Bitcoin wallets are all unique. Selecting the right ones pays off. Choosing the wrong ones can cost you tons of money.
What do you look for when choosing a Bitcoin wallet? The following advice might help:
Take a look at all the features
Discover all the capabilities and limitations of your prospective hot and/or cold storage wallet. By doing so, you can assess its utility, security, flexibility, and reliability.
If you are looking for a non-custodial Bitcoin cold wallet, you should look for one that meets the following criteria:
- Exchange functionality is built-in
- Transactions are bundled
- Fees for transactions are adjusted
- Unconfirmed transactions can be replaced with higher fees
- Air gapping is possible
- Supports seed phrases, passphrases, and two-factor authentication
Custodial Bitcoin wallets should be offered by centralized entities that take security seriously and charge reasonable fees.
Dig Up Past Scandals
The crypto space would see all brands put their best foot forward. There have been plenty of negative press stories about even the most established and trusted ones.
A data breach affected the creator of one of the best digital wallets on the market. No private keys were lost by the company. One million email addresses were exposed, however.
There is no perfect company or technology. Be sure to check your prospective Bitcoin wallet’s reported shortcomings and fixes before depositing funds.
Be Aware of The Risks
Bitcoin wallets cannot be 100% risk-free.
The least secure wallets are those hosted on desktops or in the cloud. Software wallets for mobile devices are decent. The most robust wallets are hardware wallets.
If you keep your private keys in an air-gapped Bitcoin cold storage wallet, you can still lose them.
It is generally advisable not to use a Bitcoin wallet that is too complex for you to maximize its security features.
Physical dangers should also be considered as well as cyber threats. Hand written backups and hardware wallets can be damaged by moisture, fire, and wildlife.
Your funds may also be at risk if you discuss your crypto investments in public.
Last but not least, failing to tell someone you trust about your holdings is probably the worst mistake you can make. It is also crucial to inform this individual on how to access or recover your funds.
Private keys that are inaccessible can remain untouched if something happens to you. Your heirs may not be able to inherit Bitcoin and/or altcoins.
Bringing it all together
There are distinct advantages to hot and cold cryptocurrency wallets. Despite their strengths, they have some weaknesses as well.
A key to balancing the positives and negatives is to capitalize on the positives of each.
Manage your funds with no stress by finding the right balance between both wallets.
