Bitcoin is a virtual digital currency, which means it doesn’t exist physically and cannot be stored in banks like traditional currencies. The bitcoins are stored in digital wallets, commonly referred to as bitcoin wallets. The bitcoin wallet doesn’t technically store the bitcoins but stores them on the cloud. The wallet’s private keys are used to access the transaction signatures and bitcoin addresses that are required to be stored carefully. The public key and private key of bitcoin wallets can make a transaction possible. Read on to find an ultimate guide about the various types of Bitcoin Wallets.
The bitcoin wallets are not like bank accounts as they don’t necessitate use to share his/her sensitive personal information. The user only requires to save the private key as if the private key, once lost, can never be recovered. There are numerous types of Bitcoin Wallets available in the market that fulfill different needs and requirements of users. It is important to choose the wallet wisely as it can add you to the list of qrius.com. So, you must choose the one that is best in terms of accessibility, convenience, and security.
Let us move forward and upgrade our knowledge about the various types of Bitcoin Wallets, which are as follows:
In simple words, a paper wallet is a document that stores the bitcoin address and private key, which are used to send and receive bitcoins. It is quite simple to use a paper wallet as it is in the form of a QR code that can be easily scanned. The paper wallet generates the private key that is in printed form, which means no one can attack or hack it.
These are the most widely used wallets as these store keys offline. This makes it nearly impossible for fraudsters to attack the printed keys. It is still crucial to take preventive measures to avoid any kind of malicious attack or hack. It is advised to use an operating system that is clean.
Physical bitcoin wallet
The physical bitcoin wallet has a pre-requisite of preloading the wallet with a fixed amount of bitcoins. The main motive of this wallet is to prevent users from re-spending the bitcoins and make the private key remain hidden. The trade with a physical wallet is easy and secure as the keys are stored offline, and trade can be carried out offline.
The traders who trade or invest in bitcoin regularly, or we can say a daily basis they require an easy tool. The most essential and easy tool for trading bitcoins is a mobile wallet. The mobile wallets can run on tablets or smartphone and is helpful in storing the private key on the phone and pay directly to anyone. These wallets are compatible with both Android and iOS users.
Undoubtedly, mobile wallets are the best solution for regular users, but also these wallets are prone to attacks and viruses. Once you lose control over your mobile device, you will lose all your bitcoins, and you will never be able to recover them. Some best mobile wallets include Blockchain wallet, Lumi wallet, Edge, Copay, Freewallet, and more.
Web wallets are the wallets that are operated with an internet connection. These wallets store private keys on the server, and third parties control the private keys. There are different types of Bitcoin Wallets that provide different features that can be linked to desktop and mobile wallets.
The main disadvantage of web wallets is that these are always online and are controlled by third-parties. It is imperative to protect the keys properly as if not done; it may allow access to private keys to third-parties. In such cases, you may lose all your bitcoins. There are many instances in which this has happened, and due to this, many bitcoin exchanges have been shut down. Some top-notch web wallets include Xapo, Lumi wallet, Coinbase, Blockchain, Circle, and more.
The wallets that are to be installed on the computer are the desktop wallets. These wallets store the private keys on a hard drive. As compared to mobile and online wallets, desktop wallets are considered more secure. These are required to be connected to the internet but don’t include any third-party to control the private keys. The various types of desktop wallets include Exodus, Atomic Wallet, Electrum, and more.