Types of Bitcoin Wallets | South Africa Today

Bitcoin is a well-known cryptocurrency. One can perform various types of bearings and surveys with this electronic money. Bitcoin is also used for trading and investment purposes. However, before you perform any operation on this cryptocurrency you have to store it. Depository of this digital money is not a tough call. Bitcoin is stored in wallets. One can store as many Bitcoins as they desire in their wallet. But do you know how many types of wallets are available and what are the features of these wallets?

This article will give you the answers to these questions. Before we directly jump on the topic let’s know in brief, what Bitcoin wallet is?

Know Bitcoin Wallet:

Bitcoin wallets are specially designed to store Bitcoins. The major purpose of electronic money wallets is to interact with a blockchain network. These wallets are developed to contemplate the security and safety of cryptocurrencies. Once you get yourself enrolled with the wallets you can skillfully store your Bitcoins in it. A bitcoin wallet needs to be compatible with the Bitcoin exchange system. So that you can be able to get the money in your wallet.

The wallets also provide a unique key to its user. By using this key, you can perform Bitcoin transactions. As long as you follow the blog then you can easily perform the transaction with the help of this private key. This cryptocurrency wallet also follows a transparency feature. With this, while performing the transaction the personal information of the users is kept safe. One has to deal with the key only performing Bitcoin-related transactions.

There are three major types of Bitcoin wallets and that being software, hardware and paper. This type of wallets is further divided into its subtypes. As the name suggests software wallets are in the form of software applications that one can install on their desktop, laptop or smartphone. This type of wallet usually requires an internet connection to perform the transaction. A hardware type of wallet is present in the hard format. These wallets present in the form of a small device which someone can use to store currency and perform the transaction. The paper wallets are the ones available in the documented format. Here users can have the paper for showing how many Bitcoins they have in their wallets.

Types of Bitcoin Wallets

The wallets are divided into different categories depending upon the way you can operate, access your Bitcoin and process the transaction.

Hot and Cold Wallets:

A wallet can be a hot wallet or cold wallet depending upon its internet connectivity. If you want a required internet connection to operate then it is a hot wallet and if your work can work on lines then it would be a cold wallet. As the hot wallets require an internet connection it becomes easy to hack. On the contrary, cold wallets are a bit safer than hot ones. Hot wallets are easy to operate and portable to carry as they are in the form of software. On the other hand, cold wallets are in the hardware or paper format which makes them tough to carry and easy to be lost.

Those who use Bitcoins regularly should always go with the hot wallet as they are easy to use. Cold wallets are the ones that you can use for heavy long term transactions. Though it is not safe to store a huge amount of Bitcoins in your cold wallet, you can certainly save a big amount of them in the cold wallet.

Mobile Wallets:

Mobile wallets are in the form of software that is compatible with your smartphones. One can easily download these wallets from the wallet website and install them same. As this type of wallets is readily available on your mobile phone it is easy to use. One can perform the transaction wherever they want with the help of these wallets. These are the types of wallets that require internet connectivity to operate. With internet connectivity, it becomes easier for viruses to attack your wallet account and mess with your private key.

Desktop Wallets:

Desktop wallets also require an internet connection to perform the transaction. Just like the mobile wallets, this one is also present in the form of software, compatible with your desktop or laptop. One can easily get the desktop wallets from the website and download the same. Once you have got the wallet you can get yourself registered and perform the transaction. As you need internet connectivity to perform Bitcoin operations it becomes easier for hackers to obtain your private key and hack your wallet. These wallets are also not very portable. If you are a trader or someone who is consistently glued upon his laptop or desktop then you can certainly go ahead with this one.

Web Wallets:

If you are looking for a wallet to perform small amounts of transactions or if you want to use it for a short span then you can put your trust in these wallets. As the name suggests this category of the wallet also requires internet connectivity to operate. These wallets are different from hot wallets when it comes to security. These wallets are the list secured once and hence users often do not trust these wallets. However, if you are in hurry and want to make a quick Bitcoin transfer you can consider this as an option

Hardware Wallets:

With the name, it is very clear that these wallets are present in the hardware format. These are available in the form of a small device in which you can store your electronic currency. Though this device can reserve Bitcoin in the offline format, it also requires an Internet connection to accomplish transactions. However your wallet gets connected to the internet only for a short interval, and the rest of the time it is offline. This feature of the hardware wallet makes it way more secure than other web-connected wallets. Moreover, you cannot carry this type of wallet everywhere and hence this one doesn’t get points in terms of ease of use.

Paper Wallets:

If you are not much into software and hardware but you need a wallet to store your Bitcoins, then these kinds of wallets should be your first preference. These wallets are available in the paper format where you perform all the documentation regarding the Bitcoins you have stored in it. Once you have done the documentation you get your private key. The rule of this wallet is very simple, every time you are willing to perform the transaction you need to have these papers with you. This also makes it a kind of wallet which is tough to carry and easy to lose. On the other hand, this one is also one of the safest Bitcoin wallets as it never requires internet connectivity, which makes it almost impossible to hack.

Final Thoughts:

There are numerous wallets available and one can pick the one as per their requirement. However, if you are willing to store your Bitcoins and looking forward to trading air you can certainly go with one of the best Bitcoin trading platforms, Bitcoin Era. With this trading software, you can effortlessly trade your Bitcoins and start a name good profits

Risk Warning:

Investing is not suitable for everyone; please ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Please conduct your own due diligence.


Source link