Choosing the right Bitcoin Wallet: Start your Bitcoin journey

Bitcoin is thriving. 

New use cases, including non-fungible assets (Ordinals) and fungible tokens (BRC-20, Runes) are gaining traction. As Bitcoin uses expand, choosing a Bitcoin wallet becomes more difficult. That’s where we come in.See what wallet features are best for collecting Ordinals, splitting Runes, and storing Bitcoin here. Otherwise, read on to learn what a Bitcoin wallet is.

Disclaimer: Magic Eden is the world’s leading NFT and Ordinal Platform. We’ve launched Magic Eden Wallet to create a seamless collecting experience across chains. This guide takes an objective look at possible features to consider when choosing a Bitcoin Wallet.

What is a Bitcoin Wallet

Bitcoin wallets provide a place to do transactions on Bitcoin, and manage both your public and private keys. 

You will have two keys when using a Bitcoin wallet, namely a  public key and  a corresponding private key. 

You can send and receive Bitcoin (and Bitcoin assets) through your public key. The private key controls the assets of the associated public address (key). You can read more about how Bitcoin works here.

Wallets protect your private keys, facilitate transactions and can have many security, privacy, and asset-specific features.

The best Bitcoin wallet depends on what you want to do. Below, we’ve grouped possible features by some of the most popular Bitcoin activities, from hodling to collecting Ordinals.

Segregated Witness(SegWit) Support

Segwit is an upgrade released in 2017 to the Bitcoin Network. It allows separating the “witness” and transaction data. For users, this meant cheaper transactions and increased security. To support the SegWit update, wallets must:

• Generate Bech32 Addresses: Can the wallet generate Bech32 Bitcoin addresses?  These addresses start with bc1. 
• Fundamental SegWit Support: Does the wallet support SegWit transactions, including changing the fee calculation to block weight and handling the separation of the witness and transaction data?
• Legacy Address Support: Allows users to still use legacy addresses, which may be required to interact with older wallets.

Ordinals Support and Wallet Features

Ordinal Theory transformed satoshis into non-fungible tokens, creating a new asset class called Ordinals. Ordinals are Bitcoin NFTs that store their data on a single satoshi.

We've written a full guide on Ordinals here.

The right Bitcoin wallet can enhance your Ordinal experience. Look for wallets that allow you to manage, view, list, and buy Ordinals with ease.

• Native Ordinal Marketplace Integration: Does the wallet have native integration with an Ordinals Marketplace to seamlessly view, purchase, or list your Ordinals for sale? 
• View Ordinal Metadata: Does the wallet allow you to see important information, such as Ordinal attributes, satributres, and floor price?
• Inscribing Tooling: Does the wallet provide easy to use tools to inscribe Ordinals?
• UTXO Control: Can you select which UTXOs to send in a transaction?  Ordinals are inscribed on specific satoshis. UTXO management is required to send or prevent sending your Ordinals. ‍
• UTXO Labeling: Can you label your UTXOs? Labeling helps you understand which Ordinals are contained in a given UTXO.

Rare Sats Features

Rare Sats (satoshis) make use of Ordinal Theory to identify satoshis with unique characteristics. Rarity is based on how many satoshis have the same attribute. There are many classifications, but the most common way to define an attribute is related to a satoshis proximity to a key event. Here’s what you should look for in a Bitcoin wallet when it comes to Rare Sats:

• Rare Sat Identification: Does the wallet provide tooling to identify Rare Sats? 
• Rare Sat Protection: Does the wallet have safeguards to prevent accidentally sending Rare Sats in a transaction?‍
• Managing UTXOs: Some Bitcoin wallets have utility features to manage your UTXOs. Extracting UTXOs to isolate Rare Sats is essential to safeguarding satoshis you don’t want to spend

Runes and BRC-20 Support and Features

Runes and BRC-20s are the two fungible token standards on Bitcoin. The features below help buying, splitting, and selling Runes.

• Split UTXO (Split Lot sizes): Does your wallet allow you to easily split UTXOs? Runes are traded in lot sizes. If you want to sell a “partial” lot, you need to split UTXOs. ‍
• Rune / BRC-20 Visibility: Does your wallet allow you to see the data associated with your fungible assets?

Bitcoin Fee control and transactions

Transaction features cover helpful utilities in managing transactions on Bitcoin.

• Speed up Bitcoin transactions: Does the wallet allow you to speed up transactions with replace by fee or other methods? 
• UTXO Consolidation: Can you easily consolidate UTXOs? Combining UTXOs helps reduce transaction fees and simplify wallet management. ‍
• Batch (bundle) transactions: Does the wallet allow you to batch transactions to reduce Bitcoin network fees?

Security, Cold Storage, and other Hodling Features

The security features of a Bitcoin wallet are impacted by the type of wallet it is. Web, mobile, and hardware wallets each have their own set of vulnerabilities. 

• Cold storage: Does your wallet allow you to disconnect from the Bitcoin network? Cold storage is the highest protection against computer vulnerabilities. 
• Multi-signature: Does your wallet enable multi-signature? Multi-signiture (multi-sig) safeguards against vulnerabilities by mandating more than one approved signature must sign the transaction. 
• Backup and Recovery features: Does your wallet have recovery options in case of computer or human failure?‍
• Privacy features: Privacy features minimize the information that is broadcasted on the Bitcoin network and help keep your transactions private. Examples include rotating addresses, not disclosing information to nodes, and using Tor or other proxy servers.

On-Ramping Wallet Features

On-ramping features are the ways that you deposit funds to your wallet address. All wallets support receiving Bitcoin, but some wallets have additional on-ramping features.

• On-Ramp Service Integration: Does your wallet allow you to buy Bitcoin with fiat? Typically wallets that support this feature will partner with third party services like Ramp or Moonpay. ‍
• Swap Integration: Does your wallet allow you to buy Bitcoin with other cryptocurrencies?

Cross-Chain Support and Features

Cross-chain features are extremely useful in simplifying asset management. 

• Multiple chain support: Does your wallet support the chains you care about? 
• Multi-chain portfolio management: Can you view your portfolio across chains? 
• Cross-chain bridge integration: Does your wallet support bridging assets from one chain to another?

Final Thoughts

Bitcoin is quickly expanding. Each use case is best served by a different feature set. For example, Magic Eden’s Bitcoin Wallet is optimized for Ordinal collecting and cross-chain experiences. We’ve invested heavily in Rare Sat, Ordinal, and Cross-Chain features (check out Magic Eden Wallet here!).

Other wallets have different optimizations. With this overview, you can choose the best Bitcoin wallet for you, whether you want to use Bitcon for payments, storage, or collecting.