How to choose a crypto wallet

By Sophie Ogden - 30/10/2018

Cryptocurrency, Wallet, Bitcoin

There are several factors you need to take into account when it comes to Cryptocurrency wallets, the main issue here is security. You need the wallet to be safe, secure and hacker-proof. A crypto wallet is a piece of software that enables you to send and receive cryptocurrencies, such as Bitcoin.

Some things to take into account when choosing a company to use:

Cost: Is it free? What are the drawbacks of using this wallet?

Security: Does the company have a track record of excellent security?

Mobility: Is it easy to keep and difficult to lose? Is it accessible anytime, anywhere?

User-friendliness: Is the wallet UI intuitively designed? Can I store a range of altcoins?

Convenience: Am I able to make a fast purchase when the time calls for it?

How does a crypto wallet work?

Wallets are used to store something known as private keys: long hexadecimal codes known only to you and your wallet. They must match with a public key so you can spend your money.

Wallets come in many forms. They can be stored on hardware which is occasionally connected to the web to perform transactions (some people keep them in bank vaults the rest of the time) – you can even write the keys down on a piece of paper, which is one method of “cold storage.”

Hosted wallets are similar to traditional banking apps. You can access your balance on multiple devices, and your funds aren’t gone forever if you lose your phone or forget your password.

Wallets can be used to store multiple tokens and coins at once – however, most wallets will only support a limited number of cryptocurrencies.

What about hackers?

The most popular type of fraud is phishing. Hackers may send you a fake email on behalf of your wallet service, containing a fake URL, which may differ by one or several letters from the real URL of your wallet service. Hackers may even redirect the right URL to fake URL when you’re entering the online wallet.

Do not keep your keys in an email, Google Drive or Dropbox, or any notes app in your smartphone. These are the first places hackers usually try to get in. In order to save your coins, you can relocate keys to any less obvious storage. You may record it to a USB stick, or just write it down and keep it in your drawer - you obviously shouldn’t expose it to anyone else.

What is the best security for a wallet?

Cold, Hot or warm wallets

All wallets differ by online and offline types, and the security mechanisms differ respectively.

The majority of existing online cloud wallets, or so-called ‘hot’ wallets, use two-factor authentication, in case hackers try to enter your email. ‘Warm’ wallets, the ones that you install as a software to your computer, or as an app to your smartphone, use 12-word backup phrase and pin-codes. ‘Cold’ wallets are hardware ones, that are located at a USB stick or a special gadget — it seems like the most secure way so far. There are many other types of wallets, but for now, let's not confuse things. 

Transaction speed

But how long do the transactions take and how long will it take to get the money into the wallet? Well, the standard for Bitcoin is about six confirmations before a transfer is complete, and this process can take about an hour depending on the network activity. On average, it takes about 10 minutes to find each block. The average block time can actually be slightly shorter or longer depending on if the total hash power of the Bitcoin network is growing or shrinking. Ignoring this detail though, this is why 6 confirmations take about 1 hour on average.

Some examples of cryptocurrency wallets include Uphold, Ledger, Trezor and Coinbase.

Our advice would be to look around at other wallets and it all it all depends on what Cryptocurrency you currently hold. Look at the security, the anonymity, the user experience and the reputation of the wallet. You wouldn’t buy a car without looking at reviews and testing it, right? Same for a wallet - ask your friends about their experiences and make sure you choose the right one for you.

Our brand new application BE.CHAT will also include a Cryptocurrency wallet that will store your HoT coins and other cryptocurrencies (coming at a later date).

 

What wallet do you use? And why? Let us know!


 

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