The Bitcoin Wallet is a secured place to receive Bitcoins, store them and to send Bitcoins to others. Simply, Bitcoin wallet is a software program where Bitcoins will be stored. The Bitcoin wallets are divided on two basis – software wallet and web wallet. The software wallet can be installed on your computer or mobile device. Another type is Web Wallet, which will be hosted by the third party and they are easier to use. While using web wallet, you have to trust the provider to provide high levels of security to protect your Bitcoins.
Types of Bitcoin Wallets
Bitcoins are a current equivalent of cash and the value of Bitcoin increases day by day. We already know how Bitcoins are generated and how the Bitcoin transactions work. Usually, five different type of Bitcoin Wallets is used to send and receive bitcoins.
Paper wallets: Paper Wallets are the popular and cheapest options to keep your Bitcoins with safe. There are a lot of sites offer paper Bitcoin wallet services. They will generate a Bitcoin address for you and create an image containing two QR codes. The first will be a public address which you can use to receive bitcoins, and another will be the private key which will be used to spend bitcoins at that address. The main benefit in using paper wallet is that private keys will not be stored anywhere. Hence it will not subject to any cyber attacks or hardware failures.
Hardware wallets: Currently, the Hardware Bitcoin wallets are very limited in number. Hardware wallets are dedicated devices that will hold the private keys electronically and facilitate Bitcoin payments. Mycelium, Cryptolabs, Ledger Nano, SatoshiLabs Trezor, KeepKey, and BitStash are some of the hardware wallets that are available right now.
Online wallets: The online wallets or web-based wallets will store your private keys in online, on a computer which is controlled by someone else and connected to the internet. You can access theses services from anywhere regardless of what device you are using. The significant disadvantage in using online wallet is that, if you implemented wrongly, they would put the organisation running the site in charge of your private keys. It means they will take your Bitcoins out of your control.
Mobile wallets: Nowadays, we use smartphones for most of the works and Bitcoin wallets are tailored for your Smartphone to save your Bitcoins with ease. The QR code in mobile wallets will enable the instant payments feature. Mycelium and Blockchain apps are the top mobile wallets available on both Android and IOS.
Desktop wallets: MultiBit, Bitcoin Core, Hive, Armory, and Electrum are the top desktop Bitcoin wallets that are currently available. Each of them has specific features which allow the users to sell, buy, exchange and stock cryptocurrency. These desktop wallets will be known as the mix between the bank account and an email address. They are the safest Bitcoin wallet among other Bitcoin wallets.
Are Bitcoin wallets safe?
Bitcoins is entirely anonymous, and it is totally transparent and trackable. Due to this, Bitcoins are considered as pseudonymous. The safety of Bitcoin Wallets depends on how you manage them. The private keys stored in the wallet is the only way to access the transaction data stored in a Bitcoin address. If you lose them, you will lose your Bitcoins.
How to choose Bitcoin Wallet?
The Bitcoin wallets will vary by security, and you have to decide where you want to be on that scale. For Bitcoin transactions, the Bitcoin Wallet will be chosen on the following basis
- How frequently will you use the wallet?
- Can you afford to pay for a hardware wallet?
- How many Bitcoins will you be storing?
- How frequently will you use the wallet?
- Do you need to carry the wallet around with you?
- Do you need to share the wallet with someone else?
- How much do you value your privacy?
- Do you trust yourself to safeguard your wallet or do you want to give some 3rd party the task of doing so?
How to Secure Bitcoin Wallet?
The main way to secure the Bitcoin Wallet is by protecting your wallet with a strong password. You can use lowercase letters, uppercase letters, numbers and symbols to make the password stronger. Always back up your private keys to avoid the loss of private keys when you mislay the wallet or if wallet gets corrupted. If you are nervous to store Bitcoins in offline, then use the Cold storage wallets. They will store the private keys in the offline so that they can’t be stolen by someone else on the Internet.
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