If you are choosing your Bitcoin wallet randomly, you are doing it wrong.
This is probably the worst one can make that could result in the loss of bitcoins, all at once. Not just that, choosing your wallets based on suggestions by a friend who is only a day older in experience than you in crypto is not a wise decision.
One has to be serious while choosing a Bitcoin wallet because the wallet is something where your private keys and public keys reside, which if compromised can result in you losing all your bitcoins.
In a detailed write-up on Bitcoin wallets in the past, I mentioned the different types of wallets, but not which to use when.
I did so deliberately because which wallet to use and when is a separate topic altogether that requires a dedicated guide like this one.
So here I am today, to share with you how to select a Bitcoin wallet for yourself.
This guide will enable you to understand different wallet options you have and which one you should pick for storing a little or a huge amount of Bitcoins.
How To Select A Bitcoin Wallet (Complete Guide)
When selecting a reliable Bitcoin wallet, irrespective of whether it is a software or a hardware wallet, one should judge it based on the following criteria:
- Control private keys: A wallet where you own and control your keys.
- Backup & security features: Seed backup keys and pin codes.
- Developer community: Active development community for maintenance.
- Hot/Cold Wallet: Whether a wallet is a hot or cold wallet.
- Ease of use: Elegant UI for fast and easy use.
- Compatibility: Compatible with different operating systems.
- HD Wallet: A wallet that generates new addresses itself.
- KYC: A wallet that doesn’t require KYC.
These are a few aspects that you should look into for any type of wallet you are going to use for any purpose.
But there is more to it.
The purpose for which you are going to use a particular wallet also plays an important role in selecting which type of wallet is required by you. Some of the purposes are:
- Long-Term Savings
- Short-Term HODL
- Daily Transactions
- Daily Buy/Sell or Trading Of Crypto
Choosing The Best Bitcoin Wallet (Let’s make it easy for you)
Based on above-mentioned criteria and purposes, one can easily select a good Bitcoin wallet for themselves. How? Let me explain in detail.
Hardware wallets are wallets that satisfy all the mentioned criteria. Moreover, they are cold wallets that never comes in contact with the internet directly. So if you are someone who wants to store their savings for a long-term then hardware wallets are the most suited option for you.
Also, they are HD wallets that never re-use the same public address again. You can also use a hardware wallet by connecting it to an infected device.
Some of the hardware wallets that we trust are:
Here is a video tutorial series by Harsh Agrawal on Ledger Nano S & Trezor.
There are some software wallets that satisfy all of the 8 criteria of a good wallet, so one can also look at these wallets as an option based on their purpose.
Let us say the purpose is to HOLD some cryptos for a short period of 2-3 months. In this case, desktop wallets are a good option to go for. Desktop wallets are hot wallets that connect to the internet as soon as one goes online.
But they provide other security features of back seed, PIN code, as well as HD wallets to satisfy the short-term need. Moreover, remember, this type of wallet will always be at risk of malware and virus if any on your device. Some of the wallets that one can look for in this category are:
Note: For short-term HODL, up to 2-3 months, as an extra caution people use hardware wallets too and I am one of them. If the hardware wallet supports that currency I always prefer using that one.
Mobile wallets and web wallets are the other kinds of software wallets. Most of the mobile wallets fulfill all the criteria that I have mentioned but there are very few web wallets that match at least some of the criteria that we need.
Web wallets are wallets like Coinbase. where you need to do your KYC and you never control your private keys. Inbuilt wallets of centralized exchanges like Bittrex or Binance also fall under such category.
That is why, if you want to use these wallets for daily crypto trading with security measures like 2-FA authentication, it is alright, but for long-term or even few days, it is risky storing your cryptos here.
On the other hand, there are many mobile wallets that satisfy our criteria and are fit for doing small daily transactions and even crypto trading. Some of these wallets are:
These mobile wallets are very handy and can be used by anyone on the go to purchase daily routine things.
Note: Though these wallets satisfy the criteria, it is not recommended to store large amounts of Bitcoins on them because they are hot wallets that are always connected online.
Conclusion: The Best Ways To Store Bitcoin
There are different types of wallets available but not all are worth using because many wallets are created just to scam people.
Also, do look for multi-sig functionality in the wallet. By using this feature, you can make your Bitcoin wallet even more secure. However, this feature is not supported by many wallets.
It is perfectly fine to use multiple Bitcoin wallets for multiple purposes too.
Write back, using the comment section below, and tell us which wallets you use to store your bitcoins.
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