Choosing The Right Bitcoin Wallet: Payments vs. Savings

Discover the world of Bitcoin wallets and find the one that suits you best.

Choosing The Right Bitcoin Wallet: Payments vs. Savings
January 2, 2024
Andrew Mahowald

With the surge in popularity of Bitcoin as both an investment and a revolutionary digital currency, many are finding themselves needing to adapt to various use cases for their money (not just storage, but payments, too).

Whether you're an investor, a day-to-day spender, or somewhere in between, the type of Bitcoin wallet you choose can make a significant difference in your experience.

In this article, we will guide you through different types of Bitcoin wallets, highlighting their benefits and risks, ensuring that you're not just storing, but also transacting with ease.

And we’ll also provide a brief guide on how to transfer your Bitcoin from user-friendly, payments-oriented wallets like the Blink Bitcoin App to Cold Storage for long-term safe keeping. 

Best Wallets for Using Bitcoin for Payments:

1. Custodial Bitcoin Lightning Wallets

What are they? These are wallets provided by third-party companies that hold private keys for your funds. They are easier to get started with, easier to make cheap/fast Lightning payments with and can help enhance the speed of Bitcoin adoption.

Examples: Blink, Alby, Bitcoin Jungle, Wallet of Satoshi, CoinOS, Walletano


Useful features: Wallets like Blink offer great features like Stablesats (to avoid Bitcoin’s volatility) and the ability to receive payments offline.

Efficiency: Facilitates rapid and affordable transactions through the Lightning Network.

User-friendly: Designed with intuitive interfaces, perfect for newcomers.


Third-party control: These service providers oversee the custody and transacting of your funds, which means you’re trusting them to keep your funds safe and not restrict your ability to transact.

Security vulnerabilities: Any bitcoin not held in cold storage by private keys that only you have access to are subject to some level of counterparty risk; this does not negate the benefits of using custodial services for appropriate use cases. When you do use custodial services, make sure to evaluate them on the basis of security. Do they have secure multisig storage of funds? Do they provide features that help you protect your account? 

When to consider:

If you’re looking for payment speed, reliability and simplicity, custodial wallets are often a great option (especially for non-technical individuals).

2. Self-Custodial Lightning Wallets

What are they? Lightning Network-supported wallets where users maintain full control over their private keys (eg. nobody can move a user’s money except themselves). Ideal for intermediate or advanced users, they offer additional control and privacy. For more info, check out this excellent in depth lightning wallet review.

Examples: Blixt, Phoenix, Breez, Electrum, Zeus


Autonomy: Complete control over funds and private keys.

Enhanced privacy: Less traceable transactions compared to KYC’d and/or custodial services.


Technical complexity: Might be overwhelming for novices.

Loss of keys: If private keys are lost, so are the funds.

When to consider:

If you possess a fair understanding of Bitcoin, prioritize privacy, and wish to maintain your keys while leveraging low cost and instant bitcoin payments enabled by Lightning Network, self custodial Lightning is for you.

Best Wallets for Using Bitcoin for Long-term Savings:

3. Hot Wallets

What are they? Software wallets that store private keys on an internet-connected device, usually on a computer or smartphone. They offer a balance of convenience and security.

Examples: Blue Wallet, Sparrow, Electrum


Accessibility: Online nature ensures funds are readily available.

Usability: Typically features user-friendly interfaces for hassle-free management.


Online threats: Being online means susceptibility to hacks.

Device dependence: Compromised devices might risk fund safety.

When to consider:

If you're striving for a balance between convenience and security, and only store a minimal portion of your Bitcoin assets for ready access.

4. Cold Storage Wallets (Signing Devices)

What are they? Physical devices or offline methods that store Bitcoin private keys completely offline, offering the absolute highest level of security.

Examples: Seedsigner, BitBox02, Blockstream Jade, Coldcard.


Superior security: Keeping funds offline shields them from online threats.

Ownership: Total control over your private keys and consequently, your funds.


Limited accessibility: Fetching funds can be a process.

Loss of device: While you technically should only need your 12 or 24 word seed phrase to recover funds after losing your device, the process can be less daunting and more straightforward if you also write down and secure the Derivation Path generated from your seed. If you do need to recover funds after losing your device and Derivation Path, you can learn how at

When to consider:

If holding bitcoin as a significant long-term investment is your aim and security is paramount.

Moving Your Bitcoin to Cold Storage

Seeking a more fortified environment for your Bitcoin holdings? That’s a great idea. When you have a meaningful amount of savings - and you have learned enough to ensure you don’t make a mistake - the safest place to hold it is in cold storage with full custody of your own private keys.

Here's a simple guide to transfer Bitcoin into cold storage, using the Blink Bitcoin App as an example:

  1. Secure a Cold Storage Solution: Opt for a reliable signing device.
  2. Generate a Destination Address: Use your cold storage solution to generate a public address to receive your bitcoin. Copy it to clipboard.
  3. Paste Destination Address in the Blink App: This corresponds to the public address generated by your cold storage solution. Best practice is to scan (via QR) or paste the address, instead of trying to manually type it.
  4. Initiate Transfer: Still in the Blink app, tap on 'Send.'
  5. Review and Confirm: Always recheck the details, notably the address, before proceeding. Assuming you copy & pasted the address, checking the last six characters should be sufficient. (learn why)
  6. Wait for Confirmation: Transfer times may fluctuate based on network traffic. Once confirmed, your Bitcoin resides securely in cold storage.

For more info, find this excellent, in-depth guide on cold storage options and implementation from Bitcoiner Jameson Lopp.


If you’re looking to maximize usability, reliability and everyday payments (or just trying to get started), the Blink Bitcoin Wallet is a great option for you.

But the Bitcoin world is vast and offers a plethora of choices depending on how you plan to use your Bitcoin and which features are most important to you.

Aligning your wallet selection with your core intent can make your life a lot easier and save you a lot of stress. Whether you're capitalizing on the Lightning Network's agility or solidifying your long-term holdings, there's a specific wallet tailored for every enthusiast.

A hat tip to Darthcoin and Okin for contributing valuable subject matter expertise and wallet recommendations to this article.

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