Nowadays, we are fortunate to have a myriad of tools at our disposal to improve and facilitate our use of Bitcoin. In this article, I want to share with you a selection of the best tools that I use on a daily basis. I am going to detail how they are useful and why using them could be beneficial for you.
Hot Bitcoin wallets
A hot wallet, or software wallet, refers to Bitcoin wallet software installed on a multi-purpose device such as a computer or smartphone. This software keeps your private keys directly on the device, increasing the risk of hacking in case the machine is compromised. It is therefore recommended not to store large quantities of bitcoins there. Despite this risk, hot wallets are very practical for Bitcoin users: they allow transactions to be executed quickly, including on the go, and offer more flexibility than hardware wallets.
There is a multitude of hot wallet software out there, available for both computers and smartphones. On PC, Sparrow Wallet is probably one of the most complete programs out there. For smartphones, I often recommend the app Blockstream Green for beginners.
Cold Bitcoin wallets
The cold wallet, or hardware wallet, is a computing device whose functionalities are exclusively limited to the use of a Bitcoin wallet. These devices are not connected to the Internet and have a minimal attack surface in order to reduce the risk of hacking. There is a wide variety of hardware wallets on the market and each has its own pros and cons. To find out more, I advise you to discover our complete comparison of the best Bitcoin hardware wallets of the moment.
To use your hardware wallet, you will need portfolio management software. This tool, often installed on your PC, allows you to create transactions that will then be sent to the device to be signed. If you're just starting out, you might consider using software provided by your hardware wallet manufacturer, such as Ledger Live or Trezor Suite. However, these programs have some limitations in terms of functionality. For more experienced users, I strongly recommend using the hardware wallet with specialized Bitcoin management software. The most complete is Sparrow Wallet, but Specter Desktop is also a good alternative. In another field, I also like the software Liana, which makes full use of Miniscript to develop advanced and customized security strategies.
Watch only wallets
A “watch only” wallet is a software that allows you to consult the balance and track the transactions of a Bitcoin wallet, without however offering the possibility of spending the associated bitcoins. For this, the software only uses your xpub, which reveals all your reception addresses without giving access to the corresponding private keys. In addition to monitoring your funds, this application allows you to generate receiving addresses without directly accessing your wallet. The watch only wallet is particularly practical for those who use a hardware wallet, as it offers the possibility of monitoring the wallet, without risking having the private keys hacked.
Sentinel used to be the best watch only wallet. However, it now requires the use of a full dojo node to function, which is not suitable for beginners. For those looking for an alternative, Blue Wallet may be considered. While not exclusively a watch only wallet, Blue Wallet also includes this feature. This application is much easier to use.
Another possibility is to use applications provided by hardware wallet manufacturers. If you have a Trezor Or a Ledger, be aware that there are watch only wallet applications that are specifically designed for these devices.
Lightning wallets
During periods of high fees on the Bitcoin blockchain, executing a transaction can become very expensive. This is why it can be interesting to have some satoshis on the Lightning Network, a secondary layer that allows bitcoin payments to be made outside the main chain. On Lightning, settlements are instant and transaction fees are low.
The best way to use Lightning is to set up your own node and open channels yourself with other network participants. Once complex, setting up a Lightning node has become more accessible thanks to some software adapted to beginners. For example, if you have a Bitcoin node Umbrel, you can launch a Lightning node simply by downloading the LND app.
To have channels and incoming cash, there are platforms like LN+ that make it easier to connect with other users with similar needs. They allow you to quickly have a well-connected node so that you can make payments without a hitch. To have mobile access to your Lightning node, I recommend that you synchronize it with the application zeus on your smartphone.
While this setup requires more effort than a custodial Lightning wallet, once set up, it requires little maintenance and offers you the major advantage of maintaining total control over your bitcoins.
If you don't want to set up a Lightning node or don't have a Bitcoin node, the Phoenix app could be a great option for you. Developed by Acinq, a French company, Phoenix allows you to spend your bitcoins via the Lightning network while saving you the complexity of managing a node. This application offers a simplified and accessible approach to using Lightning while maintaining control over your bitcoin.
Backup and recovery tools
When you choose to secure your bitcoins yourself in self-custody, you become 100% responsible for your funds. It is therefore essential to take care of their security, and this includes managing your recovery sentence. This information, often consisting of 12 or 24 words, makes it possible to regenerate all the cryptographic keys in your wallet, which gives direct access to your bitcoins. It is very useful in case of loss of your phone or hardware wallet, but also represents a point of vulnerability in your security strategy. It is therefore imperative to choose an adequate storage medium for it.
For wallets that contain a small amount of bitcoin, simple paper storage may suffice. However, for high-value portfolios, it is advisable to engrave this sentence on a metal support for better resistance to various hazards. I reassure you, to get this type of metal support, you do not need to break the bank. Here are two affordable options, depending on your preferences:
The technique of” SAFU Ninja ”: Ideal for do-it-yourselfers, this method involves engraving the words on metal washers and assembling them onto a bolt (with a nut and a threaded rod). Each puck has one word from your sentence, numbered in order. This material can easily be found in hardware stores at a low cost;
The plates of Hodlinox : For a more robust solution, Hodlinox plates are an option that I recommend. Made of thick stainless steel, they are resistant to high temperatures and corrosion. They are available on their website for about ten dollars. I especially like this option, as these plates are among the cheapest with the highest ratings in The Jameson Lopp Stress Test.
To engrave your sentence on this type of plate, you can use punches or an engraving pen.
Bitcoin block explorers
A block explorer is a tool, often accessible online on the web or locally on a Bitcoin node. Its function is to make Bitcoin blockchain data more easily understandable. This tool transforms the raw information from a Bitcoin node into an organized and readable format, making it easier for the user to understand it. Explorers generally include a search engine to find specific transactions, addresses, or blocks.
The block explorer is an essential tool for any user, as it allows them to optimize and analyze their use of Bitcoin. It is particularly useful when making a transaction, to adjust it according to the current fee market, to track its inclusion in a block, and to observe its confirmations.
There are a multitude of block explorers out there, each with their own pros and cons. For my part, I mainly use Mempool.space on a daily basis for general tasks. This explorer should meet the majority of your needs. Bitcoin Explorer and Blockstream Explorer are also good alternatives.
The Bitcoin protocol is just a set of unspoken rules. To implement these rules, there are various software programs. The best known is Bitcoin Core, because it represents 99% of the nodes on the network. This preponderance leads us to consider Bitcoin Core as a factual representation of the Bitcoin protocol itself. To make your own Bitcoin node, it is therefore possible to install the Bitcoin Core software directly. In fact, we made a tutorial to explain how to do it: ➤ How do you set up your own Bitcoin Core node?
Since Bitcoin Core is an open-source project, there are also other software, often more complete or easier to use, that integrates Core with other tools. Personally, I use Ronin Dojo, which is only focused on the Bitcoin main chain, and offers advanced options, including for privacy. I also use Umbrel, especially for my Lightning node. Originally designed as a Bitcoin node implementation, Umbrel has evolved into a small, multi-purpose home server. It includes numerous applications both in the field of Bitcoin and for daily life. Among the other existing software, there is also Nodl, Start9, Citadel, MyNode and RaspiBlitz.
All these solutions offer you what are called “node-in-a-box”, that is to say machines with the software pre-installed, ready to use. These options are great for beginners, but they are often expensive. An alternative is to acquire your own computer hardware and manually install the software of your choice on it. It's a bit more complex, but it's also a lot cheaper.
The equipment to install a Bitcoin node
To set up your own Bitcoin node, it is possible to do it on your regular computer, but this method has some disadvantages. A more appropriate option would be to use a dedicated device. So what type of machine should you choose?
The common recommendation is to buy a nano-computer such as a Raspberry Pi or a RockPro64. They are small devices, about the size of a bank card, that are energy efficient. However, although they are practical, these nano-computers can sometimes have a poor quality/price ratio.
An interesting alternative is the acquisition of a barebone or a mini-PC (sometimes referred to as a “NUC”, in reference to Intel models). These computers, which are slightly larger than a nano-computer, generally have a more efficient processor and are modular. For example, you can increase the RAM according to your needs. If you plan to set up a Lightning node or use a lot of applications on Umbrel, this option will give you more convenience. In addition, some barebones are available at very affordable prices on the second-hand market.
It is also possible to use an old laptop or to acquire a used one. The advantage of the laptop lies in its integrated screen, which makes it easy to set up the node without requiring a connection to another device. In addition, thanks to its battery, the laptop allows the node to remain operational even in the event of a power outage.
For all these options, I generally recommend installing Debian 12, as it is a very stable, complete and optimized operating system for servers.
Conclusion
In my opinion, these tools that I mentioned are essential for the easy and optimized use of Bitcoin. They make our experience more fluid and accessible. Many of these programs are free and FOSS (Free Open-Source Software). If you find these tools beneficial to you, I encourage you to support the developers who built them, either through donations or by using the associated paid services. The open-source spirit is at the heart of Bitcoin, but funding it remains a challenge. Your contribution can therefore play a crucial role in the sustainability and evolution of these projects.
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