Cryptocurrency traders expanding their portfolio into bitcoin and beyond need a safe wallet. There is no loophole or workaround; a wallet is the best method for securely storing or accessing your funds and assets. There are, however, many options to sift through so how do you pick the best one for your profile? It has to be a thought-through decision, but it is easy to make once you have the facts. With that in mind, here are five tips for choosing a bitcoin wallet.
Why Do You Need a Crypto Wallet Anyway?
The importance of a bitcoin wallet becomes more obvious after you make your first successful trade. Not only are they a useful tool for storing bitcoin on the blockchain, but they are also often highly secure, make transactions more direct and straightforward, and complement any portfolio too.
What to Look for — Hot vs. Cold Wallets
There are a few types of wallets to consider, mainly hot wallets and cold ones.
Hot Wallets Main Features
Hot wallets are a popular choice for traders. The key features are the following:
- An online wallet that remains live on the web at all times
- Option for public keys and private ones
- Capable of storing large amounts of money or assets within
Benefits and Drawbacks
The main benefit of hot wallets is that they are versatile and can handle large transactions. The only drawback worth mentioning is that they are vulnerable because they exist in the online world. Hackers are more likely to infiltrate because of this reason, which puts your investments at risk of being stolen.
Cold Wallets Main Features
Cold wallets are perhaps the better choice for large asset storage. Here are the key features to browse through.
- No internet connection involved
- Higher levels of protection
- Most commonly, these are stored on a USB pen or similar
Benefits and Drawbacks
The key advantage of cold wallets is the additional protection they offer through remaining offline. To steal your crypto, someone would have to physically remove it from you and decipher your pass key too. Yet, the downside of them not being actively connected means that transactions may be slower, as you have to find a network to perform a trade.
The main concern for any bitcoiner is that their funds are going to be safe. Always thoroughly read the security details before jumping into a platform.
Is the wallet interface easy to get to grips with? If so, this is a good sign. You need something that is easy to use so that your investment doesn’t go awry. There is no room for mistakes when your money is the stake.
Updates and Developments
Find wallet software that is in a constant state of development. There should be regular updates so that the function reflects the market, takes into account ongoing security risks, and is generally glitch-free.
Whether you pick hot or cold, there is value in both types. Your bitcoin needs to be safe and stored correctly so the asset retains value and is not vulnerable to malware or theft.