5 Things To Investigate Before Choosing A Crypto Wallet
Choosing the right crypto wallet can be tricky. With thousands of options, it’s easy to get overwhelmed. This is why my team and I have shortlisted 5 things you must keep a lookout for when choosing your crypto wallet.
Keep on reading to find out more.
What Makes A Good Crypto Wallet
Security and privacy
Crypto wallets are a favorite target of hackers due to the high value of cryptocurrencies and the unregulated nature of the industry. And while cybersecurity has developed by leaps and bounds in recent years, this doesn’t mean that you can afford to neglect security.
When you’re looking for a crypto wallet, ensure that it has decent security measures in place. These include features like multi-factor or biometric authentication, seed phrases, and, if possible, cold wallet compatibility.
The last point, in particular, is especially important. Cold wallets store your cryptocurrencies offline, making them impossible for hackers to access. For added security, you can also opt to secure your cold wallet in a separate location.
Hot wallets with cold wallet compatibility allow you to enjoy both flexibility and security at the same time. So that way, you can send/receive cryptos with ease while still keeping your assets away from cybercriminals. There are even some free crypto wallets, as Tezro explains here, that can be useful for the ones who can’t afford a high tech cold wallet.
Types of cryptocurrency supported
Multi-currency crypto wallets support a wide variety of different tokens. This makes them especially useful for investors interested in niche altcoins that have yet to break into the mainstream.
If you’re just looking to invest in Bitcoin and Ethereum, this wouldn’t be too much of an issue. But I recommend keeping your options open as you won’t know which coin will explode next.
Other more advanced investors may opt for dedicated hot wallets such as Mycelium, which only supports Bitcoin. This wallet features more sophisticated orders and unique security features not found elsewhere.
Company that provided the wallet
Another thing that you should keep a lookout for is the company or service provider managing your crypto wallet. The world of crypto is volatile, and scandals like the Mt. Gox collapse mean that you should always err on the side of caution.
This is why I always recommend that you do your own research on the company providing your wallet. Keep in mind that scammers and cybercriminals have introduced fake wallet apps that steal deposited cryptocurrencies.
So, as a rule of thumb, only make use of wallets provided by reputable companies. Some good examples include wallets provided by Coinbase and Binance, respectively. These services are managed by world-famous crypto exchanges with a proven track record.
Besides name recognition, such reputable companies are far less likely to collapse overnight without any prior warning.
Good track record
When you’re shopping around for a wallet, always be sure to take a look at its previous track record. Frequently, reputable sites will provide information on previous security breaches and what corrective action they’ve taken.
Hot wallets updating their security procedures are much more challenging to hack into. More importantly, a transparent site about incidents is much more trustworthy. Scrupulous crypto wallet service providers are often less than honest about security breaches.
And this lack of communication and honesty leaves plenty of room for questionable behavior. So always be sure to regularly keep updated with the news,
Design and interface
It’s also important that your wallet has a user-friendly design and interface. A poorly designed wallet will only serve to frustrate you and raises the risk of making a mistake when performing transactions.
So before you make your decision, be sure to test the wallet out for yourself first. Ideally, it should feel natural and intuitive to use.
If you feel that it’s the right wallet for your purposes, then go ahead with your decision.
Always practice care when choosing your wallets. Ensure that it’s from a reputable provider with a good track record and plenty of solid security procedures.
Once you’ve got the basics down, then it’s time to start using your wallet.