Picking up which BTC wallet to use for mining profits

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As an almost complete rookie in the Bitcoin and mining world, I needed to decide which BTC wallet for mining to use to store all the mined Bitcoins. There are 3 main options to choose from:

  1. Exchange (eg Coinbase)
  2. Online/mobile app wallet
  3. Hardware wallet

Exchange (eg Coinbase)

I can have my mining proceeds sent directly to my Coinbase account and just keep it there until I feel like selling BTC. And then I can keep the cash in Coinbase, or simply move it to my bank account. The biggest advantage I see here is the simplicity – I can just do whatever I need with the mined BTC in my Coinbase account. 

The disadvantage seems to be security. If Coinbase gets hacked, then I am screwed. If USA decides that people can’t trade BTC, I am screwed. If my account gets hacked because I am not securing it properly, I will lose all my BTC. Honestly I don’t think there is too big of a change of the first 2 things happening. But I believe the chances of someone trying to hack my account are not small. Especially if this blog ever picks up and gets somewhat popular. I have 2-step verification for Coinbase, and I feel it is kind of secure, but the risk is just there. 

Online/mobile app wallets 

There is plenty of these wallets, like Bluewallet. I did not do too much research into these. I feel like they are OK for small amounts of BTC, but this is the biggest investment I made in my life and I don’t feel safe using one of these for this business. 

Hardware wallet

By many out there, this is the safest way to store your Bitcoins. Hardware wallets like Ledger and Trezor are very hard to hack and a lot of the security is up to the final user – me. Your wallet comes with a 24 seed phrase, which you need to store somewhere safe and preferably offline.  If you lose this phrase, or someone gets access to it, your bitcoins are gone. What I like about this is that I have almost complete control of my BTC. However if I ever lose the piece of hardware, or it resets or gets damaged then I am going to need my seed phrase to recover the wallet. And if I lose it – which knowing me is not impossible – then I lose all my Bitcoins. 

 

So which wallet did I end up choosing? I am going to go with Hardware wallet Ledger. I just like to keep things under control. I need to decide where and how to store a seed phrase safely. With that being said, I will write a follow up post if I decide to change my mind

1 thought on “Picking up which BTC wallet to use for mining profits”

  1. I’m running a full Bitcoin node on PC/Macs and using the wallet capability to store mined BTC. Full control, and have wallet backup on multiple devices along with private keys for each btc address stored offline. Bitcoin Core UI requires a passphrase to send your bitcoins, which is separate from the private keys associated with each btc address, so there is that extra layer of protection.

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