If you’ve been asking yourself how important is it to create your own Bitcoin Wallet App, and how you can augment the security of your wallet, then this article is certainly for you.
Standard wallets are considered to be the best option to keep your money, but are they secure? What if someone steals your wallet? Or what if you lose it? There are some unavoidable problems with normal wallets too. So when we talk about digital wallets, are they secure enough to store and manage your digital assets? The answer is yes because these wallets are fostered with high-end security features. However, the security of your wallet also depends on the type of digital wallet you use.
A general definition of Crypto Wallet
Cryptocurrency wallets are used to send, receive and store cryptocurrencies. The wallets comprise a public key and a private key. A public key is the wallet address while a private key provides access to the wallet and is further used to digitally sign a transaction. Without a cryptocurrency wallet, there’s no proof of your ownership of the digital assets that are stored on Blockchain ledger.
No ownership of digital assets without a Wallet! How is that possible?
Besides storing your private keys, wallets also store the address of your assets residing on the Blockchain. If you lose that address, you lose control over your digital money or the assets. Also, without the address, you cannot transfer or even access the digital assets stored in your wallet.
Wallets are an essential element of the cryptocurrency ecosystem
Before we delve into how you can bolster the security of your Bitcoin wallet, and save yourself from the consequences of losing your digital assets. First, let’s find out how the type of wallet you use determines the level of security of your digital wallet.
There are two types of crypto wallets
Hot wallets and cold wallets; we’ll discuss each one of them separately:
Hot Wallet: Hot wallets are connected to the internet. Such wallets are mostly provided by the exchanges you buy or sell your cryptos on. As they are connected to the internet, they are more vulnerable to security hacks. However, the right security features can help enhance the security of a hot wallet and allay the chances of hacks.
Cold Wallet: A cold wallet is an offline wallet, stored on a piece of hardware like a USB drive or smartphone. These can also be purchased as a device that is specifically designed to store your digital assets.
Which is Better – Hot Wallet or Cold Wallet?
Both hot wallets and cold wallets come with their own set of advantages and disadvantages. While a hot wallet is more susceptible to hacks, it allows easy access to your crypto assets and facilitates quick transactions. On the contrary, a cold wallet is more secure but inconvenient to use; they also make the funds less accessible.
The use of both hot wallets and cold wallets is recommended by experts. You can keep the assets that you want to trade regularly in your hot wallet and move the rest of your assets in the cold wallet.
How can you enhance the security of your digital wallets?
Here are some of the features that you can integrate into your wallet while you create your own Bitcoin wallet app to enhance its security.
Multi-Sig
Multi-sig provides an extra layer of security during the withdrawal of digital assets. It requires more than one person to sign the transaction.
Two-factor authentication
Two-factor authentication, also known as 2FA, allows legitimate access to a wallet. It helps ensure that only authenticated users are allowed to access the wallet.
QR code support
QR code support simplifies the exchange of cryptocurrencies in a single click and is scanned to enable blockchain transactions.
Password-protected access
The 4-digit secure login PIN ensures authenticated access to a user’s account, ensuring no unauthorized access.
Optional session logout
It automatically logs out the session in case the user remains inactive for a certain period. This enhances the security of users’ accounts and funds.
If you wish to create your own Bitcoin wallet app, or are planning on using a white label crypto wallet, these security features are a must-have. In addition to that, make sure that you keep all of your passwords and private key safe with yourself, and back up all the information stored on your wallets.
How about usability and helpful features? A lot of wallets still have a questionable UI/UX. Wallet app should obviously be secure but also have all the right tools. I personally use Lumi Wallet, it has a bunch of cool stuff like token exchange, buying crypto with credit card, price charts, and it's simply easy and pleasant to use.
We agree that usability features play a significant role while selecting a wallet. But if the wallet is not secure enough and has a track of digital assets getting stolen or misplaced, would you still care about the UI/UX of the wallet? We are not saying that these are not important or should be ignored, rather we believe that a wallet's security comes first on the priority list and then UI/UX weighs in.