Use this straightforward guide to discover which is the best private crypto wallet on the market, how they work and how you can send bitcoin anonymously.
WHAT IS A CRYPTOCURRENCY WALLET?
Before we dive deeper, let’s think about how you store cash in the real world. You don’t just hold it in your bare hands, right? Instead, you probably store yours in a wallet, or even more likely, a bank.
Either way, a good cryptocurrency wallet follows the same core principles; keeping your money safe, secure and out of public view. So that’s it in a nutshell, let’s find out how crypto wallets work.
In order to use or make an exchange for any of the cryptocurrencies, you will need to use a cryptocurrency wallet.
Cryptocurrency itself is not “contained” in an actual wallet. Instead, a private key (a secure code known to you and your wallet) is stored that shows ownership of a public key (a digital code connected to a specific amount of currency).
So all in all, your wallet contains your private and public keys and allows you to receive, send and exchange crypto coins or tokens. Some wallets only serve one dedicated cryptocurrency, but there are also wallets that can store many different ones.
2. Are crypto wallets secure?
Wallets vary in terms of how secure they are and their level of security depends on the type of wallet, be they desktop, mobile, online, paper or hardware, and the associated service provider.
Generally speaking, web-based wallets are actually considered riskier than their offline equivalents. Online wallets can expose users to possible vulnerabilities in the wallet platform, which can be exploited by hackers who can steal your assets. In contrast, offline wallets cannot be hacked because they simply aren’t connected to an online network and don’t rely on a third party.
The best of both worlds would be a private crypto wallet, as they allow the user to store their bitcoin in a safe place but is more convenient than a cold-storage wallet.
3. Why do I need the best private crypto wallet?
It was commonly thought that digital wallets were safe havens from criminals and terrorists because they were untraceable and completely anonymous. However, as blockchain technology was ushered into the mainstream, it became apparent that Bitcoin’s massive public ledger was actually a gold mine of information.
Each Bitcoin transaction is permanently and publicly recorded on the Bitcoin blockchain. As a result, anyone can view all of the transactions made on the ledger, so simple analytical tools can paint a picture of where bitcoins are going and the balances associated with different wallets.
Many people are still not aware of the importance of storing cryptocurrencies safely and only focus on finding the most convenient way of trading on an exchange. This is really dangerous and jeopardizes the safety of your digital assets.
Private wallets have two real benefits when it comes to that can securely storing cryptocurrencies online. Firstly, all transactions and balances are untraceable and secondly, users have the right to their own crypto wallet private key. These benefits make private wallets simply safer than normal ones.
4. How does the best private crypto wallet work?
When a person sends you bitcoins or any other type of digital currency, basically, they are signing off ownership of the coins to your wallet’s address.
In order to spend those coins and unlock the assets, the private key stored in your wallet must match the public address to which the currency is assigned.
If the public and private keys match, the balance in the buyers’ digital wallet will increase and the senders will decrease accordingly.
In fact, there is no actual exchange of real coins. The transaction is shown merely by an entry on the blockchain and a change in balance in your cryptocurrency wallet.
There are several types of wallets that provide different ways to store and access your digital currency. It depends on your specific uses and what level of privacy you want. In the next paragraph, we’ll check out the best private crypto wallet that are available and used by many people.
DIFFERENT TYPES OF PRIVATE CRYPTO WALLET ON THE MARKET TODAY
There are a lot of different wallets available out there in the Bitcoin world. To make it easier for you to understand, we have categorized them based on certain criteria such as online connectivity, custodianship, and device availability.
Wallets can be divided into three distinct categories – software, hardware, and paper. Firstly, software wallets can be on your desktop, mobile or online, but what are their main features?
- Desktop: Desktop wallets offer one of the highest levels of security. However, if your computer is hacked or infected with a virus, the chance of you losing all your money is very high. Desktop wallets are wallets stored on your laptop or PC and different versions that you can refer to include Windows, Mac and Linux. Two of the best desktop wallets are Exodus and Electrum.
- Online: Some consider online wallets the safest ones because they are owned by third parties who store and hold your private keys. One of the standout features of online wallets is that you can access them from anywhere and from any device via the internet. Online wallets are used for regular transfers and active transactions and are available for both Chrome and Firefox.
- Mobile: Mobile wallets are one of the most convenient wallets for fast and easy transactions and are smaller and simpler than desktop wallets. These wallets run on an application on your phone and are very useful because they can be used in many places, including retail stores. Most mobile wallets usually have a desktop application attached, so the same security rules apply here. There are two main versions: Android and iOS.
- Hardware: These wallets store their user’s private keys on a hardware device which is usually accessible via USB. Although hardware wallets make transactions online, they are stored offline which delivers increased security. Hardware wallets can be compatible with several web interfaces and can support different currencies; it just depends on which one you decide to use. Moreover, making a transaction is really easy. Users simply plug in their device to any internet-enabled computer or device, enter a pin, send the currency and then confirm. Hardware wallets make it possible to easily transact while also keeping your money offline and away from danger.
THE LATEST AND BEST PRIVATE CRYPTO WALLET TO COMPARE IN 2020
1. Trezor – the easiest for beginners
Trezor is a hardware altcoins wallet which operates on a “Zero Trust Approach” and also eradicates the need to trust a third party. Currently, it is one of the best multiple cryptocurrency wallets available, as per cryptocurrency wallet reviews.
A great feature of Trezor is that it provides a recovery seed if your wallet is lost, and it is protected by a password or a PIN. Its interface is considered great for beginners because it’s so user-friendly. Moreover, it limits its communication with other devices and when the USB device isn’t connected, it’s turned off. All in all, the fact that it’s hack and theft proof pushes it right to the top crypto wallets list.
2. Incognito – the best private crypto wallet on the market
If you are looking for a crypto wallet that allows you to send Bitcoin without anyone knowing, this one is definitely the best private crypto wallet for hiding your identity.
Despite what is commonly thought, Bitcoin is not entirely anonymous and we have long known that Bitcoin is built on a public Blockchain platform. Each user has a public address that theoretically could be traced back to an IP address or an exchange account (and by proxy, an actual identity) through proper network analysis. In turn, this helps criminals to steal people’s digital assets.
The good news is that there is a solution to the problem. Incognito came out with a wallet that provides greater privacy, as it allows its users to send bitcoin anonymously without losing the transparency of Blockchain.
With Incognito other people can’t see your transaction history and therefore how much you have of various cryptocurrencies. The only person who knows either of those things, is you. Incognito has gone a long way to resolve the security concern brought by public blockchains.
Transactions on Incognito are absolutely confidential because they are conducted in a private mode where others cannot see the amount, sender or receiver. This is achieved through a high-performing zero-knowledge proof system on the client side, which turns all your coins into privacy coins, allowing you to store, buy and send bitcoin anonymously.
What’s more, users can run a node and earn block rewards or issue their own privacy coin just with a couple of taps. If you are looking for a fast, secure and easy experience, Incognito is a great choice; it offers best-in-class privacy for a crypto wallet with a private key.
It’s available on iOS, Android and as an extension on Chrome. If you’re interested, you can download it here:
3. Guarda – the first multi-cryptocurrency wallet
Guarda supports the most popular crypto coins and tokens including BTC, ETH, Zcash, Ripple, DASH, latest EOS, and many other altcoins.
It is known to be safe and reliable and can be easily accessed from any device, which is why it is regarded as the best private crypto wallet for all coins.
Unlike many other wallets, Guarda doesn’t store any wallet data, client information or private keys. It is stored in the device’s safe memory and deletes itself if you log out from the wallet.
Guarda enables you to smoothly shift your assets from one coin to another without registration, limits or complex verification procedures. However, in terms of security, it is at risk from hackers and scammers online and as it’s a desktop version, it could be breached by viruses.
4. Paper wallet – your key – your bitcoin
Paper Wallets are simply pieces of paper that contain your private keys. The associated software application normally generates the keys, which are then printed off and physically stored.
Most paper wallets usually come with an embedded QR code that can be signed and scanned to conduct transactions on the blockchain.
Paper wallets are categorized as cold wallets because the keys are stored offline. A great choice here is Verge, as this paper wallet is considered one of the most secure and best private crypto wallet in 2020.
5. Electrum wallet – fast, secure and easy to use
Electrum was initially known for supporting Bitcoin, but it made some adjustments, diversified and now supports altcoins and is compatible with the Verge blockchain. Electrum is a lightweight and easy-to-use cryptocurrency soft wallet that can store your cryptocurrency holdings securely.
It uses the Simple Payment Verification(SPV) method, which can verify a transaction in five seconds. It is also good for new users to navigate, as it has an intuitive interface, and another great feature is that you don’t have to download the entire Blockchain. Electrum uses 2 separate levels of encryption to protect your assets.
THE IMPORTANCE OF THE RIGHT TO MAINTAIN USER PRIVACY
We are just beginning to get a glimpse of the information that can be mined from the open transaction ledger at the heart of Bitcoin. Bitcoin is becoming increasingly known and widely used by criminals looking to steal digital assets or simply launder money. They are constantly developing new sophisticated methods of extracting identity information and tracking payments on public blockchains.
As we’ve seen, user privacy goes hand in hand with security. While most people are completely comfortable entrusting banks with financial information, opening up their transactional history and balances for everyone on the blockchain to see is a bridge too far. Bitcoin users need to conceal their activity for privacy purposes and this right needs to be protected.
Choosing the right crypto wallet is one of the first things you must consider when entering the cryptocurrency world. Finding the best private crypto wallet for sending Bitcoin anonymously is the safest way to store your Bitcoin.
Keep up-to-date with the latest information on private crypto wallets and you’ll soon figure out which one is most suitable for you.