Which Bitcoin Wallet Is Best?
There are several different types of Bitcoin wallets with different specialties. No one can categorize a wallet which possesses the requirements of multiple users altogether. Any random Bitcoin wallet is primarily the correspondent of a bank account that allows people to securely hold Bitcoins, along with other cryptocurrencies and sign transactions using the address stored in the wallet.
Bitcoin traders use their wallets as a personal interface to the Bitcoin trading network, similarly as online bank accounts perform as an interface to the regular monetary system. A Bitcoin wallet holds the private keys for a particular transaction that is nothing but some secret codes that allow users to spend their coins.
Understanding What Bitcoin Wallets Are
Bitcoin wallets allow a user to send, receive, and store Bitcoins securely without any risk. Users are allowed to hold even the smallest unit of Bitcoin, i.e. Satoshi in their wallet. Wallets prevent their funds from any kind of hack and other risks by guarding their private keys.
The private key performs as a secret weapon to encrypt messages for a recipient, and also as a proof of Bitcoins ownership. It is paired with a public key to establish algorithms for text encryption and decryption.
Common Mistakes to Avoid While Choosing Wallets
Bitcoin wallets let you control your coin, which means you are responsible for both your Bitcoin’s security and your financial privacy. Following are some mistakes that you should take care to ensure your coin’s privacy and security:
You should always keep your coins in your complete control rather than leaving them in an exchange wallet.
Never keep all of your coins in one exchange. All of your coins will be gone if you lose access to the exchange wallet.
Recheck the recipient’s address as Bitcoin transactions are irreversible.
Use reputable online wallets with the highest possible security standards.
Different Types of Bitcoin Wallets
A Bitcoin wallet is basically the combination of your private key and public address. Different users have different requirements for a wallet, which is completely based on how and where they want to store their coins.
Several different Bitcoin wallets are used depending on the user’s holding of coins or their trading styles. Experts suggest using secure wallets like paper wallets or hardware wallets for big holdings, and mobile, web, desktop wallets for small to medium holdings.
Hardware Bitcoin Wallets or Cold Storage
Hardware Bitcoin wallets are undoubtedly the most secure option to keep your Bitcoins secure because these wallets store the user’s private keys safely in a physical hardware device. Such wallets keep your coins unaffected from any kind of spam and viruses. There are no stolen Bitcoin cases from hardware wallets recorded until now, which makes these wallets the most popular way for the traders to store large amounts of Bitcoin in the long run.
Mobile Bitcoin Wallets
The best feature of mobile wallets is users can make payments quickly and easily, and such wallets let the user handle Bitcoin transactions on-the-go. However, mobile wallets have some disadvantages when it comes to the security of Bitcoins. As these wallets are constantly connected to the internet, there are chances of the coins getting exposure to hacks. So traders should store small amounts of Bitcoin so that they don’t lose their life savings.
Desktop Bitcoin Wallets
Desktop wallets for Bitcoins store the private keys on the computer’s hard drive. But, as the mobile wallets, desktop wallets are also vulnerable and possess chances of various security hacks. This is because desktops are often connected to the internet like mobile wallets, and users need to follow basic security practices such as antivirus and anti-malware software installation and using a strong firewall.
Web Bitcoin Wallets or Hot Wallets
Web or online Bitcoin wallets store the private keys of Bitcoin transactions on a server that is controlled by a third party. Such web wallets let the users transact from anywhere anytime, similar to the mobile wallets. These wallets are not at all protected; the third parties running the website might get access to the private keys. The complete control of the funds goes in the hands of third parties. Such web wallets are also not for storing a large number of Bitcoins.
Paper Bitcoin Wallets or Cold Wallets
Paper wallets are documents with printed private keys and public addresses in the form of QR codes. To make a transaction, users should scan such QR codes and add the keys to a software wallet. Needless to say, paper wallets keep the private keys offline, which makes such wallets completely free from hacker attacks. Crypto experts recommend the users of paper wallets to keep them in a sealed plastic bag. They also recommend the traders to protect these wallets from any water damage by keeping them in a dry and safe place.
Which Bitcoin Wallet Should You Use?
For every trader, it’s important to understand that taking certain precautionary measures while choosing a wallet can protect the Bitcoins from various vulnerabilities. Bitcoin traders around the world need to look for the following pointers while opting for a Bitcoin wallet, regardless of whether it is software or hardware wallet:
Never give the control of private keys to any third party.
Always keep a backup to the keys and pin codes.
Keep an active development community to maintain the wallet.
Check the UI of any wallet for faster and easier use.
Check the compatibility of the wallet on different platforms or devices.
Top Bitcoin Wallets
Bitcoin traders should store their coins in high-quality wallets; otherwise, they could lose all their funds forever. They should also control the Bitcoins in their wallet, rather than giving control in the hands of any third party. However, it is not really the Bitcoins that traders control; instead, they control the private keys for the Bitcoin transactions they make.
The most important part of trading Bitcoin is security. If a Bitcoin exchange gets hacked, the Bitcoins of traders in that particular exchange will likely not be retrieved. So, they need to analyze the pros and cons of every wallet and select the best wallets that suit their requirements. The top 5 Bitcoin wallets are highlighted below for enabling the traders to make the correct decision:
FreeBitco.in: It is a great example of a Bitcoin faucet that provides you interest on your balance and gives better reward points as well as free lottery tickets to the users. Using FreeBitco.in you can win up to $200 every hour by just playing free spins or simple Hi-Lo games.
Trezor: It is the best and secure Bitcoin wallet in the market today. It is a hardware device that operates more than 9 cryptocurrencies, including Bitcoin. It possesses security features like a password manager, two-factor authentication, restores private key, and other beneficial characteristics.
Electrum: It is a reliable Bitcoin wallet with an automatic interface and easy transactions. Even a novice trader can use this wallet without taking much effort. The privacy of funds is highly maintained by two stages of encryption. No data of the users are stored online, only the users control the keys and Bitcoins.
Exodus: It is a software wallet with features like private key encryption and an intuitive user interface. It offers multiple device compatibility, such as desktop, mobile, and other hardware devices for its users. It does not associate user information in the exchange, as there is no account in Exodus.
Ledger Nano S: One of the best Bitcoin wallets at the lowest price. It offers unique features like supporting a wide variety of cryptos, easy portability, simplistic procedures, etc. It is trusted by many traders for its malware protection and its OLED screen. Bitcoin traders can easily carry it because its size is too small, and it looks like a foldable USB device.
Mycelium: It is the default Bitcoin wallet that was granted the best mobile app award by Blockchain.info in 2014. The wallet’s open protocol allows secure authentication with backup facilities. Traders can securely store large amounts of Bitcoins with this wallet.
In other words, every wallet varies from others, and all wallets have unique features each. The most suitable Bitcoin wallet will be the one that serves the requirements based on a trader’s investment intentions. If the traders want to achieve the best result, they should focus on the above-mentioned things before choosing a crypto wallet.