Best Bitcoin wallet client

What are Wallets?

Your money is stored in a wallet. It is a long string of code, (an address) that has a corresponding password (a key).

How they work

The address is like your email address, you can hand it out and people can send you bitcoins. You’re coins are associated with your wallet address, held in a peer to peer network maintained by miners (the heart of the network mentioned above).

Your key is like the password to your email, it is another long code that looks a lot like a wallet. When you put your address and key into a client you’re able to authorize transactions from your wallet (ie send money). This key needs to be kept safe and out of the hands of hackers, phishing software and robbers in general.

Types of wallets

There are different ways to manage your wallet.

Online wallet

You can hold your address and your key in a client such as an app or a website. This means you only need your password to the client. Often they generate a wallet for you, and sometimes don’t even give you a key at all. These are easy to use but clients can get hacked and giving your key to a third party involves risk.

Coinjar offers a hosted wallet, where you are given an address, and can send receive bitcoins from it. However you aren’t given a “key” and must use the CoinJar interface. It makes a great ‘hot wallet’ for every day purchases, but isn’t recommended for storing large amounts of value.

All third party wallets involve trust. To be your own bank an offline wallet is the best way to go.

Software Wallet

You can use a device with a software client that generates keys and wallets, and manage your funds on it like a bank account. To be extra safe you can keep it offline. No hackers can access a computer that isn’t online so this is pretty safe.

Check out Armory, Bitcoin-QT, or Electrum as ways to generate and host a wallet. All these can be run on an online or offline computer, but remember if you’re computer is compromised so is your wallet.