Choosing the wrong bitcoin wallet can take away all your bitcoins. Because you store all your bitcoins in the bitcoin wallets. All your private keys and security information are stored in the wallets. If you use a wallet that is not safe then your private key can be misused. But how can you choose the right one?
Taking suggestions from a friend who has not much experience with the wallets is not the right way. You have to be serious and make some research before you choose your wallet or take suggestions from someone who has good experience in the cryptocurrency wallets. Anyway, here you will get to know the factors that will help you to choose the right wallet.
Before that, let us understand about bitcoin wallet.
A bitcoin wallet is used for storing the bitcoins. To be precise, a private key that denotes the address of every bitcoin is stored in the wallet of a person. That means every bitcoin is assigned a secret number and a wallet is used to keep those secret numbers safe. These wallets are mainly of two types and again subdivided. There is a software as well as hardware wallets. A software wallet is again divided into three types such as a mobile wallet, a desktop wallet, and web wallets.
Now let us know about different types of wallets in detail.
Hardware Wallets: Hardware wallets are the most trusted and safe wallets. Because these wallets do not come in direct contact with the internet, so there is less chance of any cyber-attacks. If you want to hold your bitcoins for a long time then hardware wallets are the best choice. However, these are the wallets where you have to spend money to own the wallets.
Software Wallets: (Mobile Wallets, Desktop Wallets, Web Wallet)
Desktop Wallets: Desktop wallets are software installed on your desktop and it can be used once you go online. You have complete control over sending, receiving, and storing private keys for different bitcoin addresses. If you are a short-term trader or you want to hold bitcoins for a short period like 1-2 months then desktop wallets are better options. However, make sure that your desktop is free from malware and viruses.
Mobile Wallets: Mobile wallets have some advantages over desktop wallets. You can perform all the operations with your smartphone from anywhere, whereas the desktop wallet is limited to one particular location. A mobile wallet is a program (mobile application) that can be installed on your smartphone. It offers multiple transaction options by entering private keys, scanning QR code, NFC transactions, etc. Likewise, a desktop wallet, you need to be careful about viruses and malware.
Web Wallets: Web wallets can be accessed from anywhere and any device such as from a desktop or mobile or tablet. But you need to be extra careful about choosing a web wallet as your private keys are stored online.
Criteria for Choosing the Right Bitcoin Wallet
When you are choosing your digital wallet, consider these following criteria:
- Control: Choose a wallet where you own the private keys and you have control over your private keys.
- Backup: Select a wallet that offers security and backup features. Ensure that it allows you to seed back up keys.
- HD wallets: Wallets which can create automatic new addresses.
- Compatibility: Compatible with different OSs.
- KYC: A wallet that does not require any KYC verification.
These are important aspects of choosing a wallet. If you are new to the cryptocurrency market or if you want to know how can you earn money with bitcoin. Then you can learn it from how to invest in bitcoin.
Note that, it is important to read reviews, user’s ratings, and previous performance of a wallet in terms of security and customer support.