If you are considering entering the exciting bitcoin industry, getting a bitcoin wallet is the first step towards your success. By definition, a wallet is a place where you can actually hold your bitcoin and easily transact with buyers and sellers. It holds a private key that gives you access to your bitcoin address, also known as your public key.
A wallet can hold several private keys and you are free to have several wallets as a bitcoin investor. Most wallet softwares are well designed, making bitcoin more convenient and intuitive to use. These wallets can live online (software wallet), on a paper or on physical gadgets (hardware Wallets). Here are various types of wallets that exist:
- Electronic wallets
This type of wallets can be cloud hosted or downloaded in software. The hosted wallets have an intuitive and user-friendly interface, but it requires you to trust another person with your private keys. On the other hand, the downloaded wallet software relies on a file that stays on your computer or any other device that can facilitate transactions. Some software may a bit challenging to use, but it’s more secure than the cloud-based.
- Mobile Wallets
Mobile Bitcoin wallets are simply applications that you can install on your Smartphone and use it to transact in bitcoin shops. It allows you to keep track of your currency, sell, buy and transfer them while on the go. Luckily, you can easily find a wallet created for mobile users like Bread, Abra and many others.
- Paper Wallets
Ideal for long-term storage of your digital currency, paper wallets are the simplest type of bitcoin wallet that exists. They are simply a piece of printed paper that contains all your private and public keys, allowing you to securely retain your bitcoins in a safe environment. However, you risk losing your money if the paper is stolen, misplaced or destroyed.
Paper Wallets are the best choice for you if you want to give bitcoins as a gift. They are secure in the sense that no one can access them remotely and you don’t have to worry about losing your currency if you get hacked. You can also easily send them to a secure address and transfer them without any trouble.
- Hardware wallets
Hardware wallets are uniquely designed devices that allow you to occasionally connect to the internet and initiate bitcoin transactions. This type of wallets highly secure and they practically live offline. This means that they cannot be hacked or accessed remotely. However, you will lose your bitcoin if the wallet is lost or stolen. Luckily, you can store them in a bank or any other secure place.
Selecting a Bitcoin Wallet
Once you know what it is that you need to use your digital currencies for, the next step involves selecting the best wallet. Move to secure your wallet, invest in a lock and key system that will make wallet encryption easier for you but a nightmare for any unauthorized parties.