By now you should know that Bitcoin is not like most traditional currencies. So the approach of acquiring and storing this digital currency is completely different. Like physical money, where you use a bank account to store it, you also need a place to store your Bitcoin. This is called a wallet. Similarly to the bank account mentioned earlier, your wallet lets you send, receive, and store bitcoins. It holds a private key that allows you to access your Bitcoin address. There are different types of Bitcoin wallets that cater for different requirements and users’ specific needs. In this article, we’ll discuss different types of wallets and their features. And hopefully, you can choose best crypto wallets that can suit you.
Hot and Cold Crypto Wallets
It’s important to remember that Bitcoin wallets can be classified as either hot or cold. So, what’s the difference between the two? A hot wallet is an online wallet that can be used when you’re connected to the Internet. As for its cold counterpart, it can be used offline and is disconnected from the Internet.
Generally, hot wallets are easier to set up and access. However, this makes them more susceptible to hackers and other technical vulnerabilities. To the contrary, a cold wallet, not being connected to the Internet, is more secure and thus is recommended for storing large amounts of Bitcoin. Think of it this way: a hot wallet is our pocket wallet you can bring anywhere, while you cold wallet is like your bank vault that’s too valuable to carry with you all the time.
Types of Bitcoin Wallets
So, there are several different types of Bitcoin wallets catering for different needs in terms of security, convenience, accessibility, and so on.
Paper wallets are printed documents which contain a public address and a private key. The public address is used to receive digital coins. The private key, on the other hand, allows you to spend or transfer bitcoins stored at that address. The main advantage of this type of crypto wallet is that the keys are not stored digitally anywhere. This makes it immune to hacker attacks, malware, and basically any form of digital theft. And one thing you should know if you consider availing yourself of a paper wallet. To be able to spend money from this type of wallet, you need to transfer the funds to a software wallet first, to do the so-called “sweeping.” Note that you can exchange, sell, and trade your Bitcoin using reliable exchanges. But what exchanges can be considered reliable and trustworthy? Go to Changevisor.com, the platform that can match you up with the best and most secure exchanges.
Hardware wallet is a unique cold storage type of Bitcoin wallet that stores the users’ private keys in a storage hardware device. It’s rightly considered the most secure way of storing any amount of your hard earned Bitcoin, since they are offline and generate the keys on the device.
Another is a desktop wallet. This is designed to be downloaded and installed on laptops and PCs for storing your private keys on your hard drive. The desktop software gives you complete control over your digital gold, meaning you don’t have to trust any third party to lose or steal it.
If you’re actively using Bitcoin on a daily basis, then the mobile wallet might be for you. A mobile Bitcoin wallet is an essential tool running as an app on your smartphone or any other portable device. With this type of wallet, you can easily store your private keys and pay for different things directly in your smartphone. Sounds good! But note, despite being a convenient on-the-go solution for Bitcoin storage, mobile wallets are very prone to hacker attacks.
Online wallets are the easiest to use among all different types of hot wallets. Generally, you can access your Bitcoin from any device, if you have the right passwords and Internet connection. There are many third-party wallet service companies that let you store your private keys. The wallets on these platforms allow their users to access their funds on the go.
That’s everything you need to know about Bitcoin wallets. Now it’s about time you took your pick!