What is a bitcoin mobile wallet?
A mobile wallet is an app on your phone that stores and moves your bitcoin. Mobile wallets can be downloaded through Google Play or the App Store and are completely free. It’s important to note that all your wallet details are stored locally using your phone’s memory rather than online, so having a secure password on both your phone and the wallet itself is essential. Mobile wallets allow you to access your bitcoins anywhere with your phone, making them a very convenient wallet option.
I. How do bitcoin mobile wallets work?
It’s simple. Once you install your bitcoin mobile wallet and set up your password/PIN, you can access your bitcoins and send/receive bitcoins through the app. Mobile wallets are designed to have easily usable interfaces to make this as simple as possible.
Other people can transfer you money by entering your public key (wallet address), and you can transfer bitcoins to other people by entering theirs. In addition to this, to make transactions easier, most mobile wallets integrate QR-Code technology, where you just scan the QR-Code of the receiver’s wallet address and send payments with no need to enter address manually.
II. So they’re like regular banking apps?
Yes, sort of. Bitcoin mobile wallets are similar to banking apps in that you can use them to view your bitcoin balance and transaction history, and send/receive funds. The difference is that a banking app merely gives you a way to access your bank account that is stored on the bank’s servers, whereas a bitcoin mobile wallet is stored on your phone. So they work like banking apps, but your account and your bitcoins are fully controlled by you rather than a third party.
III. What other types of wallets are there?
When it comes to bitcoin wallets there are a number of options from which to choose:
- Online wallets. Wallets that are hosted online. Also known as web wallets, these require you to sign up to an online service and access your wallet with an account name and password.
- Desktop wallets. Desktop wallets work through software that you download onto your computer. Once you have installed a wallet client you can use its interface to store and transfer coins, as well as check your balance.
- Hardware wallets. Regarded as the most secure wallets around, hardware wallets are electronic devices specifically designed for storing cryptocurrency. They allow you to store your coins completely offline.
- Paper wallets. Like hardware wallets, paper wallets allow you to store your coins offline. These DIY wallets are literally printed on paper after you have generated a wallet address and private key through an online service.
IV. How are mobile wallets different from online wallets with mobile apps?
The principal difference is where your wallet details are stored, and is very similar to the distinction between mobile wallets and online banking apps. Online wallets are like accounts for regular online services: all your information is stored remotely and accessed through a password-protected account. Any app they provide is just another way of accessing that account. Mobile wallets, on the other hand, are applications that you install on your mobile phone, and which store all of their data (such as the wallet’s private key) in your phone’s memory. When it comes to keeping your coins safe, mobile wallets are more secure than online wallets because you’re storing your wallet information offline. However, as your device is connected to the internet it’s still not as secure as a hardware wallet. Your phone could be infected by malware or targeted by hackers, so it is important to utilise all of a wallet’s security features.
V. What are the best mobile wallet providers?
There are more and more mobile wallet providers emerging as bitcoin becomes more and more widely used. Here are some of the best mobile wallets to have a look at:
- Mycelium. One of the very best mobile wallets out there, Mycelium has a host of excellent security features. The wallet allows you to hold both bitcoin and fiat currency, and to trade between the two within the app.
- BRD. Originally called Bread, BRD is a highly rated mobile bitcoin wallet available on both Android and iOS. The wallet can hold bitcoin and ethereum, and also BRD tokens, which can be used for rewards.
- Edge (formerly Airbitz). Edge is a very easy to use bitcoin wallet with a lot of long-term customers. They also focus on keeping up-to-date with all the latest developments in companies utilising blockchain technology – making Edge compatible with all blockchain apps by simply scanning a barcode.
- Abra. With Abra’s mobile wallet you can buy and store over 20 different cryptocurrencies on your phone. It’s quite like an exchange based on your phone to help you invest in a variety of coins on the go.
- Copay. Copay is available as both a mobile and a desktop wallet. It has great security features, and even allows you to store separate wallets within one app, much like you can have separate accounts within a banking app.
- Jaxx. Like Copay, Jaxx is also available as both a mobile and a desktop wallet. Jaxx was launched in 2014 by one of the co-founders of Ethereum and allows you to hold multiple coins and take advantage of exciting new ICOs (Initial Coin Offerings of new cryptos).
Important note: none of these can be used until you have completed your first bitcoin buy.
VI. Are mobile wallets free?
Yes, mobile wallets are free to download. There is a wide range of options available all offering great wallets at no cost.
VII. Are there additional fees for using bitcoin mobile wallets?
No, mobile wallets don’t have any extra fees charged by the provider. However, bitcoin wallets will charge transaction fees for sending bitcoin to another wallet. These fees are very low – typically around 0.2mBTC (an mBTC is worth a thousandth of a bitcoin, so this is under £2). These fees are used to pay the miners who verify the blockchain. Some wallets give you the option to pay higher or lower fees: higher fees will mean miners will consider your transaction as a priority and verify it sooner, whereas lower fees save you money but mean the transaction takes more time to be verified. However, in general transactions between wallets are almost instant.
VIII. Can I backup a mobile wallet?
Yes, mobile wallets will offer various ways of backing up depending on the provider. The best of these is noting down your ‘recovery seed’. This is a string of words (which can be generated or set by you) that can be used to access a wallet in a later date if you happen to lose your device or forgotten the details of your wallet. Once initiating a recovery on the same or a new device, you will be asked to enter your recovery seed and your bitcoins will be restored in your mobile wallet address.
IX. How to set up a bitcoin mobile wallet
Each individual bitcoin mobile wallet will have its own steps to set up, but generally this is what to expect:
- Choose the right bitcoin mobile wallet for you.
- Go to the Google Play or App Store and download the app.
- Open the app and you’ll usually have the two options: ‘Create new wallet’ and ‘recover wallet’.
- Click ‘create a new wallet’ and follow the steps. Usually, this will involve setting up a PIN or password, and revealing your recovery seed (you must write this down as it enables you to back up your wallet).
- Note: If you don’t get asked to set up a recovery seed, then find out how to set one up manually within the app or what other features your chosen walled has in order to create a backup.
- Once you’ve set all of this up, you’ll be able to use your wallet. Go to your details to find out the wallet address and transfer your bitcoins into your new mobile wallet.
X. What are the risks of using a bitcoin mobile wallet?
Mobile wallets are safer than online wallets as your details are stored on your device, however, as your mobile is connected to the internet there is still an element of risk from attacks. Your phone could be infected with a malware or virus with the purpose of collecting details of your private key. There’s also the danger of losing your phone, so it’s incredibly important to have your wallet password protected and note down your recovery seed so you can gain access to the wallet on a new device. Additionally, it’s also recommended to activate 2-Factor verification to ensure only you can be able to access the account.
This does not mean that mobile wallets are unsafe necessarily – many encrypt your private keys and store them locally. But all in all, with the few risks involved, it’s not recommended to store large amounts of bitcoin in a mobile wallet. If you have sizeable investments, then look into hardware wallets or paper wallets, which store your private key completely offline.
XI. And what are the advantages?
The most notable advantage is convenience. Being able to access your wallet on your phone like you would a regular banking app makes transferring and receiving bitcoin very easy. You can access your coins from anywhere, whether you want to make payments or send to your exchange for trading. Also, the fact that the private key is stored on your device rather than on the provider’s servers gives you full control of your bitcoins. However, this also means you have to take responsibility for its safety to ensure it’s not compromised.
XII. Should I use a mobile wallet?
It depends. If you’re not holding a substantial amount of bitcoin and want the most convenient way to access it, then yes. If you want to hold a large amount of bitcoin as a longer-term investment, you should consider other options such as hardware and paper wallets.
XIII. How do I find the best bitcoin mobile wallet?
Right here. We have reviews for the best bitcoin mobile wallets to help you select the right one for your needs.