The road to becoming a savvy crypto investor starts with engaging with the right platforms. Before you deposit a dime, you must pick a suitable crypto exchange because that’s where everything starts. However, the second-biggest decision you’ll need to make is choosing a Bitcoin wallet.
There are many options available these days, and each comes with its own set of advantages and disadvantages. But what works for one Bitcoin investor might not work for the other.
When choosing Bitcoin wallets, it’s crucial to remember that there are two main categories – software and hardware wallets. We’ll tell you everything you should know about both.
Undoubtedly, the most popular choice among Bitcoin users is the software wallets. To access a software wallet, you need internet connectivity and a private key. But not all software wallets are the same. There are three subcategories you can consider.
Online Web Wallets
Some might argue that Bitcoin web wallets aren’t secure enough. Regardless, they’re the top choice for many Bitcoin investors and traders. These wallets are free, typically have a user-friendly interface, and enable fast transactions.
These wallets store data and make payments via cloud technology. The most reliable web wallets are also open-source and non-custodial. That means that the Bitcoin wallet user is the only one who has full access to their funds. The opposite of that would be custodial crypto wallets.
These are usually offered by large crypto exchange platforms that consolidate these services. But a custodial wallet means that a company also has access to your cryptocurrency.
While that has some benefits, like better protection, not every Bitcoin investor approves of that solution. Online Bitcoin wallets can sometimes manage more than one digital currency, but some solely focus on one well-established token.
As the name implies, this type of software wallet is available on your mobile device. Many crypto wallets focus on mobile users, and the selection of wallets is pretty good.
Mobile wallets are also the preferred choice of those who want to pay with Bitcoin for items in physical stores or frequently use Bitcoin ATMs.
Using a mobile Bitcoin wallet is super convenient if you’re on the go but may not be a fantastic idea if you’re prone to losing your phone. Also, it’s important to make sure your phone doesn’t contract viruses or malware.
Investors who mainly use their PC or laptop for Bitcoin trading and other activities can benefit from a desktop crypto wallet. All you need to do is download the software and follow the installation instructions.
One of the perks of using a desktop wallet is that you can essentially turn it into cold storage when you’re offline. If you have a computer used mainly for Bitcoin trading, disconnecting your Wi-Fi while you’re away from the device adds another layer of protection.
The downside of desktop wallets is that they’re often not that mobile. Also, if your computer breaks down or gets lost, you lose your cryptocurrency.
For some Bitcoin investors, a hardware wallet is the only way to go. This type of Bitcoin wallet is one of the safest ways to store your cryptocurrency. These devices can resemble a USB flash drive, have a credit card shape, or even look like a car key.
More sophisticated hardware wallets have LED displays and multiple features. When you connect the hardware wallet to the computer, it usually directs you to a web-based interface or a designated app created by the company.
Aside from being a secure way to store your crypto funds, hardware wallets usually support many other cryptocurrencies other than Bitcoin.
For crypto investors who choose HODL (Hold On For Dear Life) investment strategy, storing more significant amounts of digital currency in hardware wallets is preferred.
There are some downsides too. First, these wallets are not free, and the price for some of them can be north of $100. Also, they’re not the best solution for beginners as they can be challenging to navigate.
Choosing a Bitcoin Wallet That Works for You
With cryptocurrency, the learning curve can be steep. But if you get those initial steps right, your crypto journey will be a much smoother ride.
Choosing a reliable Bitcoin wallet that checks all your boxes in terms of features can spare you a lot of issues down the road. Keep in mind that investing in cryptocurrency is risky enough without worrying whether your money will be safely stored or not.
Also, if you’re using a software wallet, avoid public Wi-Fi and don’t click on suspicious links. If you have a hardware wallet, keep the device somewhere safe.