people forgetting brain wallets, so not advised.

Hardware wallets

A hardware wallet is a physical device that looks like a USB stick. The wallet itself contains your private keys in a secure element. When you want to spend some coins, you connect it to your computer (or phone), open compatible wallet software, create a transaction and then request for it to be signed. At this point your hardware wallet will flash asking whether you wish to proceed. Assuming you do it will sign the transaction (note it doesn’t give your computer the private key). The advantage of a hardware wallet is that they are as secure as a paper wallet but easy to use. The disadvantage is the cost and the fact they are almost an advertisement asking to be stolen. Hardware wallets will be the subject of a standalone post, so look out for it soon.

So which type should I choose?

This is ultimately a personal choice based on your specific circumstances and preferences. You will generally want to consider these questions:

How much do I have to protect?

If you are only looking to store a relatively low amount of coins (e.g. less than $1,000), then a mobile wallet or online wallet are the easiest options whilst you learn more about crypto currency and start to increase your holdings. If you have more than that, I would first start with a desktop wallet and transition to a paper or hardware wallet as your holdings become more substantial.

Do you need your wallet to be mobile?

Then a mobile wallet or online wallet are your best bet.

Do you not trust an online wallet provider or your personal devices security?

Then your only options are a paper or hardware wallet.

What do you use?

I’ve been on a journey. I started with an online wallet when I was dipping my toe in the water. Then I transitioned to a desktop wallet (technically airgapped which is another story) and now I use a hardware wallet.

What are some examples of desktop, mobile and online wallets?

Desktop wallets

bitcoin core

Bitcoin Core

Bitcoin core is written by the core developers of Bitcoin. It operates as a full client and requires the entire blockchain to be downloaded. It generates keys in a standard batch rather than deterministic manner.



Electrum is all about speed and ease of use. It is an SPV wallet so doesn’t require the whole blockchain to be downloaded. It is also a deterministic wallet which provides you with a seed to write down.



Armory is an advanced wallet for power users. It requires the full blockchain to be downloaded but uses deterministic wallets. Armory also allows for the creation of airgapped cold storage wallets.

Mobile wallets


Breadwallet is available for iOS and android and is all about simplicity. Check out my guide to breadwallet here.



Electrum is all about speed and ease of use. It is an SPV wallet so doesn’t require the whole blockchain to be downloaded. It is also a deterministic wallet which provides you with a seed to write down.

Online wallets


Coinbase is the biggest online Bitcoin exchange. It provides you with a simple to use online wallet. We will cover Coinbase in more detail in an upcoming post on buying bitcoin. Note that you do not own the private keys.

Which of these would you recommend?

For someone completely new to crypto currency and Bitcoin, I would start with Coinbase. They are well established, secure and used by millions. Beware that when using an online service, such as Coinbase, you do not have access to the private keys, so you are completely trusting the third party. This is fine for small amounts, but you should seriously consider setting up your own private wallet once you have a reasonable holding.

Once you have built up some confidence, I’d setup an Electrum desktop wallet or Breadwallet mobile wallet, dependent on your preference.

If you find yourself with a substantial holding and don’t wish to purchase a hardware wallet, I’d look into Armory’s cold storage feature.

That’s all folks.

Join me next time as I explain the various ways you can acquire bitcoins.

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Check out this article on Steemit

Yours, X.

21 thoughts on “What types of Bitcoin wallets are available and which should I choose?

  1. I love your articles. So well written, exciting and clear. I have a question.

    I was given a Physical Coin which doesn’t seem to be mentioned here. It has 1 BTC loaded on it. I have the public key on the back and have checked online and that says it is 1 BTC so all looks good. I believe/have been informed that if I take the hologram sticker off then that will reveal the private key. However, it all seems quite easy. Too easy in fact. Is that it? Is it a safe option?

    I wonder if I should take the hologram off, get the private key and write it down for a family member to keep a copy of just in case of emergency but then I’ve revealed the private key and (silly question but) what then if I lose the coin someone can just cash it in?

    Newb, been looking for days for somewhere to post this question and this seems to be the best place.

    Thanks again for your articles… working my way through them. Excellent concise writing.

    1. Hi BTCLDN,

      Firstly, thank you for the kind words – great to hear.

      It sounds like you may have a Casascius coin on your hands, lucky you!

      They operate just like the paper wallets covered in the article, the private key is written on a piece of paper which is hidden behind the hologram within the coin. It is as simple as you say to spend them, you would remove the hologram to access the private key, load the key into your wallet of choice and spend away.

      However, I strongly recommend that you don’t do anything to open or damage the coin. Casascius coins are now out of production and effectively a piece of history. They trade for more than the face value of the coin, and once you open them, this damages the value of the coin. I actually think that they will continue to appreciate over time so if I were you I would hold on to it.

      If you really need the funds, you are better off selling the coin itself intact than damaging it and extracting the private key.

      Hope this helps!

  2. Hi Xexr

    Could you please explain more on public key and private key?
    Also is a Hardware wallet a special usb device?… or any usb device?…can copies be made (for back up)
    How would a paper wallet actually work?

    Thanks in advance!

    1. Hi Info,

      My article below goes into a bit more detail about public and private keys:

      In short, private keys are supposed to be kept secret, they give you access to your bitcoin by allowing you to sign transactions sending them to other addresses. Public keys can be thought of as your address on the blockchain, you can share them with others to allow them to send coins to you. Giving someone your public key allows them to see your balance and send you coins but does not allow them to send your coins to someone else.

      Hardware wallets are special devices, the two most popular are Ledger & Trezor. They store your private keys on “secure elements” within the device and allow you to sign transactions that your computer passes to them without ever actually sharing the private keys themselves. This is preferable as even if your computer is compromised with a virus, your private keys are not vulnerable.

      When you first set up a hardware wallet, you are given a special seed – a series of words which you should write down and save. Should you ever lose your hardware wallet (or its broken etc) you can easily recover access to your funds by loading the seed into another hardware wallet (or even supporting software).

      Paper wallets are in essence just a private key written down on a piece of paper. They are as simple as they sound 🙂

      Hope this helps,

  3. Thanks for the prompt replies….extremely helpful.
    I think I would prefer to have my own keys public and private, but do have concerns with the desktop apps/security.

    Would I be able to use Electrum to initially get/set up my public and private keys…then once I have them transfer them to encrypted usb/write them down on paper and then uninstall / delete Electrum from the PC.

    If I then at a later date wanted to sell the coins….I understand I would need to send them to my Bitstamp wallet first…how would I do this ?
    Would I need to re-install Electrum and do it through that? or would just my private key be needed on the Bitstamp site?

    For example, if I decided to stick with Electrum, then uninstall, then 5 years later ready to sell but they no longer exist/ so I would not have access to the app any more
    …how would I go about accessing my coins and selling them?

    Kind Regards

    1. No problem, happy to help.

      I would strongly advocate having control of your private keys if you have any significant amount. As the saying goes, if you don’t own your keys, you don’t own your coins.

      The process you describe would work fine. Broadly:
      1) Download electrum and create an electrum wallet (having first ensured your PC is secure).
      2) Export your private keys and write them down, and/or;
      3) Save several backup(s) of your wallet to encrypted USB sticks and separately write down your password
      4) Check that you can recover your wallet from your backups to ensure they are valid
      5) Send your coins from bitstamp to your electrum wallet
      6) Validate the transactions have confirmed on the blockchain (e.g. via blockchain.info)
      7) Delete electrum if you so desire, you can also check your coins are still present via blockchain.info
      8) Should you wish to sell your coins, reinstall electrum and restore your wallet
      9) Send your coins to your bitstamp wallet
      10) Exchange for fiat (e.g. EUR, USD, GBP)
      11) Withdraw your fiat to your back account

      Note that no exchanges allow you to import a private key as they need to have absolute control of the coins to allow their processes to function. Instead you need to send coins to/from them and will incur Bitcoin network fees whenever you do so.

      If you are paranoid (and given a lot of money I’d always recommend that you should be), you’d be best to use a linux live cd/usb to create your electrum wallet which is a much safer way of ensuring your computer hasn’t been compromised.

      Hope this helps,

      1. Great…thx again…more questions though please.

        What if at a future date when I’m ready to sell, electrum program is no longer available and I did not have a copy…or windows 15 did not support it?
        Would I be able to access my wallet in another way?
        This is what I was wondering regarding the paper wallet, ie how would load the funds from a paper wallet to Bitstamp wallet?

        Linux Cd sounds good!
        Also are there other sites that can verify the transactions (in case that one has down time)

        Thanks 🙂

        1. Oh I forgot to ask…once I decide on which wallet…can I put litcoin and ripple in the same wallet?

          Or is it 1 type of coin per wallet?


          1. Thought of another one …when a site or program generates a public key/wallet…how does it know that there isn’t already one that out there with the same key?


          2. Generally speaking, the answer is no in that each seperate cryptocurrency has its own wallet software.

            That said, there some emerging wallets which allow you to store multiple crypto’s such as Jaxx or Exodus, though they come with their own trade offs.

            Hardware wallets, especially the ledger nano s, are pretty good at supporting multiple coins, including the three you specify. See more details here:

          3. It doesn’t explicitly, rather its a case of the math involved meaning that there are so many possible addresses, the chance of a “collision” is infinitesimal (think number of atoms in the universe scale of numbers).

            If your wallet did happen to generate an address that already had coins on it, you would see them and therefore be altered to the fact that it’s best not to use that. But again, the chance of this happening is just insanely close to zero.

        2. If you export the private keys, then they can be imported into pretty much any reasonable Bitcoin wallet, so you don’t have to hope that electrum will be around in the future, just that the Bitcoin network is 🙂

          For example, you can import keys directly into the main Bitcoin Core wallet, see here:

          As to how would you get funds from a paper wallet into Bitstamp, it’s the same process. You would import the private key on the paper wallet into your wallet of choice and then use that to send a transaction to Bitstamp.

          Finally, as to your last question, all blockchain.info does is present the blockchain in an easy to navigate format. However, you can access the blockchain yourself directly should you ever wish to by downloading and running the main Bitcoin Core software. You could then search for any transaction / block / address that you desire on your own local machine. That said, there are main alternatives to blockchain.info, just google “Bitcoin blockchain explorer”.


          1. Crypto is already the most risky asset class you could choose to invest in. If you’re just starting out, I’d start with the established networks, Bitcoin & Ethereum. Only invest what you can afford to lose as losing it all is a very real possibility!

            Best of luck,

  4. Thanks again…what about the best exchanges (reliable and low fees) to buy with…would have gone with Bitstamp, but they still have not verified and its been almost week.

    Many Thanks.

  5. Once I set up different wallets for different coins…when I check the blockchain apart from the actual amounts, will it show what types of coins are in what wallet?

    1. Generally each coin has a different blockchain.

      Blockchain.info covers the Bitcoin blockchain so would show you what bitcoins are present on a given address.

      As an alternate example, Etherscan.io covers the Ethereum blockchain so can show you what ether are present on a given address.

      Some tokens use existing blockchains, many use Ethereum, so for example you can store Status tokens on an Ethereum address and see them via Etherscan.io.

  6. I read somewhere that if you have an electrum software wallet and want to send all coins to another wallet, you can’t?

    ie you have to leave a certain amount on there as a mining fee?

    Is this right…ifso how would we know what the mining fee is?
    If this is the case then what would other software mining fees be?


    1. To send a transaction on the Bitcoin network, you will need to pay a mining fee regardless of the software you use. Technically, you could choose to pay no fee, but no miners would process your transaction in the current climate and so it would never confirm on the Bitcoin network.

      Check out my article on Bitcoin fees:

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