1 What does a bitcoin wallet need to be classified as “good”?
Choosing the cryptocurrency wallet you are going to use for the first time can be a difficult task, especially if you know little or nothing about how crypto assets work. However, before you embark on the search for the perfect wallet for you, it is important that you take into account 10 basic aspects to consider.
1. How is the security of your bitcoin wallet?
The level of security that a wallet has is one of its key characteristics to know if it is convenient for you to use it or not. That is, it is a point that cannot be taken lightly. For example, if it is a centralized walletit is important to know what are the security protocols used and the company to keep your balance in cryptocurrencies guarded. If the company does not use robust enough escrow systems, you may be exposed to hacking.
On the other hand, it is also important to know if the platform has specialized functions to reinforce the security of your keys on the user side. For example, the mandatory use of two-factor authentication (2FA) to access your wallet balance is a tool that can give your assets greater protection.
In the case of non-custodial wallets, such as hardware wallets or desktop applications, it is essential that when generating a wallet the seed phrase is created from scratch offline. If, for some reason, your seed is exposed to third parties in the process of assembling or creating the wallet, then the security of all your capital will be exposed and a third party could have full access to your money. Be careful with this detail!
2. How easy is it to use your cryptocurrency wallet?
If you are a cryptocurrency neophyte, then one of the features that your first wallet should have is that it be simple to use. A user-friendly interface can make a difference when it comes to sending bitcoins, since not understanding the functions and not paying enough attention can make a mistake and lose our money forever.
When we are selecting our wallet, then it is important to analyze the design of the application to see if we know how to use it. Likewise, it is important to know the amount of funds with which they can work, since there are some companies that only allow partial withdrawal and it is a characteristic that must be taken into account to operate.
Another element that must be taken into account is whether these services have custody. For a person who is starting to take their first steps in the cryptocurrency market, it may be easier to have a third party help them manage their bitcoins. However, if you want to have more independence and financial freedomyou may need to learn how to use non-custodial services that allow you to protect yourself from censorship and have full control over your capital.
3. Is it a multisignature wallet?
If you are interested in using cryptocurrencies to manage family or company finances, then you probably need a multisignature wallet. This option, in short, allows a user to enter more than one password in their wallet when approving a transaction.
In this way, it is much more complex that a third person can access the wallet funds without prior approval of all the owners. The multiple passwords that the wallet will have can be stored on different devices or places in order to increase its security. So this feature is widely used when it comes to protecting cryptocurrency funds from hackers or malicious users.
4. How many functions does your bitcoin wallet have?
When looking for a cryptocurrency wallet, another feature that should be taken into account is that the platform should have multiple additional services.
Although it is not a mandatory element, it is much easier for the user to be able to access services such as cryptocurrency exchange, private transactions or purchase of assets from a bank account; without having to leave the platform.
5. Are you the only one who will manage the private key of your wallet?
One of the most important elements for the security of a cryptocurrency wallet is its private key. It is the cryptographic code that allows the user to sign all the money operations that he performs. That is, it is the element that gives you control over your money.
The private key is generated when creating a wallet and, in some cases, the user is the only one who has access to it. These types of wallets, which give full control of the wallet to its owner, are known as non-custodial applications. The name is due to the fact that no company or person, not even the developers of the app, have the power to enter the wallet.
That you are the only one who has access to your money gives you the responsibility of being the one who takes care of your savings, as well as the right to be the only one who makes decisions about your money. In other words, it turns your wallet into a form of money storage that is resistant to censorship and theft.
6. Is it a hierarchical deterministic (HD) wallet?
When you are going to start using a wallet, do not forget to investigate if it is a hierarchical deterministic wallet, or for its acronym in English an HD wallet. This name can intimidate novice users, but all you have to know is that these words would be indicating that your wallet is more secure and private than others.
HD wallets are those that can have various addresses and keys, without the need to handle multiple passwords or keys. With the creation of a recovery phrase or seed, the user would have at his disposal a master key that allows him to sign different addresses each time he makes a transaction.
What is this for? Well, so that you don’t expose your entire transaction history on the network and make it available to anyone. When you have a wallet, it is generated with both a public key and a private one. The public key is the one that allows you to identify that you have signed a series of transactions, so it serves as a record for you and third parties of all the movements you have made with your funds.
As you can see, it is an element that strengthens transparency. However, it can become a great inconvenience if you are looking for a more private financial alternative. In the event that you are from this group of people, HD wallets allow you to continue benefiting from bitcoin without your entire transaction history being so easy to track, since you would have multiple addresses from a single wallet.
7. Does the cryptocurrency wallet have customer support?
If you are taking your first steps in the cryptocurrency market and you still do not understand very well how to use a wallet, then customer support will be your best ally. We recommend that you check portals and social networks about how good the customer service of the applications you are interested in using is, especially to know how quickly they respond if you have a problem.
This is even more important when we are working with money and, furthermore, with a market as volatile as that of cryptocurrencies. When the price of an asset can fluctuate in a matter of minutes, it is essential that companies respond without delay to resolve any eventuality.
8. Does the wallet have backup copies?
Cryptocurrency wallets, after all, are applications that allow us to access our money. Due to this, it is key that these devices have the possibility of making backup copies with which it is possible to access the funds in cryptocurrencies, even if your computer was damaged or you lost your cell phone where you had downloaded the app.
One point to note is that the copies should be automatically encrypted by the application. Also, the recovery process should not be difficult to perform, the fewer steps the better. For example, by means of a seed phrase, we can re-download the app on another device and import the wallet using the recovery words.
9. Is it a trustworthy bitcoin wallet?
The maxim of the cryptocurrency ecosystem is: “Verify, don’t trust”. And although this is advice that can get you out of a lot of trouble, the truth is that in one way or another we always place trust in things. The strategy is to inform ourselves, test and compare in order to be sure that we are placing our trust in something good.
That is why, if you want to start using a specific wallet, We recommend that you browse different blogs or internet forums to find the opinions of experts or users in the matter. In CriptoNoticias we have multiple articles where we test the most demanded cryptocurrency tools by the Spanish-speaking public so that you already have an idea of how it works before you start using it.
10. What operating system is your wallet compatible with?
In a market as wide as that of cryptocurrency wallets, there are applications that adapt to the needs of each user, this is the case of operating systems. Not all apps are available for any type of computer or cell phone, so you will have to look for those wallets that offer support for your smart devices.
Generally, this information is available on the websites of the wallets, where you can check if the wallet of your choice can be used on your computer without having to fall for a scam or malicious link. In this sense, we recommend that you always download your wallets from the official portals of the company, since there are hackers on the Internet who upload their malicious applications to online stores.