How to Choose the Best Bitcoin Wallet?
Newbies in crypto-World are fascinated by the profits in this e-World. Buying a Bitcoin or other e-currency is not a tough task. You just need to pay some amount of your fiat money via your credit cards to bitcoin exchange and Bingo!!! Now you are a cryptocurrency owner. The biggest challenge which comes to play here is regarding the storage of these coins. All thanks to e-wallets or known as Bitcoin wallets which make the storage easy.
Working of wallet simplified
A bitcoin wallet essentially works just like your real world wallet. It is used to send and receive coins across the globe. A bitcoin wallet abstracts all the technical details of the Blockchain and provides the user a very simple interface to operate the transactions. There are essentially tow keys: Public and private key. A public Key (just like your email address) is used to receive bitcoins from other users. It generates your address and shares with the sender. The address generally starts with “1” and is a combination of 25-26 alpha numeric chars. For example: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2
A private key (works just like a password) is used to send money to others. Without your private key, your wallet gets freezed and no longer operative.
Considerations to be made while choosing a Bitcoin wallet
Here are few tips which will guide you in taking a well informed decision regarding choosing your Bitcoin wallet. It is recommended that the user must go for a market analysis or consult a cryptocurrency expert before making any decision. As the crypto market is volatile and hence it’s better that you do your homework properly.
1. Security certificates
Before choosing any web wallet makes sure that the website is fully secured. You can check this by looking at the URLs. If the URL is having HTTPS or has a backing from Cloudflare protection enabled, go ahead with the wallet. Also, a green padlock present before the URL is enough to prove that website is secure.
The wallet must support 2FA (two facto authentication). Here, apart from the usual login, another key (such as OTP) is sent to the owner which has to be shown in order to make a successful login attempt. The wallet should also have additional layers of security in order to block the malicious attacks.
3. Cold Storage
Keeping all the coins in the wallet is not considered safe as there is always a threat of hackers attempting to steal them. The wallet should have a provision for keeping the funds over cold storage which means storing over another Blockchain or cloud. This ensures the security of your funds.
4. Control over Private key
Unable to access your private key in the wallet, means you no longer have a control over your wallet. Not having control over private key restricts your transactions as you cannot send and receive as per your wish. It’s better to opt for another wallet.
5. Confidentiality and Anonymity
Well, it totally depends on your choice regarding the level of anonymity. Some Wallets prefer KYC/AML screening before activation of account while some take minimal details (such as only email) for account activation.
It is always better to use wallets which use Hierarchical Deterministic (HD) approach, which means for every new transaction a new address is generated. Some of the most popular bitcoin wallets are Electrum, Trezor, coinbase etc.