The first step to using a bitcoin is obviously to obtain a Bitcoin wallet address. Without it, you can’t send, receive or store bitcoins. So before you get bitcoins, you’ll have to buy, download or create a bitcoin wallet.
Your wallet acts as a personal interface to the Bitcoin network, which stores private keys that give you access to the bitcoins.
A Bitcoin wallet is basically an app, device or website that controls your private keys.
Different Types of Wallets:
There are different ways to use Bitcoins, so there are different types of Bitcoin wallets as well.
- Online wallets – these can be accessed on the web from any Internet connected device.
- Bitcoin hardware wallets – these are physical devices designed to store bitcoins.
- Software wallets – these are applications that can be downloaded to your phone, computer or tablet.
- Paper wallets – these are bitcoin private keys that are printed on paper from a computer.
Wallets secure funds by protecting our private keys.
Let’s discuss these types in a bit more detail.
Also known as Hot wallets are basically bitcoin wallets that are accessible on internet connected devices like mobile phones, tablets, and computers.
They can be accessed using a user-set password and store your private keys on the web.
Eg: – GreenAddress and SpectroCoin
The advantage of using online bitcoin wallets is that they can be accessed from anywhere in the world and are best of regular or frequent transactions. Although, it isn’t the best idea if you’re planning on storing your bitcoins for the long term. There is an issue with the security since the private key is entrusted to an online service, there could be a scenario where the whole database of the service would get hacked and you’d have to say goodbye to your holdings or the service gets hold of your account.
Thus, it is recommended that you opt for online wallets when it comes to more frequent transactions.
These are physical devices built to generate bitcoin private keys offline. They keep private keys separate from internet connected devices and they are maintained in a secure offline environment.
The best and most popular BTC hardware wallets:
- Ledger Nano S
Hardware wallets are definitely a good choice if you’re considering factors like security and reliable storage of bitcoin. By generating private keys offline, you are able to ensure that hackers cannot access your bitcoins.
Even if the device ends up getting stolen it can be protected using a backup PIN code.
These are designed to be installed in computers and laptops. Only you will have access to the private keys that store your bitcoins.
Bitcoin Armory is the most secure, popular and stable software wallet.
One of the safest ways to store bitcoins are Paper wallets, especially if you’re planning on keeping them for the long term. It basically involves printing the Bitcoin address and private key on a piece of paper.
These are a variety of options for you to choose from. It is your decision to choose what you find suitable for the storage of your coins.