Read so much about open-source bitcoin wallets. Still, wondering how it gives you security and control over your digital currency?
You’re at the right place!
This blog is going to tell you all? Maybe not! But it’s going to give you an overview of the how part of the question.
Do you think the bitcoin wallet stores your fund? If yes! Let me burst your bubble. Bitcoin wallets do not store your fund, but instead, as stated previously, they store the private keys that give you access to your cryptocurrency.
Let’s see what all types of bitcoin wallets are there:
- Hardware wallets
- Software wallets
- Desktop wallets
- Mobile wallets
- Web wallets
Hardware wallets:
As the name suggests, it is a compact, handheld device that is used to store your bitcoin offline. It can be plugged into a computer when you need to verify a transaction. It requires a software wallet to run parallelly on your computer or phone.
Theoretically, hardware wallets are safer than their software counterparts.
These are preferred for storing large amounts for the long term.
Software wallets:
These wallets can be accessed via desktop browsers or smartphone apps. Software wallets are preferred for storing smaller amounts. It makes daily expenses and income convenient and quick.
This software or app contains the private keys that give you access to your bitcoins.
Desktop wallets:
These are wallets that are directly installed on your computer, where the private keys are stored on its hard drive.
This allows you to access funds only from that computer, enabling you to have complete control of your wallet.
Mobile wallet:
These are more or less the same as Desktop wallets but just designed for mobile. Though it is convenient and allows you to use it anytime and anywhere, however it carries a great risk of hacking.
Web wallets:
These wallets can be accessed through a web browser, and are often hosted by a provider who manages your private keys to ensure complete safety and privacy to your transactions.
Heard of them already? Yes! Chances are you have heard of them or used one of them already.
Theory about these suggests software wallets are more user-friendly than hardware wallets as they do not require you to keep a track of the whereabouts of your physical devices where you’ve stored your bitcoins. Some features enable the users on software wallets, to sell their bitcoins quickly.
And not only that, but software wallets are also cheaper than hardware wallets. Some of the most popular software wallets charge only a transaction fee, which is decided by the network of the cryptocurrency that you own.
Ask yourself,
Why are Bitcoin wallets so important?
- It protects the users from potential cryptocurrency hacks, during an exchange.
- Having your wallet ensures that you’re protected from potential hacks.
- A variety of bitcoin wallets provides more safety as people with large amounts must have a hardware wallet, while people with smaller amounts may get a moderate software and it would do good.
Endnote:
Cryptocurrency wallets help you have control of your funds, but they also require you to pull up your security system.
With that being said, if you’re dealing in large amounts, please make sure it is a must to have a hardware wallet, and its seed phrases and to keep it secure and safe.
Or else, you might have to say a painful goodbye to your bitcoin in the incident of a loss or a theft.
