Bitcoin (BTC) was once one of the hottest assets of all time. What cost 6 cents in 2010 peaked above $19,650 in 2017. By early 2019, things were far less glamorous for the cryptocurrency; prices were down below $3,600, off over 80 percent in under 14 months. If you own the cryptocurrency, or are even considering buying into BTC, you'll want to find the best bitcoin wallet you can.
And wallets are where the currency lives.
So with blockchain technology here to stay, what's the best bitcoin wallet for 2019 and beyond? With an emphasis on security, here are the top five crypto wallets and wallet types.
-- Paper wallet or other cold storage
-- Ledger or Trezor (hardware BTC wallets/dongles)
-- Electrum (software wallet)
-- Blockchain (online wallet)
-- Coinbase (online exchange)
1. Paper Wallet or Other Cold Storage
A paper wallet is simply a document that contains all the information that you need to generate the bitcoin private keys you need. It often takes the form of a piece of paper with a QR code that can be scanned into a software wallet when you so desire. By storing your bitcoin offline, trusting nothing and no one but yourself, and if you have all the information you need to control and access your bitcoin, you're using the strongest "cold storage" method out there.
"I recommend using a paper wallet so you have a physical backup of the private key," says Ryan Spanier, director of research at Kudelski Security. "Be sure to generate it using a clean system, such as a Linux live CD. Store this in a safe place, such as a safe or safety deposit box."
The incremental complexity and technological know-how needed for this method are both downsides to the paper wallet approach. Cold storage solutions and hardware wallets are less nimble than other options, too; if the price of bitcoin were crashing, for example, you might find yourself slower to the draw than if you merely kept your BTC on a site like Coinbase.
Sure, paper wallets may elicit images of a tin foil hat-wearing paranoid, but the truth is the paper wallet is the best bitcoin wallet for 2019 and beyond because it's the safest, and in the crypto space the value of safety is -- or at least should be -- placed at a premium.
2. Ledger or Trezor (Hardware BTC Wallets/Dongles)
When you start thinking about using hardware storage solutions for your cryptocurrency, you know you've gotten serious. These dongles both make the best bitcoin wallet list because of safety and mobility. Plus it's good enough for professional investors.
"We have a little bit of experience in this area and prefer using Trezor and Ledger Nano S," says Peter Keenan, director of investments at Hehmeyer Trading & Investments, headquartered in Chicago.
"Both wallets are cold storage wallets, which we highly recommend. Cold storage eliminates counterparty risk and greatly reduces cybersecurity risk," Keenan says. "Counterparty risk refers to the risk of losing your bitcoin to the exchange where you bought your bitcoin due to nefarious acts like hacking -- Mt. Gox as an example."
In 2014, Mt. Gox was the Coinbase of the world, being the go-to exchange for excited new cryptocurrency investors. That changed in February of that year, when about 850,000 bitcoin vanished from its coffers -- a haul that works out to about $16.7 billion at bitcoin's peak prices.
In 2016, another hack took the Bitfinex exchange platform for 120,000 bitcoin, a $75 million score that would be worth more than $2.3 billion by BTC's all-time high in December 2017 .
The downside of these dongles as solutions? It's not free, like other wallets on this list. Trezor's base model costs 69 euros, while the Ledger Nano S costs 59 euros.
3. Electrum (Software Wallet)
Electrum is a popular, free storage option in the bitcoin community, and is one of the most, if not the most, well-respected of the desktop storage apps out there. It's been around since 2011 and is also available for mobile, though Apple (ticker: AAPL) iPhone users are out of luck -- to date it's only supported by Android.
Electrum gets high marks for its ease of use and user interface, which is always nice, but the real reason it's the best bitcoin wallet for desktop is its safety and reliability. Like any desktop wallet worth its salt, users get to control their private key; Electrum doesn't know what it is. Since your private key, a long string of letters and numbers, gives you access to your bitcoin, you need to keep that, you know, private.
Many online wallets and online exchanges don't give you ultimate control of your private key, adding an extra layer of risk. You have to both trust the counterparty is a good actor and hope its servers don't get hacked, as that could compromise the service or your information.
Electrum also boasts two-factor authentication, and supports hardware wallets and cold storage -- techniques that are further detailed below.
4. Blockchain (online wallet)
Exchanges are ripe pickings for ambitious hackers. A web-based wallet can pose some security and hacking risks too, but it doesn't have quite the glaring target on their backs that exchanges do. Nor does it have the nightmares of Mt. Gox and Bitfinex hanging over them.
Claiming to be "the most trusted and fastest growing crypto company," Blockchain -- which can be found at the easy-to-remember URL blockchain.com -- boasts more than 32 million wallets and has supported more than 100 million transactions. Security is a top priority, and with many longtime cryptocurrency enthusiasts comfortably keeping their spoils there for years, even as Mt. Gox and Bitfinex were breached, it would have to be.
For the extremely technologically impaired in society, web-based wallets are just an additional step of complexity -- but that's the trade-off you get for additional security.
5. Coinbase (Online Exchange)
Online exchanges are, by and large, less secure than the methods described here. But Coinbase seems to have learned from the lessons of its predecessors, and is one of the biggest bitcoin exchanges in the world. It's also user-friendly; not only can you buy, sell, exchange and trade bitcoin on Coinbase, but you can store your bitcoin in a wallet there, too.
The site also supports Ethereum, Bitcoin Cash and Litecoin.
But the risks of storing bitcoin -- and any other cryptocurrency, for that matter -- on the same site where you buy it are steep, and there's a poor track record for sites serving as both a bitcoin wallet and exchange.
"There have been many incidents of those types of service providers collapsing in the middle of the night and people losing serious amounts of money. Mt. Gox being a great example there," says Andrew Ittleman, founder and partner of Fuerst Ittleman David & Joseph, a law firm in Miami.
Despite the tainted history of its predecessors, Coinbase's ease of use, a more secure storage option called Vault, and two-factor authentication make Coinbase the best bitcoin wallet provider among the exchanges, and certainly one of the best cryptocurrency wallets for beginners.