Types of Bitcoin Wallet
Since bitcoin is a digital currency, when it comes to storing it, you are going to need something a little different to your everyday wallet! Bitcoin doesn’t exist in any physical form, so you can’t keep it in your pocket and use it when you need to, rather it has to be stored somewhere. Private encrypted keys are used to access the public bitcoin address that you have to use to pay for goods and services. In order to complete a transaction, you need your private key and the recipient’s public key. When it comes to storing your bitcoin, you will need a wallet, and there are several types to choose from.
Paper Wallet
A paper wallet can be used when you buy bitcoins to keep them safe. A paper wallet is actually a document that contains your public address so that you can receive additional bitcoins, as well as your private key so that you can spend your bitcoins. The keys are usually found in the form of QR codes so that they can quickly and easily be scanned and used. The advantage of using a paper wallet is that the keys are not stored online and are therefore not going to be subject to hacking attempts. However, when you create a paper wallet, you need to ensure that it is kept entirely safe and secure because should it fall into the wrong hands or become unreadable, your bitcoin will be lost.
Mobile Wallet
If you are using your bitcoin on a daily basis, then a mobile wallet may be best for you. That way, you can use your smartphone to pay for goods and services in stores with bitcoin. To do this, you need to download an app that allows you to both store and use your bitcoins. You may even be able to simply tap your phone against a special reader and spend money that way, meaning you don’t have to physically hand over your public key. Although this is the most convenient method of using and storing bitcoins, it is the most vulnerable to attack as well. If someone were to steal or find your smartphone and gain access, they could spend your bitcoin without being traced.
Web Wallet
The web wallet is probably what you initially think of when it comes to storing your bitcoins safely and securely. Web wallets keep your private key on a server which is always online but is controlled by someone else. This shouldn’t be a problem but is something to be aware of. There are many different web wallets available, and each one offers its own set of features and benefits, so you will need to think carefully about which wallet you want to sign up for. Take a look at what it offers and see if it matches with what you are looking for in a wallet.
Hardware Wallets
A hardware wallet stores the private keys on a secure piece of hardware, as the name suggests. Although it may not sound particularly secure, it is known to be the most secure way of storing your bitcoins because there have been no incidents of any money being stolen from this kind of wallet. Not only that, but hardware wallets are not subject to viruses or breakdowns, and their software tends to be open source.
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