Mycelium is the most popular Android wallet. It is very easy to use, both when sending and receiving payments, and it is also very simple to back-up your wallet. Mycelium is an HD (Hierarchical Deterministic) wallet which means it derives new Bitcoin addresses in a hierarchical and sequential manner, rather than, like most wallets, using a unique random number to generate an address each time. This makes it inherently more secure, as separate backups do not need to be created every time a transaction occurs. Mycelium also supports hardware wallets like TREZOR and Ledger, and offers cold-storage support (where Bitcoin is stored offline).
The Best Free Bitcoin Wallets
Before you use any type of digital currency you need a wallet. Without one you cannot receive, store or spend your coins. Just like an online bank account gives you access to the regular monetary system, a wallet is your personal interface to the network of your digital currency. A wallet contains your private key, the security code that allows you to access and spend your coins.
In essence a wallet is a website, app or device that manages and stores this private key for you, and interfaces with the blockchain so you can monitor your balance, send money and conduct other operations.
No physical exchange of coins takes place, when somebody sends you Bitcoin or any other digital currency. Instead what they are effectively doing is transferring ownership of the coins to your wallet's address on the blockchain. Provided the private key in your wallet matches the public address to which the currency is assigned, then the transfer will take place. The balance in your wallet will increase, and the seller's decrease, accordingly.
Types of Wallets
There are several distinct types of cryptocurrency wallets which provide different ways of storing and accessing your coins – Hardware; Software; and Paper.
A hardware wallet stores a user's private key on a hardware device like a USB. Before a transaction can be made, a hardware wallet must be physically connected to a computer, phone or mobile device. The key advantage of this type of wallet is the enhanced security that comes with storing private keys offline. This makes them safe from potential hackers and software theft. However, they are not free so may not be suitable for some users.
Software (desktop, online and mobile)
- Desktop wallets are downloaded and installed on a PC or a laptop. The wallet can only be accessed on the device in which it has been downloaded. Whilst a desktop wallet offers a high level of security, they can be vulnerable if the computer is hacked, or catches a virus, in which case all your funds might be lost.
- Online wallets run on the cloud and can be accessed from any computer or mobile device in any location. This makes them both very convenient, but also less secure as your private keys are stored online and controlled by a third party – the cloud provider. This makes them vulnerable to cyber-attacks.
- A Mobile wallet runs on an app on a smartphone, which means they can be used anywhere. However, the major problem is the size limitations of a mobile device, which means that they to be smaller and simpler than desktop wallets.
A paper wallet is an offline mechanism for storage of digital currency, and involves making a physical copy of your public and private keys. These physical wallets are considered one of the safest ways of storing keys, provided basic safety procedures are followed.
There are a wide number of free bitcoin wallets available. Here are some of the best:
Breadwallet began as the most popular wallet for IPhone, but is now available for Android devices as well. Breadwallet connects directly to the Bitcoin network, which means payments can be sent and received in seconds, Bitcoins can be stored easily and safely using built-in hardware encryption, whilst there is a simple recovery process in the event your device is lost or stolen.
Developed by Bitpay, Copay is a Bitcoin wallet available on iOS, Android, Windows and Linux. Because it is available on so many platforms, Copay allows you to use the same wallet across multiple devices. This is a good option for new Bitcoin users because of its simple and clean customer interface, whilst business users will like its shared account feature, which operates like a multi-signature authorisation process on a conventional bank transfer or cheque payment.
Electrum is a popular desktop wallet because it is both fast and easy to use. It also allows, provided that you have a spare computer that can be used offline, for the cold-storage of Bitcoin. Additional features include connection though the Tor anonymous communication network, multisiganture wallets (where more than one key is required to approve a Bitcoin transaction), and integration with hardware wallets.
This is the official Bitcoin wallet, although, due to its slow speed and relative lack of features, it is not widely used. However, it is a “full node” which means, essentially, that it helps transmit and verify other Bitcoin transactions across the network and stores a copy of the entire blockchain, rather than rely on external servers or other peers on the network to do this.
A wallet is the digital equivalent of a bank account, and an essential requirement if you are going to start sending or receiving payment in Bitcoin. There are a number of types of wallet available – hardware, software or paper – but, whilst hardware wallets are the most secure, they are not free. Despite this, if you are going to start trading or storing Bitcoin in an substantial quantity, you may want to consider investing in such a wallet.
However, for those with limited funds or who will only be making the occasional transaction in Bitcoin, there are free software (and paper) wallets available, the best of which have been highlighted above.
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