Whatever your needs are, there’s a wallet just for you. Find out how to pick the best bitcoin wallet to get you exactly what you need.
There are almost as many types of bitcoin wallets as there are bitcoin users. Finding the right wallet early on is a sure-fire way to save yourself a load of hassle. Choosing the wrong wallet can make it difficult to trade or purchase bitcoin in the ways that you need. It can also open you up to unnecessary cyber vulnerability, or cause you to lose your coins just based on user error.
Choosing the right wallet sets you up for continued success along your crypto journey. It can all seem a bit overwhelming, especially to traders who are comfortable with fiat, or who have never used bitcoin before. Bitvavo, a service dedicated to getting users the most out of their bitcoin accounts, and companies like them, show us how to look at the nuances of bitcoin wallets.
Why the Right Bitcoin Wallet is Important
Once you choose to purchase bitcoin, you have to think long and hard about how you plan on using it. How you plan on using your bitcoin will have a large impact on which wallet will be the best choice.
That being said, there are a few things that you must consider before choosing any one bitcoin wallet. There are universal necessities for any wallet you choose. Each of them are paramount to keeping your coins safe.
- Security is the most important thing
No matter what wallet you choose, you have to ensure that the wallet itself is secure. If you’re choosing a web-based wallet, make sure that the URL you are directed to is a secure address. Namely, it should have an “HTTPS” prior to the beginning of the web address, not just an “HTTP”.
There are also other security factors that need to be identified. Two-factor authentication procedures, in conjunction with strong logins, are important for keeping your coins safe. Multi-signature or “multi-sig” wallets have an even higher level of security built-in. Multisig wallets offer heightened security against hacking and malware. These wallets require more than one key in order to authorize transactions.
- Consider an offline storage wallet
An offline wallet is an ideal place to store coins that you don’t plan on using in the near-term. Offline wallets aren’t connected to an internet server, so any coins stored in them are safe from the prying eyes of hackers or malware. Offline wallets can send coins into online wallets when they are needed to be used. Whether it’s an offline or online wallet, ensure that your bitcoin wallet software is regularly updated with the latest patches.
- Make an encrypted backup and keep your key safe
Make sure that you’re capable of creating an encrypted backup of any wallet you have. Always keep your backup up to date and sync often. Keep a copy of your personal keys written down and in a safe place. Ensuring that you’ll never be without them. Also, make sure that no one else has control over your keys. Some platforms will not give you access to your personal keys, which means you don’t really have access to your bitcoins.
Types of Bitcoin Wallets
Once you’ve got security locked down, it’s time to dive in and get that wallet. Consider what types of cryptocurrencies you will be trading in. Whether it will be a short-term or long-term investment. Do the costs of the wallet adhere to your goals? What types of trades will you want to make?
As you answer these questions, the best wallet will become clear. The most common wallets used by traders are:
- Single Currency Wallet
- Useful for traders that plan on sticking to one cryptocurrency.
- Multi-Currency Wallet
- Ideal for traders who want to juggle more than one cryptocurrency without having to manage multiple wallets.
- Hardware Wallet
- One of the safest options that are downloaded directly to the user’s machine. Often, these wallets can be backed up to USB or external drives for added security.
- Paper Wallet
- An offline wallet that users print out the personal keys to.
- Platform/Cloud Wallet
- Wallets that are offered to traders via the trading platform of their choice. Often, these wallets are both encrypted and insured for further protection. As you continue trading and becoming more familiar with the markets, your bitcoin wallet needs will undoubtedly change. Bitvavo and other trading platforms that are beginner-focused, remind us that just because a wallet works now, doesn’t mean it will be ideal forever. Also, if you end up with a wallet that just doesn’t seem to fit your needs, have no fear- change is all a part of the game.