This short section will teach you how Bitcoin wallets work and will explore the main features and types of Bitcoin wallets.
Understanding how Bitcoin wallets work
Cryptocurrencies like Bitcoin need specialized wallets. This because of their digital nature and the necessity to store information, instead of tangible objects.
In essence, Bitcoins are representations of value on the Blockchain.
You can access this information with two unique codes:
- The Private Key – to access and use your Bitcoins.
- The Public Key – to receive and request Bitcoins.
So Bitcoin wallets do not literally store your coins but, instead, create a secure access point that allows you to access them on the blockchain.
What are the different types of Bitcoin wallets?
There are five main types of Bitcoin wallets. Each of them has different features and security measures.
- Online wallets – these allow users to access their Bitcoin through a web browser. Keep in mind that they are the most vulnerable to malicious intent.
- Mobile and Desktop wallets – these wallets can be installed on a smartphone or PC, making that device the unique point of access to your Bitcoins.
- Hardware Wallets – these are specialized physical devices that are specifically built for the highest levels of cryptographic security.
- Paper Wallets – these are printed pieces of paper with your wallet credentials. They make an excellent option for offline storage.
How can I choose a Bitcoin wallet?
There are three main aspects that you should consider when choosing your Bitcoin wallet:
For example, online wallets offer great accessibility and are free to use, but at the same time, their very nature makes them more vulnerable to hacking attempts.
Luckily, we have a complete list of the best Bitcoin wallets on the market that you can choose from. Make sure you check it out before making your decision.