On this page
This page describes how things work. It does not tell you whether to buy bitcoin, how much, or which product to use, and nothing here is financial, tax or legal advice. Companies are named as examples so you can recognise them, with links only to their official sites. None has paid to be listed and none is recommended.
Three ways to hold bitcoin
Every way of owning bitcoin sits somewhere on a line between convenience and control. At one end, someone else looks after everything and you hold a claim. At the other, you hold the keys and nobody can help you if you slip.
A spot ETF
Shares in a fund that holds bitcoin, bought through an ordinary brokerage or retirement account. No keys, no wallet. You pay an annual fee, can trade only in market hours, and can never withdraw or spend the bitcoin itself. Full ETF guide.
An exchange or app
You buy real bitcoin and the company holds it for you. You can sell at any hour, and, importantly, withdraw to your own wallet whenever you choose. Until you do, you are trusting the company’s security and solvency.
Your own wallet
You hold the keys. Nobody can freeze the coins, lend them out or lose them for you. You are also the security department, the backup department and the helpdesk.
Plenty of people combine them: buy on an exchange, move long-term holdings to their own wallet, and perhaps hold an ETF inside a pension. A side-by-side table of ETF versus self-custody is on the ETF page.
Where people buy
In the early years buying bitcoin meant wiring money to a stranger’s website in Tokyo. Today the main routes in the United States are regulated and dull, which is progress.
| Type | What it is | Examples (official sites) |
|---|---|---|
| Full crypto exchanges | Trade bitcoin and many other tokens, with order books and advanced tools. Usually the lowest fees if you use the “pro” trading screen rather than the simple buy button. | Coinbase, Kraken, Gemini |
| Bitcoin-only services | Sell bitcoin and nothing else, often with automatic recurring purchases and easy withdrawal to your own wallet. | River, Strike |
| Payment and broker apps | General finance apps that added bitcoin. Simple, though some restrict or charge for withdrawals. Check before you buy. | Cash App |
| Brokerage accounts | Spot ETFs, bought like any share. | See the fund table |
| Peer to peer | Buying directly from another person, sometimes without identity checks. More private, more effort, more ways to be cheated. |
What to compare
- The real cost. A “zero fee” purchase usually hides its charge in the spread, the gap between the price you pay and the market price. Compare the amount of bitcoin you actually receive for the same dollars.
- Withdrawals. Can you send your bitcoin to your own wallet? What does it cost? A platform that will not let you withdraw is selling you a price bet, not bitcoin.
- Regulation and track record. Is the company licensed where you live? How long has it operated? Has it been hacked, and what happened to customers?
- Proof of reserves. Some exchanges publish cryptographic evidence that they hold customers’ coins in full. It is not a full audit, but it is better than a promise.
- Identity checks. Regulated platforms must verify who you are and report to tax authorities. That is normal.
Many buyers use dollar-cost averaging: a fixed amount at regular intervals, which avoids the stress of trying to time a volatile market. The DCA illustrator shows how that would have played out over the past year, using real prices.
Wallets
A wallet does not contain bitcoin. The bitcoin is on the blockchain. A wallet holds the keys that can move it, and helps you build and sign transactions. Wallets differ mainly in where the keys live.
Use the filter to explore the main types. These are well-known examples as of October 2026, described neutrally; new products appear and old ones change, so check the maker’s site.
Trezor
The original hardware wallet, first shipped in 2014 by SatoshiLabs in Prague. Open-source firmware. Newer models add a secure element; all support an optional passphrase.
Ledger
French maker of the best-selling devices, built around a secure-element chip. Supports thousands of assets. Parts of the firmware are closed, and a 2020 breach of its customer database is a standing lesson in ordering hardware discreetly.
Coldcard
Bitcoin-only device from the Canadian firm Coinkite, aimed at careful users. Designed to work fully air-gapped, signing via microSD card, QR code or NFC rather than a cable.
Bitkey
Made by Block. A two-of-three multisig split between your phone, a small hardware device and a server key, with no seed phrase to write down. Simpler for beginners; relies partly on Block’s recovery service.
Blockstream Jade
Low-cost, fully open-source device that can run air-gapped using its camera and QR codes. Uses a “blind oracle” design in place of a secure element.
Passport
Open-source hardware from the US company Foundation, paired with its Envoy app. The current model is the Passport Prime; earlier Passports were bitcoin-only, air-gapped devices that signed by QR code.
BitBox02
Swiss-made, open-source device from Shift Crypto with a bitcoin-only edition and a simple microSD backup option. The newer BitBox02 Nova sits alongside it.
Sparrow
Desktop wallet favoured by people who want to see everything: individual coins, fees, labels. Works with most hardware wallets, multisig and your own node.
Electrum
Lightweight desktop wallet in continuous development since 2011. Fast, scriptable and widely supported. Download only from the official site; fake copies are a classic scam.
BlueWallet
Open-source, bitcoin-only mobile wallet with watch-only and multisig “vault” modes. A common first self-custody wallet.
Blockstream app
Mobile and desktop wallet (previously called Green) from Blockstream, with optional two-factor multisig and support for the Liquid sidechain.
Phoenix
Self-custodial Lightning wallet from the French firm ACINQ. It opens and manages channels automatically, so it feels like a normal payments app while you keep the keys.
Zeus
Open-source mobile wallet that can run its own embedded Lightning node or remote-control one you host at home.
Aqua
Self-custodial mobile wallet from JAN3 that handles on-chain bitcoin, Lightning payments (through swaps) and the Liquid sidechain in one app.
Unchained
US company offering “collaborative custody”: a two-of-three multisig vault where you hold two keys and Unchained holds one, plus loans and retirement accounts built on the same structure.
Casa
Subscription service that sets up two-of-three or three-of-five multisig across your devices with one key held by Casa for recovery, and adds inheritance planning.
Nunchuk
Mobile and desktop wallet built around multisig from the first screen, with optional assisted plans and inheritance features. Can be used entirely on your own.
How to think about the types
- Hardware wallets keep keys on a dedicated device that never exposes them to your computer or phone. Malware on your laptop can ask the device to sign something, but you see and approve the details on the device’s own screen. This is the usual choice for savings.
- Software wallets keep keys on a general-purpose phone or computer. Fine for spending money and for learning. Many can also act as the screen and control panel for a hardware wallet, in which case the keys stay on the hardware.
- Lightning wallets are for small, fast payments. See using Lightning.
- Multisig spreads control across several keys, for example any two of three, kept in different places. Losing one key, or having one stolen, is no longer fatal. Collaborative custody services hold one key as a backup and help with recovery and inheritance, without being able to move funds on their own.
Order hardware wallets directly from the manufacturer, never second-hand or from a marketplace reseller. A device that arrives with a seed phrase already written down is a trap: the “seller” has a copy.
Seed phrase safety
When you set up a self-custody wallet it will show you 12 or 24 words. That seed phrase is a complete backup of every key the wallet will ever make. With it, your coins can be restored on any compatible wallet in the world. So can anyone else who sees it. Why it cannot be guessed is shown in the entropy demo. Everything that follows is about making sure nobody needs to guess.
Do
- Write the words by hand, in order, on paper or stamp them into metal.
- Check the backup by restoring from it before sending large amounts.
- Store it somewhere private, dry and fire-resistant. Consider two copies in two places.
- Tell one trusted person that a backup exists and how to find it if something happens to you.
- Consider a passphrase or multisig once the amount justifies the extra complexity.
Never
- Type the words into any website, form, chat or email. Ever.
- Photograph them, or store them in notes apps, cloud drives or password managers.
- Read them out to anyone claiming to be “support”.
- Enter them into a wallet app you reached through an advert or a link in a message.
- Keep the only copy in the same place as the device.
A security checklist
Tick them off as you go. Your ticks are saved only in this browser.
Common scams
Bitcoin payments cannot be reversed, which makes bitcoin the favourite payment method of fraudsters. The US Federal Trade Commission’s summary is blunt: nobody legitimate will demand that you pay in cryptocurrency, and anyone who guarantees profits is lying. The patterns repeat.
The investment “opportunity”
A friendly stranger, or a hacked friend’s account, introduces a trading platform with astonishing returns. The website shows your balance growing. When you try to withdraw there is a fee, then a tax, then silence. Often called pig butchering, it is the costliest fraud of all.
The fake support agent
You post a question about your wallet and someone helpful messages you. They need you to “validate” or “sync” your wallet by entering your seed phrase. Real support never asks for it.
Impersonation
A call from “the bank”, “the tax office” or “the police” says your money is in danger and must be moved to a “safe wallet”, or that a fine must be paid at a bitcoin ATM. No government agency takes payment in bitcoin.
Giveaways and deepfakes
A video of a famous person promises to double any bitcoin you send. The video is fake or stolen. Nobody doubles your bitcoin.
Fake apps and poisoned links
Counterfeit wallet apps, cloned websites one letter off the real address, and adverts above genuine search results. Also “address poisoning”: a scammer sends you a tiny payment from an address resembling one you use, hoping you copy it from your history next time.
Recovery scams
After you are robbed, a second set of crooks offers to get your money back for an upfront fee. They cannot.
Romance
Someone you met online, and have never met in person, needs money urgently or wants to teach you to invest. Whatever the story, the request to send crypto is the tell.
Physical threats
Holders who advertise their wealth have been robbed in person. Discretion is a security measure, and multisig with keys in different places means no one, including you, can hand everything over on the spot.
If you are targeted in the United States, the FTC and the FBI’s Internet Crime Complaint Center take reports. The FTC’s plain-language guide is here.
Sending and receiving
- To receive, your wallet shows an address or QR code. Use a fresh address each time; your wallet generates them automatically, and it is better for privacy.
- To send, paste or scan the recipient’s address, enter the amount and choose a fee. Read the address back. Malware exists that swaps addresses on the clipboard.
- Choose the fee by urgency. A higher fee rate gets you into an earlier block. The bar at the top of this page shows the current rate; if you are not in a hurry, a lower one will do.
- Wait for confirmations. One is enough for small amounts. Exchanges typically credit deposits after two to six.
- Stuck? If you set the fee too low, most wallets let you bump it with replace-by-fee.
Addresses are case-sensitive in older formats and unforgiving in all of them. Send bitcoin only to bitcoin addresses; coins sent to an address on a different network may be unrecoverable.
Tax, in general terms
Tax rules differ by country and change often. In broad outline:
- In the United States, the IRS treats digital assets as property, not currency. Selling bitcoin, swapping it for another asset or spending it is a taxable event, with a capital gain or loss measured against what you paid. Simply buying and holding is not. Receiving bitcoin as pay or from mining is income.
- Brokers and exchanges increasingly report customers’ transactions directly to tax authorities.
- ETF shares are taxed like other securities, which many people find simpler.
- Keep records: date, amount, price and purpose of every transaction. Reconstructing them years later is miserable.
- Many countries have their own, sometimes very different, rules. Some tax crypto gains at zero after a holding period; others tax them heavily.
This is a general description and not tax advice. The IRS’s own overview is here; for your own situation, ask a qualified professional.
The question nobody asks early enough
If you were hit by a bus tomorrow, could your family get to your bitcoin? An exchange account or ETF passes through an estate like any other asset. Self-custodied bitcoin does not. If nobody knows a wallet exists, or where the seed phrase is, the coins join the millions already lost.
The opposite mistake is just as bad: instructions so complete that whoever finds them can empty the wallet today. Solutions range from a sealed letter held by a lawyer, to multisig arrangements where heirs hold one key, to the inheritance services offered by collaborative custody companies. The right answer depends on the amount and the family. The wrong answer is not having one.