From all forms of Bitcoin wallet, the Hardware wallet is a most reliable Bitcoin wallet. However, there are other forms of bitcoin wallets that a user can use. The reliability depends on the user’s intention to use.
06 November 2019, AtoZMarkets – Bitcoin has become famous in the investment world, so it is very important to know the process of identifying a reliable bitcoin wallet. Bitcoin is a sure alternative to the government-backed currencies. There are some argue that digital currencies are safer, easier, and offer better privacy.
What is a Bitcoin wallet?
Bitcoin is a digital cryptocurrency. It does not have any physical shape or form. Therefore, people cannot store them anywhere. Instead, People use the private keys to access the public Bitcoin address and transaction signatures. So it is very important to store these two pieces of information. The combination of the recipient’s public key and the sender’s private key makes a Bitcoin transaction possible.
A Bitcoin wallet is a software program to store the Bitcoins. Bitcoin wallet keeps the information about the private key of every Bitcoin address. Bitcoin wallets allow you to send and receive the Bitcoins and transfers ownership of the Bitcoin balance. Additionally, there are many forms of Bitcoin wallets. Of them, the desktop, mobile, web, and hardware are the four main types of wallets. Each of these wallets has different requirements and varies in terms of security, accessibility, and convenience.
How to Identify a Reliable Bitcoin Wallet?
It is quite tough for investors to identify a reliable bitcoin wallet. However, the reliability of a bitcoin wallet depends on the user’s intention to use it.
#1 Paper wallet as a reliable bitcoin wallet
A paper wallet is completely hacker attacks free.
A paper wallet is a document that contains a public address for receiving Bitcoin and a private key. It allows spending or transferring Bitcoin from that address. It is easy to access the paper wallet through QR-Codes scanning.
The paper wallet allows users to create a random Bitcoin address with a particular private key. The generated keys can then be printed, with some services offering a tamper-resistant design or even an option of ordering holographic labels.
The main benefit of a paper wallet is the offline storage of information. Therefore, the Bitcoin remains free from a hacker attack and malware attack. However, there are some issues when creating a paper wallet. There is a possibility to steal bitcoin information while creating or while using it. To avoid this risk, the user should use a clean operating system running from a USB flash drive or DVD.
Furthermore, after setting up the paper wallet, the website code should be able to run offline. This will allow disconnecting from the internet before generating the keys.
Is the paper wallet a reliable bitcoin wallet?
It depends on the user’s preference. If the user feels that his information is safe in the real world rather than the online storage, the paper wallet suits him most. There are several websites like BitAddress or Bitcoinpaperwallet that allow generating the Bitcoin Paper wallet.
Moreover, it is important to understand that printing information is valuable. To trust the paper wallet as reliable bitcoin wallet, the information needs to keep in a plastic bag and to store in a dry place. Some people laminate the information to keep it safe from getting wet.
#2 Physical Bitcoin & its reliability
Physical Bitcoins has recently become a high-quality item for Bitcoin users.
This wallet is usually loaded with a fixed amount of BTC. People cannot spend the value of physical Bitcoin as long as the private key remains hidden.
Physical Bitcoins are a convenient way of storing funds. The funds remain safer and can be extremely useful when trading offline. However, there is a serious disadvantage regarding physical Bitcoin.
One of the famous physical Bitcoin wallets is Bitbill, which has a credit card shape. There are alternatives with round metal shapes. Mike Cadwell created the first Casascius physical Bitcoins in 2011. The private keys of it were hidden under a peelable hologram. It got a serious conflict with the Financial Crime Enforcement Network, which made him cease the business. As BTC is still legal in a lot of countries, the recognition of physical bitcoin may increase.
Comparing to the paper wallet, Physical bitcoin is more advanced in technology. But the Paper wallet is a more reliable bitcoin wallet comparing to a physical wallet.
#3 Mobile Wallet & its reliability
A mobile wallet is very risky for hackings. It is very useful for those who use bitcoin on a daily basis. It is easy to pay for goods or trading them face to face from the Mobile Bitcoin Wallet.
Mobile wallet runs from the smartphone with private keys that allows the pay from the phone directly. Moreover, there are near- field communication feature for some smartphones. Therefore, the user can tap on their phone against the terminal without providing any information. This wallet becomes famous for its easy payment verification technology. This technology relies on trusted nodes in the Bitcoin network to ensure the correct information. Despite the simple & user-friendly structure, mobile wallets are prone to hackers. However, it is reliable to the user only when he is able to keep the mobile phone safe.
Moreover, there is a risk of losing all the information in case of losing the mobile. There are many Bitcoin wallet apps Android. Apple banned Bitcoin wallets from the App Store in February 2014 but changed the decision after some months.
#4 Web Wallet & its reliability
Web wallet enables to access the funds from any device with an Internet connection.
These wallets store the private keys on a server, which is controlled by a third party. There are different services that offer different features. Some of which allows linking to mobile and desktop wallets to replicate the addresses
Like mobile wallets, e-wallets enable their users to access their funds from any device with an internet connection. This wallet is reliable bitcoin wallet like mobile wallets and it is easy to access from every place.
#5 Desktop Wallet & its reliability
A desktop wallet is more reliable bitcoin wallet than online and mobile wallets as it is installed onto the computer.
This wallet keeps the private keys on your hard drive. By definition, this wallet is more secure than mobile wallets. This system does not rely on third parties for storing the data. However, it still requires the internet, which makes them less secure. However, desktop wallets are a great solution for those with small amounts.
There are several options in desktop wallets that cater to different needs. Some focus on anonymity, some on security and so on.
#6 Hardware Wallet & its reliability
The hardware wallet is the most secure way of storing Bitcoins.
This is a unique type of Bitcoin wallet that stores the user’s private keys in a secure hardware device. This is considered as the most reliable bitcoin wallet that can store any amount of Bitcoin. Hardware wallets can be used securely and interactively like paper wallets. Moreover, they are protected from computer viruses. The user cannot transfer funds without the device in plaintext. Some hardware wallets even have screens with another layer of security.
There are some options to generate a recovery phrase to confirm the amount and devices. This wallet is best for persons with a high amount of investment.
The type of wallet depends on the needs of the client. The user should consider the currency, frequency to use before choosing a wallet. If the secret keys are lost or the coins are sent to the incorrect address, no one can undo the operation.
What do you think about a reliable Bitcoin Wallet? Let us know in the comments section below.