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Choosing a secure bitcoin wallet is essential for keeping your valuable currency safe, so here is some important information to help you make the right decision.
Bitcoin is big news at the moment and is an even bigger target for thieves and hackers. Because it is anonymous currency, if your bitcoin are stolen you are highly unlikely to ever be able to recover them. So, it’s important to keep your bitcoin protected in a secure bitcoin wallet. First of all, it’s important to note that you’re not actually storing your bitcoin. What you are guarding is your private key to access and trade them. There aren’t many bitcoin wallets on the market yet, but there are still enough to provide a wide range of choices. Choosing a secure bitcoin wallet is vital, so here is some important information to help you make the right decision.
Online Bitcoin Wallets
Also known as ‘hot’ wallets, online bitcoin wallets are connected to the internet. They are frequently cloud-based, surrounded by powerful security such as firewalls and high level encryption. The advantage is that they are always accessible wherever you are; the disadvantage, of course, is that they are vulnerable to hackers and cyberthieves.
There have been many sad cases of people discovering that their bitcoin simply disappeared overnight, either because the bitcoin wallet service was hacked or because they fell victim to a scam that stole their login details. Phishing scams for bitcoin keys are increasingly sophisticated and even people who swore they’d never be taken in have been burned. However, if you prefer to use an online wallet there are many to choose from with very strong and reliable security features. Coinbase is one hot wallet that has a lot of fans. It’s extremely easy to use and very secure, since your keys aren’t actually stored on their servers so they are not as vulnerable to hacking. Coinbase emphasizes that it doesn’t have any access to your private key itself, since it is securely encrypted and only you hold the passcode to unscramble it. Coinbase features mandatory backup so there’s also no risk of losing your bitcoin if your device is reset.
Mobile wallets are generally also considered to be hot wallets, since they are connected to the internet, but they can only be accessed via the app on your phone. Blockchain has a mobile app for both iOS and Android devices which also serves as a secure bitcoin payment channel that doesn’t touch the main blockchain. The app is highly protected by a passcode so that even if you lose your phone your bitcoin will stay safe.
Offline Wallets
Because the internet touches just about everyone and everything, many bitcoin owners are understandably wary of storing their bitcoin in any wallet that connects to the internet. If your bitcoin wallet doesn’t have any internet connection, it can’t be hacked. It’s dangerous to assume that any bitcoin wallet is 100% unbreakable, but it’s certainly true that to date no hardware bitcoin wallet has been hacked or infected with computer viruses.
Offline, or cold, bitcoin wallets come in various forms. There are small devices like a USB key or a portable hard drive which connect to your computer for you to transfer in the private key. They carry further protection too, requiring a passcode to access your key and using powerful encryption facilities. You can keep your bitcoin wallet in a locksafe, on a string around your neck, hidden under the bed or anywhere that you consider safe. Trezor is a popular Czech-Republic-based bitcoin wallet company that provides cold bitcoin wallets. It’s easy to use and very secure since your bitcoin will be kept in a totally separate offline environment. Trezor is compatible with Windows, Mac, and Linux and is based on open source software. This means that the software is constantly being developed and improved, which adds to the safety of your bitcoin.
Another offline option is a paper wallet. A paper wallet is simply a printout of your bitcoin keys which you can again keep in a safe place. What matters is that you use a secure service to generate that printout so that traces of it can’t be found online. Electrum is a good and secure source for paper wallets. It provides you with full control over your keys while also serving as an SPV wallet that connects to a trusted full node to carry out transactions.
Compatibility
Because they are designed for the digital age, most bitcoin wallets are made to be compatible with many different operating systems and devices. That said, there are mobile wallets which are designed only for Android or just for iOS, and not every Bitcoin wallet is transferable between Mac, Windows and Linux systems. Copay is widely acclaimed for being compatible with almost all platforms and devices. It supports Windows, Mac, and Linux as well as providing apps for iOS, Android, Chrome OS, and Windows Mobile devices. Copay is also a good choice for business use, because it can support multiple users, crypto-currencies, and wallets within just the one account. Copay uses open source software and bitcoin protocol for transactions.
Ease of Use
It’s always going to be better to have a bitcoin wallet that has an intuitive, easy to use, and straightforward interface so that you won’t face confusion or chaos. Some bitcoin wallets can be clunky, awkward to manipulate, and confusing to use. Breadwallet is a straightforward, user friendly hot wallet that’s available only as a mobile app for iOS and Android. Bitcoin Wallet is another example of a simple, secure bitcoin wallet with an intuitive user interface and clear setup. One last choice for anyone who’s a little scared of getting things wrong is Multibit, which has a neat, clean layout with plenty of options so that you can easily protect your bitcoin.
Versatility
We might be talking about bitcoin but there are many types of crypto-currency out there today and they all need to be stored securely. Given that you already have a lot of different platforms and passwords to remember, it can be useful to have a bitcoin wallet which can also store other cryptocurrencies like Ethereum or Litecoin. Coinbase is the favorite when it comes to handling multiple crypto-currencies. As well as bitcoin and Bitcoin Cash, it can hold Ethereum, Litecoin, and Ethereum Classic.
On the other hand, many bitcoin experts recommend that you don’t keep all your eggs in one basket. It’s advisable to keep different crypto-currencies in separate wallets and not to overload any one wallet, since there is no guarantee that any bitcoin wallet is 100% safe. Mycelium is a very reliable and secure wallet for bitcoin only, which means that it’s focused on the best ways to secure just this one currency. It’s a hardware wallet so it’s not connected to the internet, but it does regularly remind you to backup your key so that your bitcoin aren’t lost. Mycelium also uses open source software for maximum developer support.
Price
Although your bitcoin can be worth a huge amount of money, you still don’t want to waste any of it on an overpriced wallet to hold them. Bitcoin wallets come at every price bracket, from free to use to several hundred dollars. Ledger Nano is one of the lower-priced offline bitcoin wallets. It’s small and secure and as an added advantage it hooks into Mycelium too. Ledger Nano works through a Chrome extension and is compatible with Windows, Linux, and Mac operating systems. Your bitcoin are secured using a microchip that’s locked with a PIN code, while all transactions are verified by anti-malware second-factor authentication. Ledger also promises to be able to restore losses if you misplace your wallet.
Keep your Bitcoin Secure
Whether you're looking to protect just a few bitcoin or several wallets of crypto-currencies, you can find a secure wallet to safeguard them. Online and offline, mobile wallet apps and paper wallets are among the options that can suit your needs.
