We all carry a wallet with us as we find it important to keep all our money in a safe place. But where are we supposed to keep our Bitcoin ban?
The answer is not at all complex. Just like your regular wallet, there is a Bitcoin wallet in the digital world that keeps your cryptocurrency safe and assists in all sorts of transactions.
How does Bitcoin Wallet work?
Using your regular wallet is quite easy. You just need to open its flap, and you have access to your money. But using a Bitcoin wallet is not as easy as pie. We all know that the bitcoin network is based on Blockchain technology. Blockchain technology records all kinds of bitcoin transactions. Every user of bitcoin has a Blockchain address on his/her bitcoin account. The working of the Bitcoin wallet is based on its interaction with the blockchain address of the Bitcoin account.
- Each Bitcoin wallet is assigned a special number. These numbers are like a key to your lock. You have to enter the key number before carrying out any transaction.
- Once this secret code is entered, the user of that address becomes eligible to make any transaction. Therefore you should always be careful with these numbers as anyone who has access to these numbers could transfer your currency to their wallet easily.
Various types of Bitcoin Wallet:
Before buying a wallet, you look for its color, the material used, the quality of the product, and whatnot. Similarly, there are many types of Bitcoin wallets that you can choose from to keep your cryptocurrency safe.
- Mobile Wallet:
The wallet can be installed on your mobile devices. WazirXmulti-cryptocurrency wallet and Exodus Bitcoin wallet are an example of some of the popular mobile wallets.
- Web-Based Wallet:
This category of Bitcoin wallets is very convenient but is highly risky because they are connected to the internet. So, they are more prone to hacking. These are called hot wallets. The user gets to save their Bitcoin with the help of third party interaction.
- Desktop Wallets:
The desktop wallets are downloaded on your desktop to keep your coins safe. It is a better option than mobile wallets and web-based wallets as there is no third-party involvement. Therefore, it is safer and more secure compared to the other two options. However, the chances of getting hacked are still there as the desktop is connected to the Internet. These kinds of wallets are called cold wallets.
- Paper Wallets:
Paper wallets are hands down the best Bitcoin wallet as the chances of them getting hacked are nearly impossible. The user needs to print the key or the QR code and form a paper document. A hacker can hack your code online, but it becomes impossible for him to hack a code that is not available on the web. However, these documents can be stolen. Thus, the user needs to keep these documents in a safe place.
- Hardware Wallets:
Just like paper wallets, this category of Bitcoin wallets is also safe and secure. Your secret code or your special numbers that act as a key to your Bitcoin wallet are stored on a physical device that is not connected to the Internet. The user can plug in this device on their computer whenever they wish to make a transaction. These are other types of cold wallets and these are the safest wallets.
How to choose the perfect wallet?
The world is moving ahead with cryptocurrency, and in this Bitcoinage, all you need is a perfect wallet that not only keeps your currency safe but makes the transactions easy. So, consider the following points before choosing the ideal wallet for your Bitcoin.
- Cryptocurrency is more prone to hacking. Therefore, you need to find a wallet that keeps your cryptocurrency safe. A cold wallet is a safer wallet than a hot wallet.
- Make sure to set a strong password using two-factor authentication.
- Invest your time in researching before buying. Reading reviews online can be helpful as it will give you an overview of the brand which is offering the wallet. Pay attention to special points such as user experience, features of the wallet, and whether the wallet has ever been hacked.
Conclusion
A bitcoin wallet is a digital wallet used to keep your private key and your cryptocurrency holdings safe. The working of these wallets depends upon the blockchain address of the Bitcoin. A special code is made by the user, which makes it possible to carry out the transactions. Anyone who has access to this code is eligible to make transactions from your wallet. Thus, it is more prone to hacking.
To prevent this, you should select the perfect type of wallet for your currency. You can carry out your research and read all the reviews of the users before buying selecting the wallet for your currency. For the best option to buy and sell Bitcoin with a safe wallet, you can opt for the Bitcoin era.
