A Bitcoin wallet is a program that enables one to store his/her Bitcoins. Bitcoins unlike cash, cannot be stored anywhere. Generally, what happens, Every Bitcoin address comes with a private key or a secret number. The key is the one that is saved and stored in a Bitcoin wallet. Hence, a Bitcoin wallet is a collection of user’s private keys that corresponds to addresses.
Bitcoin wallet is a digital wallet that enables one to access, send and receive digital money. Furthermore, it also allows one, which is the user, to monitor and keep track of the available balance. Wallets, in addition, also enables one to keep a history of transactions made. Via Bitcoin wallet, one can easily access one’s Bitcoin address and authorize a transaction.
A Bitcoin address is like a bank account. It’s a unique 26 to 35 digit alphanumeric that starts with 1 or 3. A Bitcoin address is used while adding and also receiving Bitcoins to your account. Bitcoin wallet address can also be in the form of a QR code that one can scan to send Bitcoins to your wallet. An address is a Bitcoin public key to which a transaction can be sent.
Since Bitcoins cannot be stored anywhere, they run on Blockchain. A wallet is needed to access the digital coins. Through a wallet, one can easily access one’s coins via private and public keys. While a public key is used to receive Bitcoins, a private key is like a password used to send Bitcoins. Hence there’s need to provide the best security for one’s private keys. This is because if compromised, one can end up losing all coins. Therefore, one should choose the best wallet that provides the best security measures for your digital coins.
Types of Bitcoin wallets
Bitcoin wallets comes in many forms.
- Hardware wallets
- Paper wallets
- Desktop wallets
- Online or web wallets
- Mobile wallets
- SMS wallets
Hardware Bitcoin Wallet
Hardware wallets are also known as cold wallets. They provide a storage of Bitcoins in a hardware device, hence physical cryptocurrency wallet. These wallets provides the best security as they never gets in contact with the internet directly. They store the private keys in an offline setting. Furthermore, they generate the private keys and digital signatures to authorize Bitcoin transactions.
The wallets provides the top and enhanced security for storing large amounts of Bitcoins, long term savings as well as for your day to day usage. This is because hardware wallets enables the user to have full control of the private keys, hence full control over your money.
Hardware wallets works well together with other wallets such as mobile, desktop and web wallet. In addition, they also supports all major digital currencies.
The best hardware wallet includes;
Paper Bitcoin Wallet
A paper wallet is a wallet made of paper. It contains both the private key and public key printed on it inform of QR. It’s a very secure offline wallet. This is because it’s not exposed to hackers and also to malware or viruses.
Bitcoin paper wallet is very easy to create, store and carry around. Furthermore, the user can easily send or pay via Bitcoins without using a software wallet.
A paper wallet is ideal for large amounts of Bitcoins meant for investment purposes.
Desktop Bitcoin wallet
A desktop wallet is also known as a software wallet. It’s an app installed in the computer. This means that they store and save the private key of your Bitcoin in the hard drive of your computer. Since they get connected to the internet, they hence get exposed to some of the risky factors. It’s very important to protect access to your desktop wallet with a password. Therefore, not very safe for large amounts for Bitcoins. But very convenient for small amounts of Bitcoins for daily usage.
The best desktop wallets includes;
- Bitcoin Core
Online or web Bitcoin wallet
Online or web wallets run just like accounts. It’s a wallet connected to a web service. The wallet can be retrieved from any internet connected device. Hence a user gets to set a password that is used to encrypt the wallet. Web wallets provides the least secure option since of their vulnerability to hackers. Therefore if one must have one, its best to treat it as cash in your pocket. That is for daily usage and not for saving purposes.
best online or web wallets includes;
Mobile Bitcoin wallet
Bitcoin mobile wallets enables Bitcoins transactions on the go. A mobile wallet is more secure than a web wallet since they store the private key on the user’s phone. It’s also least secure as the phone could be stolen, lost or damaged, hence a 2 factor authentication, password and a backup is very important.
Best mobile wallets includes;
SMS based Bitcoin wallet
A SMS wallet is a wallet that enables the Bitcoin user to manage his/her Bitcoins via a SMS. Such includes;
While selecting a Bitcoin wallet, its best to consider the most secure wallet to store your Bitcoins. One should also decide on the wallet to use based on the purpose of that wallet. It could either be for investment purposes or for daily transactions.
In order to provide the best security of your Bitcoin wallet, one should provide a backup for your wallet. Also one should provide a multi-signature, Update software and encrypt the wallet.
Hardware wallets provides the top best security of your Bitcoins. This is because being an offline wallet it cannot be hacked nor can it be exposed to viruses and malware. Furthermore, it provides very high security features making it the most secure way to store any cryptocurrency. In addition, paper wallets also provides high security as long it’s kept safely and not exposed to anyone.
It’s important to do a thorough research on a wallet before saving your Bitcoins in it. Always choose a Bitcoin wallet that best suits your needs. That is after getting and accumulating Bitcoins, you will need a good and secure wallet to store them.