Cryptocurrency Wallets – Best BTC wallet 2021
Cryptocurrency Wallets – Best BTC wallet 2021
Have you bought coins and are now wondering, “Where can I keep them safe?” Then you are in the right place in this post. Choosing the right wallet for the cryptocurrencies is just as difficult as choosing the right exchange. I am going to explain the different types of wallets here and their advantages and disadvantages. Reading time about 5 minutes, it’s worth it!
Wallet – what’s that?
Before we get into the different types of crypto wallets, however, it must first be clarified what they are. It is difficult to compare it with a wallet in which you put bills, because cryptocurrencies exist on the blockchain and stay there. We only get access to the blockchain with the “private” and “public keys”. That is why it is precisely these that are saved on every wallet. Everything around it is only used for user-friendliness and is based on the area of application, for example mobile phone, desktop, browser, etc. When I earned my first BTC through Getnode in 2020 I had to teach everything myself. I want to spare you the trouble, so let’s look at the different wallets, analyze the possible applications and at the same time also the security risks:
Cryptocurrency Wallets – 1. Web Wallets
Web wallets are always connected to the Internet and can be selected and opened via the browser or simply via the URL. The advantage here is the accessibility, the web wallets can be opened from anywhere. This is of course also where the greatest danger lies, because they can be attacked directly by hackers from anywhere in the world. The most popular form of a web wallet is the internal wallet of a crypto exchange, for example Binance. Here, however, it is possible to take various security precautions that make it much more difficult for the attacker to gain unauthorized access. For example, by enabling 2FA. Again, there are various precautionary measures that should be taken, but more on that later.
2. Browser Extension Wallet
One form of web wallet that is limited to your own browser is a browser extension. Here you get a seed phrase with which you can install and activate the extension on any browser, should it be deleted. This has the advantage that you cannot install the wallet without the seed phrase, i.e. access is only possible via your own PC. Trojans and malware in the browser, which, for example, swap addresses when sending currencies, harbor security risks. For this reason, you should always double-check the addresses before sending and have an up-to-date anti-virus and malware program on your PC.
3. Mobile / cell phone wallets
Nowadays everyone has their mobile phone with them and wants to be able to do financial transactions with it as well. This is of course possible with cell phone wallets. However, you have to be very careful here, because cell phone wallets harbor a multitude of dangers. An example: An app was recently published in the Play Store that looked exactly like that of a well-known mobile phone wallet. It worked too, the only difference was that the money didn’t get where it was supposed to. It was gone, or with someone else. If you send the money to the wrong address with cryptocurrencies, it has usually disappeared, because unlike bank transfers, there is no way to simply book the money back. Cell phone wallets are always connected to the Internet and exposed to all the dangers that a cell phone brings with it. New apps and thus new potential malware are constantly being installed, similar to a web wallet. Personally, I would only use them with smaller amounts and keep the long-term investments on a more secure wallet.
4. Paper wallets
Although paper wallets are one of the least used ways to store your own cryptocurrencies, they are also one of the oldest. Paper wallets were used in their current form for the first time back in 2011. Modern paper wallets contain a QR code as well as the public and private key. The QR code makes payments easier, because otherwise the complete rows of numbers and letters always have to be entered by hand. The advantages of a paper wallet are obvious, literally, because they are completely offline and only on paper. No transactions are possible without the information on it. This means that on the one hand we are safe from all online attacks, on the other hand there are everyday dangers that can cost us a lot of money. If the paper wallet is lost, stolen, burned or lost in any other way, the coins are inevitably gone. A safe deposit box is also only a limited protection, because on the one hand, these are usually only insured to a limited extent and, on the other hand, you would have to prove how many coins were actually on the address at the time they were lost and hope that the bank will accept this.
5. Hardware wallets – Best BTC wallet 2021
Last but not least, there is the most recommended method of storage, especially for long-term investors: hardware wallets. Here I personally differentiate between two types of wallets, those that you install yourself on a USB stick and those that are specially built by companies for this purpose, for example the ledger.
Let’s start with the first method, for this we only need a USB stick of our choice, but I would still get a high quality stick, better safe than sorry. For everyone who now thinks that an external hard drive would be much better and the risk lower, I hate to disappoint. I researched the whole thing and USB sticks have the longest life expectancy of all external storage methods and are of course unbeatable in terms of price. In addition, the wallets are still secured with a seed phrase, but one step after the other. In my case, I installed an Electrum Wallet on a USB stick to store my Satoshi (BTC) and safely wrote down and kept the Seed Phrase (a series of words to restore the wallet). Nothing is left on my computer. The wallet on the USB stick is of course still secured with a long password. The most important thing is the seed phrase, in principle you only need that, but then you would have to install a separate wallet for each transaction, so I simply insert the USB stick into the PC. The risks with this method are of course the connection to the PC during transactions, because the data on the stick is no longer additionally protected against malware.
The purchased wallets, for example the ledger, are also secured, because you can only send coins if you have the device and the secret pin. The ledger is also encrypted. If everything is in order with the software, then this is certainly one of the safest and most convenient storage methods. However, one trusts that no errors can creep into the software updates, and attempts have often been made to get to the owner’s coins through manipulation or fake updates. Partly, unfortunately, with success, which is one of the reasons why I chose to write “Cryptocurrency Wallets – Best BTC wallet 2021”. Here are some tipps to avoid losing valuable crypto:
General safety information and common mistakes
All wallets have one thing in common, they usually need a backup, or the passphrase or passwords must be kept in a safe place. At the same time, caution must be exercised here, because unauthorized access gives the attacker direct control over all coins. The passwords should also be complex enough to survive an attack by an attacker. Most of the time, however, it is mistakes that could easily be avoided that cost you the coins. Here is a list of common mistakes:
- 2FA Authenticator on the same device
- Insecure passwords
- No (secure) backup of passwords, seeds or passphrases
- Addresses not checked when sending
- Insecure PC – No admin password, no anti-virus program, no anti-malware program
- Insecure email account
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