I believe by now you must have read my article on common security risks associated with mobile, web, and desktop wallets which I have published a few days back.
If you have not read that yet, then do read it, because that’s where I have talked extensively about the security risks of using Bitcoin software wallets (like mobile wallets).
And I know that some of you who have read that article might think that I am telling you to stop using mobile wallets (or software wallets), but that’s not true.
I think software wallets are very useful.
So here, in this post, I’m going to answer a few common questions:
- When should I use a mobile wallet?
- Where should I use a mobile wallet?
- How much should I keep in a mobile wallet?
- Which wallet should I use?
Benefits of Mobile Wallets for Bitcoins and altcoins
Mobile wallets are the fastest ways to use your bitcoins/altcoins because they can be used instantly in any day to day activity.
But as I mentioned in the previous article, these wallets can also be super risky. That’s why I advise you to treat mobile wallet as you would treat the wallet in your pocket; only put in the amount necessary to make imminent transactions with.
So, in my opinion, you should put in as little as possible and only use a software wallet in these situations:
- Quick Transactions – When you want to pay with a quick transaction like in a coffee shop or a McDonald’s, or when you want to give someone a tip, having a mobile wallet to use is super convenient.
- While Travelling – When you are traveling in countries where there are Bitcoin ATMs, it becomes quite handy to have a wallet ready to go. With these ATMs, you can instantly trade bitcoins for the supported fiat currency of that country (EUR, GBP, USD, etc.).
- To Fund Your Bitcoin Debit Card – You can use your mobile wallet to easily and quickly fund your Bitcoin pre-paid Visa/MasterCard debit card which you can use later to swipe at any Visa/MasterCard merchant.
- To Create Multisig Wallets – You can enhance the security of your funds while using mobile wallets by creating multisig mobile wallets. Multisig wallets allow you to spend funds only when you have signed a transaction with at least M out of N keys. For example, for a wallet like Copay, you need to have at least 2 out of 3 keys to perform that transaction. Check this post for more info.
- Airdrops & Education – If you believe in helping cryptocurrencies like Bitcoin thrive, then you can do “educational airdrops” using your Bitcoin mobile wallet. This will allow you to give away some Satoshi as well as teach people on how to transact using Bitcoin.
- To Show Off – I have seen some early adopters of Bitcoin who like to show off by paying tips through Bitcoin. And if you would like to join their ranks, then you can also do this by using your mobile Bitcoin wallet app.
Now, I am sure some of you want to know which mobile wallets are the best to use for the aforementioned situations.
Suggested Mobile Wallets For Storing Bitcoin/Altcoins
Here is a list of popular mobile wallets:
- Coinomi (Supports multiple crypto)
- Copay (Multisig-Mobile Wallet)
- BitGo (Multisig-Mobile Wallet)
When To Use Mobile Wallets
In my opinion, these are the only times when we should be using mobile and software wallets.
But you should decide for yourself which wallet to use in any given situation.
I have mentioned many times that the type of wallet you want to use ultimately depends upon the kind of security you want and the level of activity you want to do with your bitcoins.
It also depends on how frequently you use your funds and how much you want to store in any one particular wallet. Also, are the coins you possess for your savings/investment, or are they for daily transactions?
You need to decide what’s right for you.
My Personal Take On Different Wallets
I personally prefer hardware wallets like the Ledger Nano S for storing a significant amount of bitcoins because of the high-security features.
And I use desktop wallets to keep bitcoins which I am not using for daily transactions but want to keep handy for buying other cryptocurrencies. This way, I can quickly connect my desktop wallet to the Bitcoin network and transfer over my bitcoins.
Of course, for spending’s sake, I keep some bitcoins (0.2-0.3 BTC) in my mobile wallet (Mycelium/Coinomi) which I can use anytime on-the-go, similar to how I keep paper money in my pocket wallet.
In short, mobile wallets are quick and easy to use, but you should never sacrifice safety for convenience.
So now I want to hear from you: Which wallets do you like the best? When do you use hot wallets (mobile wallets, software wallets) and when do you stay away from them? Let me hear your thoughts in the comments below!
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