When you start using bitcoin, or other blockchain based digital currencies, the first thing you require is a wallet on which to store your valuable coins. No wallet, no coins. But how do you know which one to pick?
Following discussions the other day where we couldn't come to agreement over which wallet was best, I realised, there's so many options that for a new comer it might be very confusing. Each one has its upsides that set it apart, so I realised, a complete new comer could easily be overwhelmed.
I will add, there is definite bias to the choices I'm going to present here. I've used multiple different wallets, I currently have around 20 different wallets, with various amounts of bitcoin on each and in keeping with the decentralised nature of bitcoin I think it's probably better this way. I've got wallets on 3 different mobile phones, my tablet, my laptop and my desktop PC and, my prized possesion, my BitStashers cold storage wallets.. Each serves a function and the chances of me losing all my bitcoin is next to nil. That's something for a new comer to consider, though to start with obviously you'll only want one.
If you are looking for a wallet you can use on your desktop PC my personal preference is a Multibit HD wallet. It's simple, intuitive, and easy to create back ups for (always always back up your wallets). When you create a multibit HD wallet you'll be shown a series of words which you must record and keep safe. Should the worst happen and your computer blows up, recovering your coins is as simple as redownloading the program and, when prompted, entering the twelve words you've got stored safely away.
Another great choice is Blockchain.info. They do a hell of a lot for the bitcoin eco system and their wallet can also be stored in a 12 word mnemonic. Once that's done you can use it as you wish, they don't hold your keys (the most important feature of any wallet) and you can integrate the wallet with their mobile app. Now, this process is a bit tiresome and tedious, I'l admit, and their mobile app isn't as tidy and intuitive as some others, but it does come with a couple of nice features, notably access to real time price and chart information (for those that want that info at the click of a button) and more importantly a frequently updated merchant map of places that accept bitcoin.
If you are looking for a mobile wallet the choices get a little tricky. If there was one wallet which combined all the best features I'd recommend it, but there isn't, yet. The blockchain.info one mentioned above has it's features that help it stand out, and so do those listed below.
My first choice is Mycelium. You can use it in the same way as Multibit HD, you create back ups in the same way (12 words, recorded and kept safe from prying eyes) and it supports the Trezor hardware wallet (I won't write about that now, but if you've got involved long enough to know what Trezor is then you don't need me to tell you the advantages) and can also be used to import paper wallets and, my absolute favourite, the Bitstashers wallet. It's interface is intuitive, and you can enter ammounts for sending or receiving in your local currency, which will be automatically converted by the software to the appropriate ammount in bitcoin. The best thing is, you can download it and get using it in less than a minute. No hassle, no sign ups, no nonsense, just download and away you go.
My second choice is CoinCorner. They have created a simple, clean elegant wallet which is intuitive and pleasant to use. You must create an account at CoinCorner and use your web integrated wallet through the app. They also provide great customer and merchant support and while that's not the prime focus of this blog post I can't stress enough that if you want to accept bitcoin in your shop or on your website, these guys are well worth checking out.
My third choice is a recent adition to my collection. Blocktrail created a wallet which in most ways isn't any greater or worse than any others, but it does have one distinct advantage for the less technically minded bitcoin user. Normally to get an address to send to you must scan a QR code or copy and paste the address, which can be pretty intimidating for the less confident. However, with these guys you can simply select someone from the contacts on your phone and send it without scanning QR codes or copy and pasting address's. How brilliant is that!
So what about cold storage? What the hell is cold storage? In a word, it's a method of storing bitcoin on a non internet connected device or, more commonly, on paper.
A paper wallet is easy to create ( paperwallet.portsmouthcrypto.co.uk is an ideal place to learn how) and can be printed out to store your bitcoins anywhere you know is safe. Because they're not internet connected no one can get to them unless they have the all important "private key" half of your wallet. For increased security that private key can be encrypted with a password of your choice. It is recommended that when creating a paper wallet you disconnect your machine from the internet and clear your cookies after you've finished.
The advantage of creating an encrypted paper wallet is that you can then send that information of to my friends at BitStashers and they can create one of the finest cold storage solutions available, with a custom design. Because your private key is encrypted, they will never be able to access your coins either.
Recovering your coins to spend from either cold storage solution is quick and simple. Download the Mycelium wallet to your mobile, go to import private key, scan, enter password, and there it is, your money ready to spend. You spend what you want, delete the wallet from your phone and your coins are safe again.
Then we move on to something else entirely. Coloured coins. I won't go in to too much detail except to say that coloured coins are bits of bitcoin with extra data added which helps them be distinguished from any other bitcoin. The reasoning for that I won't delve into now as that's for another blog, but there's two choices available.
Number one is for desktops users, and is my favourite. Get Hashing created their wallet which can be found at cloud.gethashing.com and it's, to say the very least, something very special. They do not have control of your coins, they can never see the content of your wallet, they can not control your wallet. However, security is, as in many examples here, entirely down to you. There is a built in smart asset (coloured coin) exchange, which means you can buy and sell smart assets without ever giving someone else control of your money. This isn't the time or place for technical details, so I'll just say this is one of my favourite wallet solutions.
The second coloured coin option is coinprism. Now, I don't recommend them for desktop use, unless you intend to create smart assets, but for mobile, smart assets or no, they are clean simple and easy to use. As with the other HD wallets, your key can be backed up in the form of a 12 word mnemonic which you MUST keep safe.
So, a summary. Perhaps that's a good idea now you're utterly confused and overwhelmed.
For desktop use, Multibit HD, or cloud.gethashing.com if you want smart assets.
For mobile, Mycelium. You'll be up and running in seconds.
For cold storage, BitStashers.
I'm in the process of creating a step by step guide to using some of these wallets and in the coming weeks I'll release them as they're finished.
I should add, for the sake of vanity, and right at the end so that you remember it, that https://wallet.portsmouthcrypto.co.uk is also a good tool for simple use on mobile or desktop, though it's undergoing a lot of work. Like the best of the rest, there is no way anyone can get to your coins, your private keys are stored on your machine and it's quick and easy to create back ups.
Let me know what you think of this blog below. If there is a particular wallet type you want to see a guide for first let me know. My priority is a paper wallet guide and then a Get Hashing Cloud Wallet guide, but if there's anything you really really want first, leave me a message.
Credit for the cover picture in this Blog post must of course be given to the great people at Team Locals on Twitter, check them out!