March 11th, 2018
The first step for using digital currencies, is getting a Bitcoin wallet. The Bitcoin wallet is what allows you to send, receive and store Bitcoins. Having a digital wallet is the most important part of using digital currencies-without it buying or selling Bitcoins is impossible. Think of digital wallets as the personal interface to the Bitcoin network, similar to the process of how online bank accounts are an interface for the regular monetary system used today. Bitcoin wallets contain both private and public keys that allow you to spend your digital currency online. It’s the private keys that are stored and secured to give you full access to your bitcoins. The Bitcoin wallet is either an app, device, or website that manages the private keys of the Bitcoin user.
If you plan on using Bitcoin, it is important to learn the different types of Bitcoin wallets. Once you know what types of wallets there are you will be able to decide which option is ideal for you. The types of Bitcoin wallets include:
Hardware Bitcoin wallets are physical electronic devices that are built to securely protect your Bitcoins. This innovative design must be connected to a phone, tablet, or computer before Bitcoins can be sent or received. There are many popular hardware wallets available for Bitcoin users.
If you are serious about convenience and security, then hardware wallets are an ideal choice for you. Bitcoin hardware wallets are a way to keep your Bitcoin private keys safe from any vulnerable or internet connected devices. All of your important keys are maintained in a secure offline environment on the hardware wallet and are completely safe even when the device is plugged into a vulnerable device or internet connection.
Since Bitcoin is digital, cyber-criminals from around the world can potentially target your computer’s software wallet and steal important information. By using a hardware wallet, you can store private keys offline, making them completely safe from hackers. To steal your private keys, the hacker or another person would need to steal the physical hardware wallet itself. Using hardware wallets is simple and you are always able to retrieve your Bitcoins if for some reason the wallet gets lost, stolen, or damaged. Think of your Bitcoin hardware wallet like your own personal underground, steel vault. If you have a good amount of Bitcoins, a hardware wallet is the best option for you.
Hot wallets are the other type of Bitcoin wallet that runs off of internet connected devices, such as smartphones, tablets, laptops, and computers. A hot wallet generates private keys online connected to a device. Because of this, the private keys on a hot wallet are not considered 100% secure. Thinks of the hot wallet as your everyday wallet, you can use it to store cash, but you probably shouldn’t store your entire life savings in this wallet. Hot wallets are an ideal choice if you make frequent payments and are not looking for a secure storage unit for your Bitcoins.
As Bitcoin grows in popularity, more digital wallets are becoming available on the market. Choosing a wallet can be tough. Based upon your use of the digital currency you will be able to choose the best bitcoin wallet for you. If you are looking for cheap wallets for day to day transactions, then the hot wallet is just the ticket. If you want a more secure wallet for storing more money, invest in a hardware wallet.