It will cost you almost a 100,000 South African Rands to buy 1 BTC at the time of writing this article, several fold more than one year ago. No one knows if bitcoin will continue to skyrocket in such an exponential manner, but if you decide to invest and store bitcoin you will need to decide on a bitcoin wallet where you will safely keep your investment.
Knowing which Bitcoin wallet to choose is the second most important step in becoming a Bitcoin user. Since you are investing funds in Bitcoin, choosing the right wallet for you is a critical step that shouldn’t be taken lightly. There are many wallets to choose from, including Blockchain or Bitcoin.com’s Official Wallet.
In this guide we will take you through the top items in our checklist we recommend reviewing before making the decision to choose a Bitcoin wallet. Remember, these are just suggestions to help you make an educated decision. In the end, things can always change based on the wallet and the market. But doing your homework first is highly encouraged.
Security is Paramount
Knowing the wallet is secure is important and shouldn’t be overlooked. If it’s a web wallet, you should always check if the website has HTTPS or HTTP? For it to have a secure protocol it must be HTTPS. Does the wallet offer secure and strong logins? In addition does the wallet offer two-factor authentication (2FA)? These are just a few things to look into before making a final decision.
In addition to a secure wallet platform, see if the wallet offers a multisig option. This is a preferred method when securing your bitcoin from theft and attackers. Multisig refers to requiring more than one key to authorize a bitcoin transaction (it takes multiple parties to spend the funds). An easy to understand analogy is think of a lock box, where it takes two parties with two different keys to open the lock box.
Owning Your Bitcoin
If you don’t have access to the private keys for the Bitcoin in your wallet, technically you do not have control over them. This is a very important factor when choosing a bitcoin wallet. Being able to possess the private key means that you will always have control over your bitcoin, and being able to move them in and out of the wallet at anytime. This also allows you to backup your wallet outside of the wallet service.
Does the Wallet Promote Address Reuse?
Is the wallet Hierarchical Deterministic (HD)? If so, that is a plus because HD wallets always use new bitcoin addresses which increases user privacy. User privacy in Bitcoin when using wallets has been an important issue over the years (see address reuse). Deterministic wallets are one-step forward to having a well rounded architecture and added protection for their users.
Is the wallet provider transparent in how they operate and who they are, and more importantly, is the wallet code open source? If not, it’s hard to say for sure how the wallet provider is securing your bitcoin. Open source code can be peer reviewed and checked for vulnerabilities. Also, make sure that the source code is kept up to date.
Is anonymity important to you? Do you need to register to use the wallet; does it accept minimal registration information (email only) to use the wallet? Is there a user verification process (Know Your Customer/KYC)? These are just a few things to keep in mind before making a choice.
Is the wallet easy to use or is it confusing? Theoretically, it should be simple and not require too much experience to get started with a new wallet. Think about how you will be using your Bitcoin too. Maybe a wallet that is made specifically for mobile devices is what you would prefer, or if you are an advanced user you can download a full Bitcoin client directly to your machine. Other options may include a more hardened approach, with wallet hardware devices that you can use to store your bitcoin offline.
Backing Up Your Wallet
Backups are another important aspect to bitcoin wallets. Does the wallet provider provide a way to backup the wallet? Is the backup encrypted? Is a backup restoration process available and easy to use? You should explore these options prior to loading your wallet with Bitcoin.
Is the Wallet Reputable?
This is one of the most important questions. If you want to make sure the wallet is on the up and up, search for the wallet on internet forums such as the Bitcoin Reddit or the Bitcoin Forum to see what your peers are saying about it. If you can’t find any feedback about it, ask in those forums if your peers have used it and what their experience was.
Bitcoin.com gives you access to all of the best Bitcoin wallets, including their official wallet, for your chosen mobile or desktop platforms. Ultimately, the choice is up to you and which features you want. Also, don’t forget that it is perfectly normal to use a variety of wallets for different purposes as well.
Video – Hardware wallet Ledger Nano S.
Video – Sending bitcoin through the Ledger Nano S. bitcoin wallet