After finally acquiring your first Bitcoin, the next thing you need is a bitcoin wallet. Like your ordinary wallet, this wallet is meant to secure your coin. However, selecting the best wallet to use is an important part of being a Bitcoin owner, especially with many digital wallets in the market.
With so many wallets to choose from, it is crucial to have a guide to follow before you finally decide to choose a Bitcoin wallet. While Bitcoin and the cryptocurrency market keep evolving, the suggestions in this guide can help you make an informed decision when it comes to choosing a Bitcoin wallet. It is also essential to do your homework and find out what best suits your requirements.
It is always advisable to be cautious of any service that stores your money online. Cyber attack is real and several exchanges and digital wallets have suffered from security violations. Definitely, you cannot trust such platforms to store your money online like a bank.
When it comes to Bitcoin storage, you may want to compare various Bitcoin wallets before you zero in on a particular model. All the same, it is important to use a two-factor authentication for any type of digital wallet that you decide to use. The following are key features to consider when choosing the best Bitcoin wallet.
Security is vital
You should not overlook the security features of your digital wallet. If you choose to use a web wallet, you should confirm whether the website has an HTTPS secure protocol. Websites with HTTP only are more prone to manipulation. In addition, you should ensure that your wallet has secure and strong logins. Choose a unique and strong password with both upper and lower-case letters, special characters, and numbers. Above all, always work with a web wallet that offers a 2-factor authentication.
Consider Multisig feature
Besides a secure wallet platform, you should find out whether the wallet provides the multi-signature option, which is important to secure your account in case of any hacking attempt. The multisig feature offers more than one key with multiple parties to access your account. With this feature, think of your account like a box with two different keys under the custody of two different people. Both keys must work together at any given time to open the box. This eventually leads to ultimate security of your Bitcoin wallet.
Be the sole owner
Any time you choose a bitcoin wallet, ensure that you have access to the private keys of the wallet. Without access to the private keys to your wallet, you have no control over your funds. Once you possess the private keys to your account, you can monitor your account anytime, and even install a backup without involving the wallet service.
Check whether the wallet allows address re-use
Choosing a bitcoin wallet with a Hierarchical Deterministic (HD) feature is an added benefit to the security of the account. HD-compliant Bitcoin wallets generate new addresses for each transaction, which enhances user privacy. Over the years, there have been issues surrounding address reuse, which might compromise the security of the account.
Small amounts in wallet
Think of your bitcoin wallet as a wallet with cash. If you cannot trust your pocket with a wallet containing a thousand dollars, you might have a similar reservation for your bitcoin wallet. Generally, it is advisable to keep only a small amount of bitcoin on a digital wallet such as a computer, laptop, tablet, Smartphone, or server. Just keep something that you can easily access for everyday use. The rest of your Bitcoins should be in a secure, safer, offline environment.
Do you know your wallet provider? How do they operate? Is your wallet code open-source? The answer to these questions could help you determine the level of transparency in your bitcoin wallet. For example, open source codes can be peer-checked and reviewed for any form of vulnerability.
Do you prefer to remain anonymous? Do you want to register your details in order to use the wallet? Does the wallet require e-mail only to access it? Does it offer any user verification method? These questions are important and their answers could help you make an informed decision.
Consider user experience
Some wallets are difficult to use, so check whether your wallet is easy or confusing to use. Your new bitcoin wallet should be simple to operate. In addition, you need to know how you will be using your bitcoin. Some wallets can work only on mobile devices. Other options also exist, including a wallet with the ability to store your bitcoins offline.
Bitcoin wallet backup
Wallet backup is an important aspect to consider. Some providers offer backups, others don’t. All the same, as a user you need to confirm whether the backup is encrypted. Does the backup have a restoration process that is readily available and easy to use? Before you load your wallet with bitcoins, make sure you are safe as far as bitcoin wallet backup goes.
As many digital wallets exist in the market, it is important to determine the reputation of your wallet before you load it with bitcoins. Best places to find information regarding wallet reputation include Bitcoin Reddit and Bitcoin Forum. Once you join the forums, you can ask anything about your preferred wallet and your peers would offer constructive suggestions.
Just as in real life where security is inevitable, your bitcoin wallet needs to remain secure at all times. Bitcoin is a progressive cryptocurrency that enables you to transfer value anywhere while having full control of your funds. With such qualities, it deserves the highest level of safety and security. As a user, you hold the ultimate responsibility to instill good practices to protect your funds. It is also important to note that you can use multiple bitcoin wallets for various purposes.
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