Just as in stocks many investors buy stock, hold it for certain duration and then sell it to make a profit. The same strategy can be applied to bitcoin. Once you have bought your first bitcoin, you will need bitcoin wallet where you can securely “store” it. You can sell bitcoin at an appropriate time so as to profit from it. There are many bitcoin wallets available. But choosing the best is important since you are investing your money buying bitcoin. Choosing the right wallet is critical since you wish your investment to be secured and easily transferable at a lower fee.
We will discuss what one should keep in mind while making an educated decision to choose the best wallet from among those available in the market. Remember things can change based on the wallet and market conditions.
- Security factor
A secure wallet is of paramount importance and cannot be overlooked. If the wallet of your choice is web wallet then you must always check if the website is https or not. Https is more secured as compared to http. You must also see if the wallet is offering strong and secure logins. Additionally, your wallet should offer two layered security (2FA).
Multi-signature (multisig) option is a preferred method while securing your bitcoin from attackers and theft. In simple words, it should require more than one key (password) to authorize a bitcoin transaction. That is more than one party to spend funds.
Wallet provider should be clear and transparent as how they operate and who they are. One should positively know whether wallet code is open source or not. If it is not an open source code then it is difficult to say how the wallet provider is securing your bitcoin. Open source code can be examined closely and checked for any fatal flaws. The source code should be kept up-to-date by the provider.
- Backup availability
One should investigate the option of backup prior to storing your wallet with bitcoin. The provider should provide a method to backup the wallet and the backup should be encrypted. Is there an easy to use restoration process? It is a vital aspect because in many cases your hard disk may crash or mobile lost or stolen.
For some investors, secrecy is an important factor. For some wallet providers, one has to register prior to using the wallet, and it seeks minimum compulsory registration data (email) to use the wallet. Other go in for know your customer verification process which requires much of your profile information.
- Your control
You should have access to the private keys of bitcoin that is in your wallet. This gives you control over your own bitcoin. Possessing a private key means you can move your bitcoin in and out of the wallet anytime. This also allows you to backup the wallet outside of your wallet service provider.
- User experience
Some wallets are easy to use and some are very complicated to use. Choose one which is easy to use as much as possible, that is it should not require too much experience to get started. Transaction time also varies from wallet to wallet provider. There are wallets which are specifically made for desktops and mobile devices. Featured wallets are for mobile, desktops, web, or banks. There is also hardware wallet available. Many people prefer hardware wallet as it protects your money from hackers and thieves and gives the customer a convenient access.