Before you choose a Bitcoin wallet, you have to take two major steps which are to decide the kind of wallet you want whether the online or offline one. The next step is to take note of the specific type of wallet you need and finding the one that suits your needs. Security and ease of use are the two main things to consider when choosing a type of wallet. With online wallets, security is minimal but they are good for daily use while offline wallets are a more secure but not convenient for daily use.
The online wallet which is also called a hot wallet is one that is web-based and has a mobile or web application. You can make use of an online wallet for daily transactions which will require a small amount of bitcoin being stored into it for daily use. This small amount is recommended to reduce the risk in case of hacking. Online wallets are free and they offer good user experience. With an online wallet, third parties are trusted to keep the privacy key safe as well as protect the wallet. You will also need to share this wallet with another person.
Offline wallets require storing the privacy key on paper o on a hard drive. Security of your coins is assured and you can store a large amount of bitcoin here without risk of losing them to hacking. Your funds are secured by you alone as there is no third-party affiliation here. Privacy is also a key feature of this wallet and the hardware where the bitcoin is stored has to be paid for. Offline wallets are best for storing bitcoins while online wallets are best for transacting involving bitcoins.
Things to Take Note of in Different Wallets
There are a number of things to take note of when you are considering a specific wallet and they are as follows.
- The number of cryptocurrencies apart from bitcoin that it supports
- The web address of the online wallet
- The authentication procedures
- The security measures that the wallet employs
- Transparency and Authenticity of the wallet provider
- Is the wallet’s code open source?
- Ease of use of the wallet
- Availability of wallet backup
- Reviews on the wallet
- The design of the offline wallet
- The user interface of the offline wallet
- The price and reputation of the cold wallet
- Whether the wallet supports your country