This paper comparatively evaluates the effect of real-time velocity estimation methods on the passivity and fidelity of virtual walls implemented using haptic interfaces. Impedance width or Z-width is a fundamental measure of performance in haptic devices. Limited accuracy of velocity estimates from position encoder data is an impediment in improving the Z-width in haptic interfaces. We study the efficacy of Levant's differentiator as a velocity estimator to allow passive implementation of higher stiffness virtual walls as compared to some of the commonly used velocity estimators in the field of haptics. We first experimentally demonstrate feasibility of Levant's differentiator as a velocity estimator for haptics applications by comparing Z-width performance achieved with Levant's differentiator and commonly used finite difference method (FDM) cascaded with a low-pass filter. A novel Z-width plotting technique combining the passivity and fidelity of haptic rendering is proposed, and used to compare the haptic device performance obtained with Levant's differentiator, FDM+low-pass filter, first-order adaptive windowing (FOAW), and Kalman-filter-based velocity estimation methods. Simulations and experiments conducted on a custom single degree-of-freedom haptic device demonstrate that the stiffest virtual walls are rendered with velocity estimated using Levant's differentiator, and the highest wall rendering fidelity is achieved by FOAW-based velocity estimation scheme.