With the evolution of bitcoin, two things were new to people. The first word was bitcoin, and the other was blockchain; these were the two words that people were unaware of. Bitcoin is the most demanded cryptocurrency that has raised the graphs of cryptocurrencies. The cryptocurrencies like bitcoin are appreciated, and not only individuals but also government bodies take an interest in it. But before you enter the market and invest your hard-earned money into bitcoin, it is first important to learn to store bitcoins.
Unlike traditional currencies that can be stored in bank accounts, bitcoins have no physical appearance, and therefore these cannot be stored physically. Bitcoins are stored in digital wallets that don’t technically store your bitcoin. A wallet is software that stores bitcoins and allows its users to send and receive bitcoin whenever required. There is a big list of cryptocurrency wallets in the market, but before you store your coins in it, it is important to learn about wallets.
There are mainly two different types of wallets, which include hot wallets and cold wallets. It is crucial to learn that each wallet has different features and different security options. If we talk about hot and cold wallets, hot wallets are less secure, and cold wallets provide better security for a long period of time. Now, let us move forward and gain knowledge on different types of bitcoin wallets:
Different Types of Bitcoin Wallets:
As indicated by its name, a paper wallet is a document on which the public address is printed. The users need to use a public address to receive bitcoins from other addresses. The private key that is used to transfer the bitcoins is stored in a bitcoin address. These wallets are basically in QR code form, and the users can easily scan them and complete the transactions.
The best thing about a paper wallet is that it stores the keys offline, making it less vulnerable to frauds and attacks. It is still important for wallet owners to take precautions and use security measures to secure the wallet.
Desktop wallets are quite easy to use because they must be downloaded on a computer and installed. These wallets tend to store private keys on a hard drive. As compared to other wallets, desktop wallets are considered safe and protected because these don't rely on third-parties. But it is still important to connect the desktop wallet to the internet, which makes it immune to cybercriminals.
It is important to use security measures to protect your bitcoin. These types of wallets are best for users who trade only a small amount of bitcoins. Some popular types of desktop wallets include Copay, Armory, Atomic Wallet, Bitcoin Core, Exodus, and more.
Web wallets are the online wallets that store the private keys on the server. The main drawback of this wallet is that the private keys are controlled and operated by third-parties. Users need to connect to the internet accurately, or they might lose access to their wallet if a third-party gets access to your private keys.
Web wallets are highly accessible because they can be connected to the internet and used on any device. The bitcoin owners must carefully choose the web wallet, and some popular types of web wallets include Lumi Wallet, Coinbase, Circle, and more.
Users who actively use bitcoin wallet regularly and pay for goods and services with bitcoin must opt for a mobile wallet. The mobile wallet can run on any smartphone as it is compatible with both Android and iOS. The users can store their private keys on their phone and can directly pay from their phone. This is the most convenient way to transfer the funds but is immune to attacks or hacks because it must be connected to the internet. Also, it might be possible that the phone gets stolen or stop operating; in such cases, you might lose all your bitcoins.
The Bottom Line
It is crucial to choose the right wallet and use appropriate safety measures to protect your wallet from unauthorized access and cybercriminals.
I am a UK tech blogger and have been in the industry for over 10 years now, running Mighty Gadget and its sister sites and contributing to other sites around the web. I am passionate about all tech, including mobile, wearables, and home automation. I am also a fitness fanatic, so I cover as much fitness tech as possible.