It isn’t enough to decide you want to invest in Bitcoin. Your cryptocurrency needs to be stored somewhere secure. Options include hardware wallets, paper, wallets and online wallets for storing your cryptocurrency. The hard part is determining what Bitcoin wallet is right for you and your intended application. Here are a few tips on how to choose the right Bitcoin wallet.
Consider the Amount of Cryptocurrency You’ll Be Holding
The more popular choice for storing large amounts of cryptocurrency offline is a hardware wallet. It is a physical piece of hardware that holds your private key. If you want to send your Bitcoins to someone, you need to connect the device to the computer and tell it where and how much to send. Hardware wallets even protect your data if you accidentally connect to an infected computer. You do have to pay for the hardware wallet, and you need to be careful not to lose it.
If you’re looking for examples of hardware wallets, Crypto Head has a guide on hardware wallets, rating them based on factors like security, ease of use and the type of cryptocurrencies it supports. Then you only have to decide how to back-up your private key and where you want to securely store the hardware wallet.
Alternatives to Hardware Wallets
One of the other options is using what is commonly called a paper wallet. With a paper wallet, the private key is simply written on a piece of paper. The upside is that it is impossible to hack remotely. The downside is that the key is lost if you lose the paper, and someone could steal the paper. Then there’s the fact that if you use a paper wallet, you can only receive rather than send/receive. If you want to send Bitcoin, you have to import a private key into a digital wallet to process the transaction.
Software wallets are faster, simpler ways to hold Bitcoin. You could have your Bitcoin wallet stored on your smartphone, your laptop, or your computer. The wallet is connected to the internet, so it is able to transfer money essentially immediately. The downside is that they’re less secure. You can use software wallets for small amounts of Bitcoin and for “spare change”, the amount you’re willing to risk if the account is hacked.
Do Your Research
If you’re considering using a web-based cryptocurrency wallet, check the site’s reputation for security. Don’t rely on their testimonials. Instead, research their reputation with the Bitcoin community. Pick one that has good security features like 2-factor authentication. If you’re shopping for mobile Bitcoin wallets, read up on their user reviews.
Read what people say worked and didn’t work for them, since the “perfect” Bitcoin wallet for one group of people may not be what’s right for you. For example, someone running a lot of little transactions may value convenience while someone receiving a lot of payments or large payments may value security more than convenience.
There are many different cryptocurrency wallets out there, and there is literally something for everyone. Determine what you need and want out of the Bitcoin wallet, so you can find the right one for you.