Software Wallet Insights

When it comes to wallets, they are basically either software or hardware ones. You can check the detailed classification here. Speaking about software, I consider it’s associated most with desktop wallets, because mobiles are using applications and webs are working on browsers. It’s the desktop version, which actually perform via software interface, so this is what I want to stop by in this page. And once again, just as a reminder – the wallet doesn’t store your coins inside, but your pair of keys. The last-mentioned are your access to your assets, which are on the blockchain itself. Now, let’s review what’s specific on desktop wallets.

An image showing multiple nodes connecting to each other.

Types of Software Wallets

As speaking of software wallets, I would like to show you all the different types you might ever meet, so you would be aware of the terminology:

Official vs Alternative

The official wallet is usually a core wallet, which means it stand only for one particular coin, because it’s often created by the development team. Alternative wallets are a way to improve the official version by supporting multiple coins at the same time.

Official example: Bitcoin Core

Alternative example: Guarda

Full vs Light node

Full node means that the software must download the entire blockchain locally for the purpose of not only supporting the network, but also possess all the informationt to confirm transactions.

Full node: Mist wallet

Light node: Eclair

Single vs Multicoin

Being a single coin wallet, doesn’t mean it’s for sure the official one. There are some alternative wallets, created to support only one particular coin.

Single coin: Electrum

Multicoin: Exodus

Software Wallets Features

Some of the features you might want to consider when choosing a software wallet:

Desktop vs Desktop & Mobile

This feature provides the opportunity to use both desktop and mobile versions of the same wallet. Very comfortable for the ones who are always on the go and need to have their constant access right on their hand all the time.

Desktop only: Armory

Desktop and mobile: Jaxx

Open Source vs Closed source

This feature allows sharing the wallet’s code, which offers the opportunity to read and change the code, respectively create another wallet.

Open source: Etherwall

Closed source: HB Wallet

Deterministic vs
Non-deterministic

Also known as HD wallets – here it comes to the way your keys have been generated – randomly or from a seed. This is an anonymity feature, which allowsт you to have a new address for each of your transactions, so they’re harder to track.

Deterministic (HD): Copay

Non-deterministic: MEW

How to choose a Software Wallet?

Many people agree there is no such thing as best wallet, because it always depends on the user’s expectations and how they plan to use it. I simply can’t tell you which one the right for you is, but what I can to is to show you all you need to know when making your decision. The following tips are things to consider:

  • OS compatibility: before you download the package, you should verify if it’s the right one for your PC/laptop, because not all the desktop wallet support each of the operating systems
  • Usage: you might prefer a different wallet depending on the how you’re going to use it. For example, you can use almost every wallet for mining but if you’re willing to stake, you might prefer the official client. Anyway, if your aim is to have big amounts in it, go for a hardware wallet – it’s more secure.
  • Ease of use – unfortunately, not all the wallets are user-friendly when speaking of beginners, that’s why you should better think of a GUI (Graphical User Interface) design.
  • Fee control – this one is important if you would like to change the fee for your transactions. The higher the fee is, the biggest the change for entering the next block is, so it gets broadcasted faster. Not all the wallets offer it, so think if it’s important when choosing one.
  • Encryption – most of the wallets request you to create a password, PIN code or pass phrase to secure your wallet. It’s always worth having this one.
  • Keys ownership – some of the wallets give you access to your private key, which means you’re the only one responsible to keep it safe. If you don’t have it, then it’s the server’s software to think on it.
  • Built-in exchange – this is an extra service and normally it’s the ShapeShift exchange, which is implemented in the wallet. It has a bit higher fees but it’s fast and time-saving approach to exchange your assets.
  • Hardware integration – some desktop wallets might get associated with a hardware device, which allows you to perform online transactions, while keeping your coins offline.

Software Wallet Tips

There are multiple advices I would like to give you at this point, but I’ll stop by on the most important tips to always have an eye on.

  • Backup: a crucial factor when speaking of wallets. The .dat file might save your funds if something gets wrong, so backup even your backup file! You can put it on several different locations and devices as micro SD cards or USB drives and store it offline.
  • Software updates: regularly updating your wallet will let you use the latest security upgrades, which might be extremely important. So, check the social channels of your wallet and update it at any time when it has a new version. Usually, this means to delete and install it once again.
  • Scams and phishing: there are numerous malicious providers, who create fake websites, which have the exactly same interface as the original one. Always check twice before you download your wallet, otherwise all your coins might finish at someone else’s address.

Finally, what interest most of the users is exactly security and anonymity, so I suggest you think of it with priority. Social medias are also an aspect to consider – following your wallet’s channel can help you stay tuned all the time with what’s new and how to profit it.

.