A wallet is one of the most used applications when you have bitcoin savings. Ultimately, these devices serve as storage for the private and public keys of an address on the network. The owner of said address, through the wallet, can access the balance in registered cryptocurrencies and spend it as best suits him.
Due to the importance of wallets for interaction with digital money, it is a first necessity for users to know what type of wallet is best for them and how they can choose one that suits their abilities.
With the aim of helping them get the wallet that is best for them, in this article we compile some of the infallible questions that you have to ask yourself when choosing a bitcoin wallet.
Are you the only one who will manage the private key of your wallet?
One of the most important elements for the security of a cryptocurrency wallet is its private key. This is the cryptographic code that allows the user to sign all the money operations he performs. That is, it is the element that gives you control over your money.
Therefore, this is a question that we have to ask ourselves yes or yes when choosing the wallet that best suits us: do I want to have a wallet with custody or not? The answer will depend on how open you are to the idea of managing your money without help from anyone or delegating that responsibility to a third party.
Why does a private key matter?
The private key is generated when a wallet is created and, in some cases, the user is the only one who has access to it. This type of wallet, which gives full control of the wallet to its owner, is known as non-custodial applications. The name is due to the fact that no company or person, not even the developers of the app, have the power to enter the wallet.
Undoubtedly, a self-custody wallet has its advantages in terms of security. Being the only one who has access to your money gives you the responsibility of being the one who cares for your savings, as well as the right to be the only one who makes decisions about your money. In other words, turn your wallet into a form of money storage that is resistant to censorship and theft .
Cryptocurrency wallets, after all, are applications that allow us to access our money. It is, because of this, that it is essential that these devices have the possibility of making backup copies with which it is possible to access the funds in cryptocurrencies, even if your computer was damaged or you lost your cell phone where you had downloaded the app.
One point to note is that the copies should be automatically encrypted by the application. Also, the recovery process shouldn’t be difficult to perform, the fewer steps the better . For example, through a seed phrase, we can redownload the app on another device and import the wallet using the recovery words.
La lavva coughed up bitcoins
A seed phrase is a set of between 12 and 24 words that legibly represent the private key of a Bitcoin network address. It is, in a few words, like a decoding of the random string of numbers and letters that represents access to your money on the network.
Some wallets that offer self-custody services are: Electrum, Bitpay, Trust Wallet and Wasabi.
However, if you are one of those who still believes in the “old-fashioned” process and prefers that a company insure all of your money, then you should investigate how the security systems of the wallet you want to use work.
How is the security of your bitcoin wallet?
As we have said before, the level of security that a wallet has is one of its key characteristics to know if it is convenient for you to use it or not. Since it is the element that will keep your capital safe, it is a point that cannot be taken lightly, especially if you plan to delegate the protection of your assets to the administration of a third party.
If it is a custodial wallet, also known as centralized because access to cryptocurrencies is shared by the user and the company, it is important to know what security protocols are used to keep the private keys of these wallets safe. .
In general, these types of applications keep their users’ cryptocurrencies in a series of addresses or physical wallets to which they have full access. In this sense, if the company does not take measures to protect its servers from possible hackers or loses the hardware devices where the money of its clients is kept, it is very likely that your capital is in danger.
Always investigate, do not trust.
To avoid a bad time, it is essential that all users of a wallet know how their money is managed and investigate all the details of how it is stored on the official website. One of the advantages of having a wallet that offers custody is that you can leave your money in the hands of someone more experienced at the cybersecurity level. However, this can also be a double-edged knife: having to trust someone else exposes you to their mistakes and possible bad intentions.
On the other hand, it is also important to know if the platform has specialized functions to reinforce the security of your keys on the user’s side. For example, the mandatory use of double factor authentication (2FA) to enter the balance of your wallet is a tool that can give your assets greater protection.
Among the best-known centralized applications, whose security has maintained good standards, are: BitGo, which offers services to companies and institutional investors; or Coinbase Custody, a service offered by the American exchange of the same name.
In the case of non-custodial wallets, such as hardware wallets or desktop applications, it is essential that when generating a wallet the seed phrase is created from scratch offline. If, for any reason, your seed is exposed to third parties in the process of assembling or creating the wallet, then the security of all your capital will be exposed and someone else could have full access to your money. Be careful with this detail!
Also, since it is a service that you will provide to yourself, you have to be the one who takes the measures to insure your assets. For example, not sharing your seed phrase with third parties on the Internet or in person is one of the main tips to keep in mind. Also, you should save your seed phrase in a safe place where you have access and cannot lose it , because if you forget it you could have problems accessing your wallet.
How simple is it to use your cryptocurrency wallet?
If you are a cryptocurrency neophyte, then one of the features that your first wallet should have is that it is simple to use. A user-friendly interface can make a difference when it comes to sending bitcoins, since if we don’t understand the functions and don’t pay enough attention, we can make a mistake and lose our money forever.
When we are selecting our wallet, then it is important to analyze the design of the application to see if we know how to use it. Likewise, it is important to know the amount of funds with which they can work, since there are some companies that only allow partial withdrawal and it is a characteristic that must be taken into account to operate.
Less is more when you take your first steps
If you are about to download a wallet with multiple features and the ability to customize your transactions, then you should think twice. Although these types of applications are usually highly convenient when it comes to sending or receiving BTC, they can also be cumbersome and difficult to understand for a novice user.
The focus should be that when you browse the wallet you can get all its functions quickly and without confusion, because a mistake can expose your money and even make you lose it forever. Some wallets offer their users brief tutorials when they download the application for the first time, in this way, you will know where to go to carry out a certain service.
If you are looking for simplicity, one of the wallets on the market with the most intuitive designs are Bitpay and Electrum, both of which are easy to navigate.
How many features does your bitcoin wallet have?
On the contrary, if you already have some basic knowledge about cryptocurrency wallets and are looking for an application that meets all your wishes, then a multi-service wallet is probably the most suitable for you.
It is not a mandatory element, but the fact that some wallets offer their users additional functions to those of managing funds, can facilitate the interaction with your capital . For example, if you want to have a large cryptocurrency portfolio and are interested in trading between assets in a hurry, you will probably get more out of an application that incorporates such a service.
Other users may find it useful that your wallet allows you to make more private transactions, buy assets with fiat money from an affiliated bank or credit card, or that it allows you to modify the commission to be paid for each transaction.
Multiple options for various users
Every user has their ideal wallet. Before you download or buy one of these cryptocurrency wallets, you should ask yourself: What services do I need to make my transactions as easy as possible? Some will say that they want to store more than one cryptocurrency in one place, so they will have to look for a multi-support wallet. Others, on the contrary, will be looking to gain more privacy in their transactions, so those applications that have mixer or Coinjoin services will be convenient for them.
If you are interested in using cryptocurrencies to manage your family or business finances, then you may also need a wallet with additional multi-signature features. This option, in short, allows a user to enter more than one password in their wallet when approving a transaction .
In this way, it is much more complex for a third person to access the funds in the wallet without the prior approval of all the owners. The multiple passwords that the wallet will have can be saved in different devices or places with the aim of increasing its security. So this feature is widely used when it comes to protecting cryptocurrency funds from hackers or malicious users.
If you want a wallet that allows you to store multiple cryptocurrencies, Exodus could be a good option. On the contrary, if what you are looking for is security and privacy, applications such as Wasabi Wallet or Samurai Wallet are the most outstanding on the market.
It is not exactly the first question that comes to mind when choosing a wallet, however, it can be crucial when it comes to daily trading with bitcoin. Every time we make a capital transfer in the network of a cryptocurrency, we must pay a commission (also known as fees in English) to the miners in order to give priority to our operation and finance the activities of all those who process transactions.
If we do not have control over the commission that we are going to pay, we could end up disbursing a large sum of money to have to send a few bitcoins . Why is that? The explanation is long, so we have a specialized article in CriptoNoticias where we delve into the subject, but broadly speaking it is due to the fact that when there are a large number of transactions to be registered in the network, congestion can be generated. In this sense, if we want to be the first to transfer our money, we could end up paying large sums because other users are also trying to get miners to give priority to their transactions.
The fee is a red flag for miners
In addition to serving as an economic incentive, a fee is used by users to indirectly communicate to miners how urgently they want to send a payment. If the transaction is highly urgent, a high fee may make miners give it priority. If your payment does not have to be processed quickly, then you can set up a cheap commission.
Some wallets allow you to manually configure how much you want to pay the miners to process your transaction, as well as calculate an estimate of what you should pay if your payment is urgent. However, not all applications have this option, so it is essential to find out if this service is provided by the wallet in which we are interested.
A few wallets that give you full control over the commissions to pay are Bitcoin Core, which is one of the first on the market, Electrum, which we have already mentioned before because it is self-custody, and Specter, which is compatible with Linux, Mac and Windows operating systems. .
What operating system is your wallet compatible with?
In a market as broad as that of cryptocurrency wallets, there are applications that adapt to the needs of each user, this is the case of operating systems. Not all apps are available for every type of computer or cell phone, so you will have to look for those wallets that offer support for your smart devices.
In general, this information is available on the web pages of the wallets, where you can check if the wallet of your choice can be used on your computer without having to fall for a scam or malicious link.
Beware of scammers and hackers!
When you are going to download a wallet on your phone or computer, we recommend looking for the links directly from the official website of the company, since there are hackers on the Internet who upload malicious applications to online stores. Also, if you want to buy a hardware wallet, buy it only in the official store of the company.
If you have an Android cell phone, some of the wallets you can download are Eclair, Edge, Bitpay, and Mycelium. If, on the other hand, you are an Apple user, you can also try Bitpay or Edge, but also applications such as Bither and Unstoppable.
Is it a reliable bitcoin wallet?
The maxim of the cryptocurrency ecosystem is: “verify, do not trust”. And although this is advice that can get you out of a lot of trouble, the truth is that in one way or another we always place trust in things. The strategy is to inform us, test and compare in order to be sure that we are placing our trust in something good.
Check social networks
If any wallet does not work well or has defrauded its customers, you will surely find comments on social networks denouncing this irregularity. On the contrary, if the wallet is up to the users, there will be many people who recommend its use.
