Bitcoin wallets come with different features, security and levels of ease of use. This guide will show you how to choose the right wallet for you.
The platform
Bitcoin wallets can operate on your desktop, mobile device or you can just log in by using your browser. Most people want to check their bitcoins wherever so they will want the mobile app version. This is usually known as a hot wallet and it acts like your normal everyday wallet, you take it everywhere with you. On the opposite side, you have a cold wallet that is like your bank, it keeps your funds stored and safe for you.
There is another type of wallets that come with their own device and are called hardware wallets. They have the highest level of security as they keep your coins stored offline, and you only use them when you want to make a transaction.
Paper wallets are also a way of storing offline bitcoins. Paper wallets are physical documents that have printed on them your Bitcoins’ private keys. However, storing bitcoins on paper wallets is not safe unless there are taken very strict precautionary measures during the initial phases.
Security Features
The basic bitcoin client is a wallet also, but you have to know certain commands to make it execute operations, and it also requires a lot of time to make it user-friendly. These wallets are also full of nodes, so they download a copy of the entire blockchain on your computer, which can take up a large amount of time and space to do. Although these types of wallets that you set up yourself are more secure than browser wallets, because they don’t keep your funds in a central place that is run by a third party.
For a browser or web wallet, you should always check if the website is HTTP or HTTPS. For it to be secure, it has to use HTTPS protocol.
If you run your wallet on your phone, they have a higher risk of being hacked. However, most wallet apps on mobile devices have a third party that supervises your wallet and private keys for you.
It is also important to see if a wallet offers a multi-signature option. The multi-signature uses more than one key to authorize a bitcoin transaction, thus securing your digital assets from theft and attackers.
Address storage and reuse
If you do not have the private keys of your wallet, you technically do not have control over them. This is a determining factor in choosing a wallet. Having the private key in your possession means that you will always have control over your bitcoin and you can move them into other wallets whenever you want. Having the private key enables you to back up your wallet outside of the wallet service.
There are wallets that provide encrypted backups and backup restoration processes.
Wallets that use Hierarchical Deterministic (HD) have increased user privacy because they always use new bitcoin addresses.
Wallets with vouchers and debit cards
Wallets sometimes offer bonuses and extra features to attract new users such as exchange services, bitcoin prepaid debit cards and vouchers that offer discounts.
Although most exchanges have wallets and an entire set of trading options, it is not recommended you keep your coins in the platform’s wallet.
Some wallets offer debit cards that can be used in everyday shops. They charge different fees for their cards’ uses, so be careful which one you choose and always read carefully all the fine print.
Wallets can also get you special discounts in certain places. Some of these wallets have an entire range of discount vouchers which you can purchase with bitcoin.
Wallet reputation
Always check on what kind of reputation a wallet has. You can search on internet forums or review sites to see what other kind of experiences other users had with the service.
Summary
Picking the right bitcoin wallet is indeed a difficult task. There are so many wallet services available, that one has to know all technical details, fees and features before making a decision. We hope this guide will be useful in choosing the right wallet in which you will keep your bitcoins.
