How to choose a bitcoin wallet

Bitcoins are stored digitally. This means in order to store some yourself you will need a bitcoin wallet. Much like shopping for a physical wallet you carry around with you to spend cash, when you start shopping for a bitcoin wallet you are confronted with a great many choices. In this article we will explore the options available when it comes to acquiring a new bitcoin wallet.

Hot and cold

The first decision you need to make is whether you will store your bitcoins hot or cold. Any wallet that is connected to the internet is termed a hot wallet, whereas a wallet that is disconnected from the internet, such as a paper wallet, is referred to as a cold wallet.

That's right you heard me right, if you so choose, you can store your bitcoins on paper. Paper wallets are great for security but they are not very practical, to use your funds you need to upload your off-line private key into a digital wallet. For this reason paper wallets are best used for long term storage only. If you lose your paper wallet you have lost your funds, so be sure to secure the paper you store your wallet on securely (i.e. in a fireproof safe). If you would like to make your own paper wallet bitcoin.com have an easy to follow guide.

Web or mobile?

Software based wallets come in three main varieties: web, mobile or desktop. Web solutions are usually the most convenient. With a web based solution you trust the wallet provider to securely store your private key online. A popular web based wallet is blockchain.info another is coinbase.com. Web based wallets are super convenient but generally not recommended if you are storing a significant quantity of money. If you are using a web based wallet and are concerned about anonymity, be sure to choose a wallet provider that supports HD wallets.

A HD (Hierarchical Deterministic) wallet allows you to create many wallets from one seed.

A HD seed is a series of words, in a random order, used to generate your private key. When using a HD wallet as well as being able to generate multiple wallets linked to the same private key, you are also able to recover your private key should you need to by utilizing the HD seed.

Mobile wallets are similar to web based wallets but, as the name implies, are designed to be used on mobile devices. Mycellium and Airbitz are two popular mobile solutions. These apps allow you to download a simple app onto your Android or Apple IOS phone and have your wallet setup in minutes.

Desktop wallets

A desktop wallet offers better protection than a web or mobile based wallet. With a desktop wallet, you and you alone are in control of your private key.

Your private key is stored on your hard drive and in the case of hardware failure providing you have made a backup of your private key you can recover it.  However, if you have malware on your computer, someone could potentially access your private key, and if they can access your private key they can access your funds.

If you are concerned about security it is advisable to only connect your desktop wallet to the internet when you are actually transferring funds and ensure your virus protection is up to date, but you will need to have another computer for your day to day internet use if you take this extra step to secure your desktop wallet.

The most popular desktop wallet right now is Electrum. There are a number of reasons for this.

Electrum looks like it was designed about ten years ago judging from the UI, but don't let this fool you.

It is very robust, and it is also secure. The strength in security comes from the fact that Electrum is open source, so the source code for the application is in the public domain. Another great feature of Electrum is the fact that it allows you to increase the mining fee you've sent after you have broadcast your transaction. This means if a transaction is taking a particularly long time, you can increase your fee, in the hope that you will speed it along.

Hardware wallets

Hardware wallets (cold because they are disconnected when not transacting) offer a great balance between security and convenience. Your private key is stored in a gadget that plugs into your PC, and this device must be plugged in to the internet to transact with your funds. Two of the more popular hardware wallets are Ledger and Trezor.

Hardware wallets are a great all round choice for medium to long term storage of your bitcoin funds.

Conclusion

In summary you have a great array of choices available to you if you are in the market for a new bitcoin wallet. My personal favorite for day to day transactions is the web based solution blockchain.info because I love the simplicity of the software, it supports 2fa (two factor authentication), and is also HD so I can use multiple wallets, and easily recover my private key if I lose access to my account. For more secure storage of bitcoins that you do not need to transact daily with my advice is to use a hardware wallet.

Then of course if you want to be completely secure, you can go ice cold and make your very own paper wallet. The choice as they say, is yours.


White-label software: It's time to move on

Where we're at

Bitcoin has ushered in a new era of systems, schemes and ideas. People have realized that we no longer need to place our trust in intermediaries. We've developed amazing tools such as provable fairness, decentralized exchanges, smart contracts, atomic swaps, and many more ideas on the horizon. However, some people seem stuck in the past. Some Bitcoin casinos still choose to use white-label software and other "one size fits all" scripts and programs for their platforms.

For the unfamiliar, Wikipedia defines white-label software as "a product or service produced by one company (the producer) that other companies (the marketers) re-brand to make it appear as if they had made it". As far as Bitcoin casinos go, this means companies buy premade casinos and rework it to make it "theirs". Software packages designed like this are often not designed to work with Bitcoin out of the box. As a result, you end up with websites with awkward alternate currencies, using outdated dependencies like Flash, that don't really present themselves as websites pushing a new technology.

Where we should be

With the rise of Bitcoin, we got a chance to start over. To stop accepting mediocrity, and work towards the best technology we could create. Instead of using white-label software, write your own. Bake in Bitcoin support from the ground up. Make it an integral part of the user experience. Use the new technology available to build the best user experience possible.

It often seems like the sites that develop their own software care more about their users as well. Who would you trust with your money? The site that bought their software, or the site that designed everything from the ground up? Some things you won't find in white-label software at all, provable fairness, early deposit credits, cheaper batch withdraws. When a chain fork occurs, who do you trust to give you both coins?

Design-level decisions can't be made with white-label software. Everything is handed to you as-is, and making changes is usually difficult and dangerous. Changes in code someone else wrote could end up with unintended consequences leading to loss of user funds, security holes or similar things. And if you have a new amazing idea for a game, or want to introduce new technology, often times you're just out of luck./p>

Final thoughts

The types of people likely to buy software instead of build it themselves are usually more interested in making money instead of their users. The websites usually lack a lot of features that people have come to expect from Bitcoin websites. The point of this article is to get the point across that we have the technology to make great websites. It's time to take advantage of all of this innovation and stop settling for average.