Considering the fact that BTC is on its flat, a bulk of investors suppose it’s the best time to buy it. Thus, Swap.Online presents a kind of manual for newbies on how to choose best Bitcoin wallet.
Point 1. Safety first.
All of you guys may hear about the devastating Bitcoin frauds and hacks resulting in more than 1 million BTC stolen up to nowadays. That’s why you should double-check all the issues with your wallet safety. Firstly, you should verify the protocol security of the domain you would like to use as the btc wallet. The address of domain name should start with ‘https’ and not with ‘http’. Moreover, it should be accompanied by the icon of green lock. It means that your connection with the site is secure and encrypted. All the information required to store Bitcoin here is only transferred between you and wallet.
That’s how the encrypted connection looks like.
Finally, if you are familiar with whois-services, check the history of domain name and its holder. Best cryptocurrency wallet is always protected by the U.S.-located CloudFlare service which helps to keep the information about domain registrar in secret and to save the web-site from DDOS-attacks.
Point 2. Decentralized or centralized?
Should you look through the vast majority of cryptocurrencies wallets, you will obviously find the word ‘decentralized’ many times. ‘Decentralized’ in that case means that the service doesn’t use single server for operations, central matcher to connect buyer and seller etc. Since Bitcoin itself was designed as the decentralized currency, all Bitcoin transactions should be decentralized in a perfect world. But, in fact, wallets and exchanges use centralized systems to burst the speed of operations. By the way, every single point of centralization means that the wallet is vulnerable for frauds. Taking this fact into account, centralized BTC wallets use words like ‘hybrid decentralized’, ‘semi-decentralized’, ‘semi-centralized’ etc. Beware of being mislead: centralization means speed and vulnerability, decentralization means safety and technology.
Point 3. Bitcoin wallet…only?
Times when bitcoin wallet was used only for storage, sending and receival of Bitcoin are now just a distant memory. Now best wallets for every currency should be cross-chain. It means that there should be multiple blockchains in one wallet – Bitcoin, Ethereum (it results in the availability of ERC-20 and ERC-223 tokens based on the Ethereum blockchain), EOS, XRP, Monero etc. The wallet which is pegged to the single blockchain will not be useful to trade Bitcoin against altcoins. Investition in single coin is very risky because of unpredictable market volatility. Proper wallet should merge different blockchains being all-in-one solution for crypto investment.
Point 4. Fee, fee, fee.
Trading on the crypto market shouldn’t be costly. By the way, majority of wallets and exchanges allowing to conduct bitcoin transactions are charging their clients with transactional fees. It is the amount of crypto you pay for the service per every transaction. Every BTC wallet (or any other kind of storage solution) has its own policy. Mostly, the taker of liquidity is charged with transactional fee. It depends: 0,3 % from taker, 0,2% from taker + 0,1 % from maker, fixed fee for small transactions (0,01 ETH or 0,0005 BTC) etc. Swap.Online organized the research of market and found that 0,3 % from the sum of trade is maximum reasonable total commision. If you are charged with something more by your Bitcoin wallet, it is expensive.
Transaction fee scheme of one popular Bitcoin exchange. Swap.Online says: it’s expensive
Point 5. How to withdraw?
Last but not least of our tips is to check the withdrawal options of your Bitcoin wallet. Imagine the day you earned your first USD million and decided to buy this pesky yellow Lamborghini. How would you get your money back? First of all, check the rules of withdrawal. Some wallets use VISA, Mastercard or bank accounts connected to SEPA or even SWIFT. But then you will need to send some documents to withdraw money: copy of your ID, proof of income, identification photo (ID, your face and screenshot of exchange in high resolution) etc. It is called ‘know-your-customer/anti-money-laundering’ policy or KYC/AML. Are you ready to go through this checks usually resulting in weeks of withdrawal delay? Moreover, withdrawal fee can be really high – up to 10 % of money you would like to withdraw. In your case it is 100K USD. So, be aware of difficult and costly withdrawal.
So, Swap.Online strongly recommends to use Bitcoin wallets which are:
- low-fee or zero-fee
- KYC/AML – neutral
In Swap.Online we stick for the whole range of these rules. Store Bitcoin with safety and profit!