Once you have bought your first bitcoin, it’s essential that you have a bitcoin wallet to store it in. It may sound easy, but there are dozens of wallets available to choose from, and each one offers a variety of different features and benefits. So how can you pick the right wallet for you? Here are some things to look out for:
SECURITY
One of the most important things you need to look out for after you buy bitcoins and need to find a bitcoin wallet is security. If the wallet is kept online (this is what is called a ‘web wallet’) then it should have ‘https’ rather than ‘HTTP’ at the beginning of its URL. It should also offer a two-factor authentication system when it comes to logging in. These are what will make your bitcoin ultra-secure.
MULTISIG
Multisig, or multisignature, means that you need more than one key to authorize a transaction using your bitcoin. This is like having a secure lockbox that needs two people with different keys to be present at the same time to open it. It may not be something you are interested in doing as it will slow the process of being able to spend your bitcoins, but it also adds a layer of security.
HAVING THE PRIVATE KEY
With bitcoin, there is a public key which is available to all, and a private key which is only available to you. This private key is how you can make transactions. Some wallets don’t give you access to the private key, which means you don’t have control over your own funds. Without the private key, you can’t make a backup of your wallet, for example, or move the bitcoins in and out. If you are going to want to do this, you’ll need to look for a wallet that gives you the private key.
TRANSPARENCY
How transparent is the wallet provider? Do you know exactly how they work and what they do? Something that is important to take note of is whether the wallet code is open source. If it isn’t, you won’t be able to say for sure whether your bitcoin is entirely secure. An open source code can be easily checked for issues and vulnerabilities.
ANONYMITY
Some people are very keen on anonymity, whereas for others it doesn’t matter at all. If you do want to remain anonymous, then you should take a look at the registration form for the wallet you are thinking of using. What information is it asking for? Some need only minimal information such as your email address while others need to know a lot more.
REPUTATION
To ensure that your wallet is reputable, make sure you search for it online in forums and discussion boards. It’s important to see how other people feel about it and what they think. Reading a number of these discussions will give you a great overview of the wallet and will help you to make a decision about using it.