If you’ve ever considered buying or trading Bitcoin, the first thing you probably checked out was the price and how to buy the Bitcoin in the first place. But there’s more to Bitcoin than that, and your choice of wallet can easily determine how well you fare on the decentralized Bitcoin market.
While there are many Bitcoin wallet options, most of them have their benefits and drawbacks. This article will show you how an online Bitcoin wallet can jump-start your crypto trading and make it more straightforward.
What Is an Online Bitcoin Wallet?
While there are a few different Bitcoin wallet types, the main difference lies between how they’re stored and accessed.
Physical Bitcoin wallets are very similar to the actual ones, with some additional precautions. You store the keys on a piece of paper or plastic and then use them to transfer the currency from the wallet to another account. It might sound simple, but it gets a bit trickier. While physical wallets are the most secure of the lot (unless you lose your keys), it can be tedious to access your funds for regular purchases or withdrawals.
Desktop and mobile wallets are the middle ground. While they store Bitcoin on the device, it is protected by encryption methods, and you can use a client to access and trade Bitcoin using the wallet’s keys. Mobile wallets have the advantage of allowing near-field communication for day-to-day transactions but are more prone to hacks, theft, or getting lost.
An online Bitcoin wallet, otherwise known as a web wallet, doesn’t use your personal device to store data. Your information and keys remain on a third-party server. This poses a security risk, as you lack any real control over the data. However, web wallets have intuitive user interfaces and you can access your account from any device connected to the internet.
How Useful Is an Online Bitcoin Wallet?
Considering a web wallet needs an internet connection, you can’t use it as long-term or cold storage. Well, you can, but the increased security risk makes them unsuitable for the task. If you want to purchase a large amount of Bitcoin and store them to gain value over time, a cold-storage method such as a physical wallet is better since it’s unlikely to get lost or hacked.
An online Bitcoin wallet is best used as hot storage. You can access it frequently and make a large number of smaller transactions. When you’ve accumulated enough Bitcoin you want to save, you can make a new cold wallet later and transfer the funds over for safekeeping.
Additionally, a web wallet doesn’t have to store only Bitcoin. While it is a significant part of crypto trading, other currencies have a market share that shouldn’t be overlooked. If you get a well-designed, secure online Bitcoin wallet, you might be able to easily trade in multiple currencies at once, giving you an overview of trends and teaching you more about trading in the process.
Is an Online Bitcoin Wallet Free?
The price of web wallets can differ between providers, but some open-source, and even private, wallets can be free to open. They operate on transaction fees, so beware of high costs, which should be prominently displayed on the provider’s web-pages.
Paying for a web wallet is perfectly acceptable if you’ve done the research and know the company is secure, and you can trust it with your crypto and fiat currency.
Starting With an Online Bitcoin Wallet
Different wallets will have a trade-off between accessibility, usability, security, and the types of storage you can use. The skillsets for crypto and regular trading differ, so any previous investing experience doesn’t make you an instant expert in cryptocurrencies. Therefore, you might be best off using a web wallet to access your Bitcoin (and other currencies) quickly and make changes at a moment’s notice.
While web wallets aren’t the most secure of the bunch, modern safety protocols and integration methods make an online Bitcoin wallet a perfect choice for someone just starting their crypto trading journey.