Important Factors to Consider when Choosing a Bitcoin Wallet
Bitcoin acts as the starting point for many people venturing into the crypto industry, and rightly so. The coin was the pioneer, and it provides stability that most other coins can’t. But as you get started on your crypto journey, there are a few basics you need to cover before you can start trading and worrying about fluctuations in the price of Bitcoin.
The first? Creating a Bitcoin wallet. Just as your bank account, this wallet is what will allow you to receive, store, and send Bitcoin. But with the many options available today, how do you choose the right one?
Below, we have several of the factors you should consider.
The Reputation of the Wallet
Just as you would ask and consider other people’s opinions when choosing a bank, the same should apply when it comes to choosing your Bitcoin wallet. What’s its reputation among actual users? Some of the things you can consider in this analysis include its track record, reliability, commitment to security, and general user experience.
To get these opinions, you can look at reviews, testimonials, and endorsements from actual users and reputable sources. Of course, note the key positives, as well as the negative feedback or any unresolved security incidents that may raise red flags. Also, factor in the longevity of the Bitcoin wallet provider.
The Security Offered
Heard of people losing their hard-earned money from their wallet? We’ll this is quite easy, as crypto transactions take place online. And as a result, users are susceptible to security threats such as hacking, malware, and phishing. To avoid being a victim, ensure that your wallet provides robust security features.
Good thing, most wallets today offer AES 256 to protect private keys. But besides that, you should also consider features such as 2-factor authentication (2FA), a multi-signature (multi-sig) option, backup and recovery, and an offline storage option. 2FA is a superb starting point as it offers protection by requiring an extra verification step, such as a unique code sent to your mobile device.
Associated Fees
Bitcoin transactions usually attract a fee, which is paid to public blockchain validators or miners. However, some of the best wallets allow you to customize the amount of fee you pay. This is usually in a bargain with the speed of the transaction, and it can be a great way of saving if speed is not critical in a particular transaction. Most wallets that allow fee customization let you choose between fast, medium, and slow.
Besides transaction fees, note that some wallets offer premium features for a fee. Go through these features, assess whether you need them, and compare them with others that are completely free or also offer premium features.
Backup & Recovery Features
Due to the design nature of cryptocurrency, you can easily and irretrievably lose all your crypto assets if you can’t access your wallet. This can happen if you lose your device or have a hardware failure. In such cases, backups serve as a lifeline, allowing users to restore their wallets and regain access. Backup and recovery are usually provided through seed phrases, which are simply recovery phrases, and secure file exports. Besides the features, ensure that you back up your wallet regularly.
Additional Features
All Bitcoin wallets will, of course, let you receive, store, and send Bitcoin. And for one to be among the few you are considering, it also needs to offer robust security. However, there are other extra features that can enhance your whole experience. These include integration with crypto exchanges, multicurrency support, multi-signature, compatibility with multiple operating systems, and integration with hardware wallets. Of course, ensure you find the right balance between functionality, security, and convenience to choose a wallet that meets your needs and enables you to maximize your Bitcoin journey.
