The cryptocurrency world is high-tech, automated. Most projects are highly decentralized. Many good things derive from those features, but they also mean that the system does not forgive any mistakes. The lack of central authorities in, say, the Bitcoin network, makes it impossible to clarify or repair any errors, innocent though they may be. Navigating the crypto-verse successfully and free of slips is to make informed choices.
One of the first few (and most important) choices you’ll need to face is choosing the right Bitcoin wallet for you. Even if your main interest is not in BTC, but some other altcoins, the trading pairs in most exchanges are not designed to use fiat currencies.
Most altcoins are trading against Bitcoin, so there’s just no way about owning Bitcoin at some point or other. In this article, we’ll try to shed some light and give you the information you need to select the wallet that gives you all the functionality and security you need.
Bitcoin remains the world’s central cryptocurrency. As such, it holds most of the attention of all kinds of investors all over the planet. From the rookies to the most seasoned professionals, Bitcoin is the main thing. In this context, it’s understandable if you have doubts about timing. Is this the right moment to join in the action?
That shouldn’t worry you too much. The blockchain technology industry is expected to keep growing steadily (if with fluctuations) and being fully matured by 2025. Blockchains will become part of our daily lives at some point in the next six years. So the first step in this journey is choosing a Bitcoin wallet.
The crucial thing is to make an educated choice when opening your first Bitcoin wallet. Too many new users get scammed just because of lack of previous research. A functional Bitcoin wallet satisfies a brief list of relevant criteria. In this article, we tell you what those are.
Bitcoin wallets come in five different varieties: paper wallets, mobile, desktop, web, and hardware. Let’s dig a little deeper into each kind.
You can think of hardware wallets as a sort of long-term investment repository. They’re considered cold wallets because they are never online on the internet. The form factor usually resembles a USB sticks or a small tablet device. The main feature in this kind of wallet is its high degree of security you can have when all of your private keys are stored offline. That feature alone makes hacking incidents almost impossible.
It’s the most expensive type of wallet because you have to buy a physical device. Because of the cost, you shouldn’t consider a hardware wallet unless you’re going in for USD 1.000 or more and you plan to stay in crypto for the long run.
However, the price is worth it. As far as we know, no cryptonaut has ever lost a single Satoshi while using hardware wallets. Along with high security, physical-digital wallets are easy to use. Completing a transactions needs just for you to plug your wallet into your computer and get the authorization. The high costs associated with the devices are the main disadvantage. However, there are suitable devices available in the market at reasonable prices.
In stark contrast with hardware devices, Web Wallets are the most insecure of all. The wallet’s data is usually stored on cloud services so that this kind of service provides access to a myriad of different devices as long as they have an Internet connection. This easy access is not always a good thing since it makes it very hard for users to keep full control over their private keys. The risk of exposure is very high.
The reason that so many users prefer web wallets despite the security challenges they present is, quite simply, that they are very convenient to use. They are probably the most comfortable way to manage your digital assets, but it comes at a price.
The pros are that these wallets are straightforward to use, highly practical, very convenient, accessible from anywhere in the world, and they don’t need any specific device because they’re usually on very versatile cloud networks. The cons are all about security. Most of the scams we’ve seen in crypto over the years have to do with loopholes in web wallets.
We find that kind of situation all the time when considering any digital wallet. You can have excellent security, or you can have fantastic convenience of use and accessibility, but you can’t have both at the same time. This problem can’t be solved, but you could have a hardware wallet to keep safe the portion of your capital you consider untouchable while also having a web wallet you used for relatively small quantities for everyday trade and payments.
Similar though desktop wallets may seem to web wallets, they’re a different animal in several ways. They have much better security features for a start. You can download and install a desktop wallet to your PC or laptop computer quickly and easily, no strings attached.
Most of these wallets need an internet connection, so they’re usually considered to be hot storage. The problems arise when there are virii on your computer. When that happens, the risk is to lose all your digital wealth to the hackers that control a given virus.
While desktop wallets are very convenient and easy to use, we go back to the problem of security vs. convenience. If you are going to choose a desktop wallet, you must first make sure your computer is adequately protected against cyber infections that can give away your private keys to external parties.
If you have a mobile banking app on your phone, then you’re all set to start using a mobile digital wallet. Both apps are almost identical. A mobile wallet enables you to use your cryptocurrency to pay for goods and services. It’s quite popular in Asia and the Pacific.
As things stand right now, you can even get a physical plastic debit card associated with your wallet that you can use in settling payments in just the same way you can use any Mastercard or Visa. Security in this kind of wallet is not optimal, not because of holes in the software, but simply because there’s always a risk of losing a mobile phone, or that malfunctions can arise.
Mobile wallets are the most convenient ones by far — yes, even more than web wallets — as they enable you to use your digital wealth on the go. However, if security is your top priority, you’d be better off using hardware or desktop wallets.
Yes, paper wallets are a thing in cryptocurrencies. It’s hard to believe that one of the most advanced digital technologies in human history could still need physical pieces of paper to work. That said, some paper wallets do have excellent security features.
As the name implies, this is a wallet that made out of ink and paper. It’s basically a slip in which the public and private keys associated to you are printed. The term also refers to the software or web platforms that generate the keys, as well as the digital version of the paper that you’re supposed to print. The keys are stored offline, so paper wallets are cold storage, and they’re utterly immune to cyber-attacks. Hackers are not a danger for paper wallets at all. Things can only go wrong if you lose your slip or if it’s stolen from you.
While paper seems rudimentary and anachronistic in the era of Bitcoin, it’s as well protected as you want, and if you wish to keep your Bitcoins safe and away from the net for a very long time, paper can indeed be the way to go. The problem is the lack of convenience. Settling a transfer needs to scan a QR code or to type by hand your encryption keys which is a bit of a bore, and it’s prone to errors.
The chosen ones
In this last section, we tell you which are the six digital wallets we regard most highly.
Coinbase: the best web wallet
It’s is the path of least resistance if you want to buy and sell digital tokens using several devices. It allows you to link your digital wallet directly into a bank account so you can move money freely between both services. Token purchases are instantaneous, so it’s an optimal choice for beginners.
Trezor: the best hardware wallet
In the most secure wallet category, Trezor is the safest option. It’s a physical device you need to plug into your computer every time you want to manage your digital wealth.
The device supports several currencies, and it includes many other useful features like a password manager and two-factor authentication. Just make sure not to lose your password because, while there is a recovery process, it’s a very long one. That’s not a bad thing. The wallet is supposed to keep your tokens safe, so the toy is doing the job correctly.
Electrum: the best desktop wallet
Electrum is available for Linux, Mac OS X, and Windows. It can connect with hardware wallets. It’s an offline (cold) wallet with excellent security. It offers something for everybody. Its advanced features are delightful to the more experienced users while beginners find that it’s easy to run, install, and used.
Crypto.com: the best mobile wallet
It’s an innovative platform when it comes to cryptocurrency and payment systems. It offers the Metal Visa cards at real cost and with a 5% cashback on all spendings. If that doesn’t impress you, there’s more. The users can instantly apply and get crypto loans by depositing digital assets into their accounts.
It’s innovative, catchy, and it has a comprehensive feature variety. Crypto.com stands out from the rest.
Bitcoin Paper Wallet: the best paper wallet
If long-term security and immunity from digital attacks are your top priority, then paper key storage is the way to go.
Bitcoin Paper Wallet generates unique addresses as well as public and private encryption keys, and it prints them out for you. Thus your long-term digital capital remains offline, safe, and ready for you to use when the time comes. Is it a bit too old fashioned for the current times? Yes. That’s why it’s immune to technological problems.
So now you know. The market is flooded with apps, software, and websites that purport to be the one wallet you’ll ever need to navigate the cryptosphere safely and conveniently. Unfortunately, not every option is reliable nor safe.
Getting involved in the cryptocurrency market is very exciting, but profiting from it is a tough thing to achieve. That’s why you should never hesitate to do enough research before you pick a wallet. It could be the difference between total success or becoming one of the many scam victims we’ve seen over the years.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.