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Types Of Bitcoin Wallets

By July 5, 2017 No Comments

Just like how you need a physical wallet to store your currency, you need a bitcoin wallet to send, receive and store the bitcoins. There are different kinds of bitcoin wallets out there. Depending on your requirements, goals and priorities, you can choose the wallet that best suits you.
Bitcoin wallets don’t store actual bitcoins. They store the private and public keys necessary for bitcoin transactions. Public keys are like your bank account number that you give people for them to make transactions to you and public key are similar to your PIN number.
The different types of wallets are broadly classified into two categories
Hot wallet refers to any online storage wallet. Bitcoins are stored on the internet and can be accessed from anywhere with an internet connection. It is less secure that cold storage wallet as your public and private key are stored on the internet and while it may be difficult for hackers to access it, it is not impossible.
Cold storage wallet is where bitcoins are stored offline. This is a more secure way to store your bitcoins as it is not susceptible to being hacked. Your public and private keys are stored offline, away from predators.
There are four types of bitcoin wallets that fall into the two categories mentioned above
 
Software (Desktop & Mobile)
This kind of bitcoin wallet requires you to download software clients to store your bitcoins. Your public and private key will be stored there. They can be accessed from the desktop/mobile even when not connected to the internet.
There are versions for desktop and for mobile platform. The desktop version may take up a lot of memory. There are also other alternatives that may not require as much memory space. The mobile version lets you manage your bitcoins on the go.
Online wallet
Online bitcoin wallets are the easiest to create and use. You can just sign up with a bitcoin exchange and create your own online wallet. They are provided by third party services and can be accessed from anywhere as long as you are connected to the internet. Belfrics is one of the trusted bitcoin exchange that offers secure bitcoin wallet with deep freeze technology.
It is advisable to store limited number of bitcoins in your online wallet as it may lure hackers. Online wallets can be compared to that of your physical wallet. You’d carry enough for transactions but not your life’s savings.
Hardware wallet
This is a kind of device wherein the key is generated when the transaction is made. It is a hardware device that is connected to the computer when in use. It is the safest way to store your bitcoins as it is not accessible by anyone but you. The device by itself can be locked with a passcode to prevent misuse.
Paper wallet
Paper wallets are a form of cold storage wallet and is just what it sounds like. You can print out the private and public keys generated on paper. This is safer than online and software wallets in that it is with you and cannot be stolen. It is, however, susceptible to problems of anything on printed paper such as being tampered with or the paper getting wet.
There are a number of providers of the various types of bitcoin wallets. Decide on what your needs and priorities are and then choose the kind of wallet best suited for you.

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