There are various types of bitcoin wallets.
The internet is filled with so much information about it already. But the only thing that gets in the way of seeking that information is you do not know what to trust and what is right.
You must be wondering, how does an open-source wallet give you control over your bitcoins?
This is the place for you!
This blog is going to be about the open-source bitcoin wallet.
Most people have this misconception that bitcoin wallets store funds in them. But as mentioned, it’s just a misconception. Bitcoin wallets don’t store your fund, but they only store the private keys which give you access to your cryptocurrency.
These are types of bitcoin wallets that are there and you may make use of it:
- Software wallets
- Desktop wallets
- Web wallets
- Mobile wallets
- Hardware wallets
- Software wallets:
Software wallets can be accessed through desktop browsers or mobile phone apps.
These wallets can be considered for storing small amounts of bitcoins.
It is for daily trade. It makes routine expenses and income, convenient and quick.
This software or app consists of the private keys that give you access to your bitcoins.
This wallet is known to help you make mobile payments and gives bitcoin currency the feature of accessibility.
- Desktop wallets:
The wallets that you directly install to your computer, and whose private keys are stored on the hard drive of the desktop.
This wallet enables you to access your funds only from that computer where the wallet is installed, which gives you complete control of your wallet.
- Web wallets:
Web wallets can be accessed via a web browser, and are hosted by a provider who manages your private keys to ensure complete safety and privacy to your transactions.
This wallet enables you to transact without leaving a trace of your transactions on the blockchain network.
- Mobile wallet:
Mobile wallets are almost the same as the Desktop wallets that we talked about previously in this blog, but mobile wallets are just designed for the mobile experience.
- It is convenient to use.
- It gives you access to your bitcoins anytime, anywhere.
But it is at a greater risk of being hacked.
- Hardware wallets:
Hardware wallets are compact devices that are handheld and are used to store bitcoin currency offline. You can plug it into a computer whenever you need to verify a transaction.
A software wallet is running parallel on your computer or phone, keeping track of the bitcoin stored in the hardware wallet.
These wallets are more secure than software wallets.
Hardware wallets are known for storing large amounts of bitcoins, for a longer duration of time.
Chances are you’ve heard of them or have used them already in your trading.
Theoretically, software wallets are more preferred because of their mobility and accessibility than hardware wallets.
Software wallets are stored in your device. And you are not required to keep a track of where your wallets are, like in the case of hardware wallets.
With hardware wallets, you need to keep a track of where you’ve stored the hardware wallet and whether it’s safe there.
Software wallets, however, enable you to sell your bitcoins quickly.
- Software wallets are cheaper than hardware wallets.
- Some software wallets charge only transaction fees, which are pre-decided by the network.
Why are Bitcoin wallets so important?
- It protects you and your transactions from getting exposed and ultimately being stolen.
- It ensures that the bitcoin address and currency stored in the wallet are safe and secure from potential threats on the network.
- A variety of bitcoin wallets provides more safety as people with large amounts must have hardware wallets, while people with smaller amounts may get a moderate amount of software and it would do good.
Wallets allow you to have control of your funds, and they also need you to step up your security game.
When you’re dealing in large amounts for the long term, you need to have a hardware wallet, and keep the seed phrases hidden and secure somewhere. Otherwise, you’ll have to bid goodbye to your currency, in case they get stolen or damaged.