Even if Bitcoin (BTC) has fallen behind blockchains supporting smart contracts like Ethereum, developers are working on an upgrade called Taro that will transform Bitcoin into a multi-asset network on which users can mint NFTs or stablecoins. If you buy Bitcoin, it may be because you believe long-term returns are worth short-term volatility. Don’t take anyone’s advice about what will happen with the cryptocurrency, so do your due diligence and come to a conclusion yourself. Most importantly, ignore the day-to-day and month-to-month fluctuations in the BTC price and technical indicators. Rather than trying to time the market, you should better spend time in the market.
In the HODL strategy, you focus more on holding Bitcoin in your wallet. In case you didn’t know, cryptocurrency wallets have existed since Bitcoin’s emergence and serve purposes other than HODLing the coins. You can control your private keys, send and receive BTC to and from anywhere around the globe, and shop at stores that accept Bitcoin. There are many good options in 2023, meaning choosing the right one can be hard, especially if you’re new to cryptocurrency. Keep on reading to discover what’s the best wallet to get.
What Are Bitcoin Wallets All About?
A Bitcoin wallet is a digital wallet where you can store your tokens. It also allows access to your Bitcoin account, so you can receive coins to your wallet immediately, store them safely, and use them as you, please. A Bitcoin wallet isn’t comparable to a normal wallet because your funds live on the blockchain, and the deposited cryptocurrency can only be accessed with unique keys. In other words, a Bitcoin wallet is a program that stores your public and private keys, allowing you to monitor your balance and make transactions, all from one place. A Bitcoin wallet has an address, just like an inbox has an email address.
Let’s Dive Deeper into The Two Types of Bitcoin Wallets
There are two ways to interface and interact with your Bitcoin account:
- Browser wallet. A browser wallet is a web app that allows you to interact with your Bitcoin account directly in the browser. MetaMask, for example, is compatible with browsers like Chrome, Brave, etc. Since you require an active Internet connection, it’s a hot wallet. You can interact with DEXs, NFTs, and dApps.
- Mobile app. A mobile app makes your cryptocurrency holdings accessible from anywhere, so you can make transactions on the go. There’s the risk that your phone or tablet will be stolen, so it’s recommended to have a PIN code lock just in case. If there’s a limit to how much BTC you can hold in your wallet, don’t worry because you can transfer more tokens from your PC.
Storing Your Bitcoin Is One Wallet Is a Bad Idea
Considering the money involved, it’s a good idea to diversify your risk by using multiple Bitcoin wallets. If you lose one private key, you’ll still have access to all your other wallets, so your funds won’t be lost; when you forget the code, there’s nothing you can do anymore. More often than not, people hold multiple Bitcoin wallets to increase security, as smaller transactions are less likely to draw attention. Store larger holdings in a secure place, such as an offline wallet, to avoid scrutiny. You can keep a limited number of coins in your online wallet for necessary purchases.
What Are the Most Important Features to Consider?
Select a Bitcoin wallet with a good track record to minimize the possibility of a security flaw. Cryptocurrency traders, and their wallets, are attractive targets to hackers, so do everything you can to protect yourself. Here are other factors to look for in a Bitcoin wallet other than security:
- Ease of use & comfort with the wallet. See how easily you can use the wallet to manage your balance. It should be like any other app you use– in other words; it shouldn’t challenge you to break out of your comfort zone. Important points to consider are the login process, access to Bitcoin account information, and overall ease of use for managing your account.
- Real-time info on conversion rates. Converting one cryptocurrency for another is no static matter, so you should be able to calculate transaction fees based on the current conversion rates. Perhaps you want to purchase BTC directly through your credit card. You should have access to real-time rates to inform you of price action.
- Automated logout. The success of a Bitcoin wallet depends on its ability to log out automatically. Automated logout protects the account from unauthorized access if you step away from your phone/tablet. The point is that the Bitcoin wallet should log you out after a certain period of inactivity.
- QR code. The QR code is used to share the Bitcoin wallet address and make payments. If the wallet includes a QR code scanner, you can transfer BTC with just one click. It’s no longer necessary to copy and paste the wallet address to proceed with the transaction.
- Payment gateway. If the Bitcoin wallet has an integrated payment gateway, buying and selling goods and services becomes easier and faster because there’s no need to link to a third party. Most payment processors support the purchase of various altcoins, including Ethereum.
- Push notifications. Small, pop-up messages are sent to your device even when the wallet isn’t open, so you always stay informed. You don’t have to check back occasionally to see if you received any new messages or if there are changes in Bitcoin’s price. You can disable push notifications anytime you want.
Be prepared for a lot of reading and experimentation because you won’t find the perfect match on the first try. No matter your wallet type, your Bitcoin will always be attractive to scammers, fraudsters, and thieves. The good news is that you can reduce the chances of getting compromised by enabling two-factor authentication, keeping your seed phrase in a safe place, and spreading your investment across multiple wallets.