US News & World Report: What's the Best Bitcoin Wallet?
#5 Coinbase, #4 Blockchain.info, #3 Electrum, #2 Leger or Trezor, #1 Paper wallet.
I'm pretty much in agreement, but currently I think I prefer the Electrum software wallet in cold storage mode over the Trezor or Ledger, mostly because I just recently started playing with hardware wallets and feel like I can understand and better control how my keys are being stored and accessed with Electrum.
Electrum really does a lot of things very well, and it works on Windows, macOS, Linux, and Android, and can be used with a hardware wallet, as well. I've used it on several Macs, as well as in the Tails Linux distribution (I personally wouldn't trust Windows with significant amounts of bitcoin). It provides the ability to generate and store wallet keys on an airgapped computer that you never allow online ever again and export a master public key to a second online computer to generate a watch-only wallet. This second computer will interface with the network for transactions, but when you need to send a bitcoin transaction that requires a signature with the private keys it will save an unsigned copy of the transaction to a file that can be opened by the airgapped computer, which signs and save the transaction file to be transferred back to the online machine for broadcasting to the network. It sounds complicated but Electrum makes it easy to do. A couple youtube vids and you're good to go.
The other nice thing about having an airgapped computer is the fact that it makes the perfect platform for generating secure paper wallets using the bitaddress.org webpage, too. Get an old basic printer that doesn't have any wireless connectivity to print out the paper wallet address and keys and you're good to go.
Remember, whatever method you choose, you must start slow and experiment with small amounts before committing significant amounts of coin. Make sure you can reliably perform all the steps necessary to get your coins back out of the wallet after you've put them in there. And practice the steps a few times over a few days so it really sinks in. Otherwise, you might wind up outsmarting yourself in the process of trying to keep your coins safe. It's like burying gold out in the back forty, you need to take some steps to make sure you can find it again when you really need it.
Going on two years, it's probably worth revisiting the wallet issue, especially at the pace that this technology improves at.
First off, paper wallets are a no go for me at this point, mostly because they take too much diligence in terms of preventing leaks of information in the process of creating the private key on an air-gapped computer. It's hard, it's expensive, and it's complicated. If you want to go balls to the wall on this concept you need to go with
Glacier Protocol. I've researched it, and I don't have the confidence in my ability to pull it off successfully. This adds several extra layers to the precautions I took in 2017 and I don't have it in me to go down that route anymore.
As far as blockchain.info (now blockchain.com), despite the fact that it served me well for many years in the early days, I just can't recommend a web based wallet these days. Apparently they recently introduced a variant of the Ledger Nano S that can be linked to their online wallet, which undoubtedly increases the security, but it's a proprietary implementation that locks you in to that wallet. I'm less and less comfortable with being locked into a proprietary wallet solution.
Coinbase, believe it or not, I still use regularly and am very happy with. I've been selling on a regular basis for the last two years and 95% of those sells have been processed by Coinbase. Their Vault solution works well and basically freezes any bitcoin that you deposit into it for at least 2 days before you can spend it. It takes confirmations from two different email accounts and a wait of 48 hours to move it from the vault to the wallet before it can be spent. Coinbase insures the dollar and BTC amount, so for checking account sized balances I have no hesitation recommending Coinbase's Vault solution for storage. Also, I have no complaints with bank transfers following the BTC sales on their site.
Ledger and Trezor, or most any hardware wallet, are extremely good options. I have used the Ledger Nano S, Ledger Blue, Trezor One, Trezor Model T, as well as the KeepKey, and all of them work. At its essence, a hardware wallet is a minimalist computer that is able to generate a random private key for signing transactions without leaking information when it's connected to a smarter online device like a computer, tablet, or smartphone. A hardware wallet is a much simpler way to generate secure keys for cold storage than an air-gapped computer. There really is no better sweet spot in terms of security and ease of use. However, it's certainly not perfect, yet. I think every single one of these hardware wallets has experienced publicized vulnerabilities and they all require that you securely store the 12 to 24 word seed phrase so the wallet can be regenerated in case of loss or failure. And seed storage is no trivial issue. Just look at the cottage industry in physical metal plates that will secure a seed phrase from being destroyed in a house fire. However that seed phrase introduces another risk factor, because anyone who gains access to those words now can spend all the coins in that wallet.
That brings us to Electrum, which continues to impress me as time marches on in this space. This free software runs on Windows, Mac, Linux, and Android, and I've used them successfully on each of those operating systems. This wallet solution provides the best combination of ease of use and control over BTC transactions. It can be set up to operate in cold-storage mode, where an air-gapped machine generates keys, stores them indefinitely and then signs transactions offline for broadcast to the blockchain on an online computer that doesn't store the private keys. It's much easier that it sounds, and it works. In my experience, I've had the air-gapped machine go down and was able to rebuild the wallet offline on a new computer with the seed words. The system works. Plus you can set the fees and monitor the transaction progress like no other wallet I've used. Electrum is a wallet worth learning about for anyone in this space. It's not fancy looking, but it works, and it works very well.
Currently, in by opinion, the best wallet system combines the strengths of the hardware wallets with Electrum. Set up an Electrum wallet with a hardware device, like the Trezor, holding the private keys and you've got a very powerful and secure system. The Electrum file on your computer contains no private keys so the concerns about that computer being online are greatly minimized. Should the computer with the Electrum wallet go down or get stolen, if you still have the Trezor you haven't lost your funds and can access them easily on Trezor's wallet application. If you lose both Electrum and the Trezor you can rebuild the wallet from the seed phrase. If you want to go even better, generate a multisignature wallet scheme on Electrum that utilizes 2 out of 3 hardware wallets for signing transactions. Or go big and do a 10 of 15 multisig scenario. Electrum will do that. It's incredibly versatile, I recommend everyone try it.
For no skin in the game, try Electrum for free on the bitcoin testnet:
https://electrum.org/#downloadStart up in testnet mode:
https://bitzuma.com/posts/a-beginners-guide-to-the-electrum-bitcoin-wallet/#testnet-modeGet some free testnet BTC:
https://coinfaucet.eu/en/btc-testnet/And experiment without any fear of losing real BTC that could be worth thousands in the coming years.
The scariest thing about crypto is the responsibility that comes with generating, storing, and signing transactions with private keys. Learning how that process works and developing the necessary comfort level is absolutely critical if you're interested in acquiring and hodling cryptocurrency.