Different Types of Bitcoin Wallets

Editorial Team Avatar
Jul 16, 2020
4 min reading time

Bitcoin is the digital currency that is used by many businesses today. There is a nominal transaction fee, and also the bitcoins can be transferred at a brisk pace compared to the regular transactions. Moreover, you can also perform cross-border transactions without any regulations. There is no physical form in which bitcoin exists. You cannot store like your gold coins. It has private keys that you can use to gain access to the public bitcoin address and transaction signatures. You must secure this information. The combination of the recipient public address and the private key would make the transaction complete.

There are different types of bitcoin wallets available. However, the requirement for each is different. Each one would differ in terms of security and convenience.

Here Are the Types of Wallets You Find in the Market

Paper Wallet

paper wallet
Source: BestICOforyou

The paper wallet is a kind of document that will have the address of the bitcoin you are receiving. The private key that is with you allows you to send or receive the bitcoins stored in the address. The paper bitcoins would be printed in QR codes to scan this code and add the keys to the bitcoin wallet to complete the transaction. There are different ways to generate a paper wallet. Various bitcoin addresses can be generated along with the private key. The keys that are generated are printed on the paper. You cannot tamper the key as it is tamper-proof.

The best part of using a paper wallet is that you can store the bitcoins offline. It is immune to hackers. There is no threat of malware hacking your wallet and stealing the coins. However, you must take the necessary precautions while creating a wallet. When you are generating the paper wallet, ensure no one is keeping a close watch on it. When you are copying the paper wallet to the USB drive, you must use the clean OS. When the paper wallet is ready, you should be able to use the code offline. It disconnects you from the internet before the keys are generated. Once the paper wallet is ready, you must use the printer that is not in the network. There is a lot of private information on the paper, so you must safeguard it.

Mobile Wallet

mobile wallet

If you are using bitcoins for everyday transactions, you must use the mobile wallet. You must download a bitcoin software on your mobile and store the private key. This allows you to make the payments directly from your mobile. There are a few mobile applications that come with near field communication feature. All the user must do is tap the phone in the terminals without providing the details.

Web Wallet

The web wallet will keep the private keys safely on the server. This server is managed by the third party and is available round the clock without going down. Different web wallets allow you to link the wallet to the mobile or desktop wallet. When you link the bitcoin address would get copied into the device. The best part of the web wallet is that it allows you to carry out the bitcoin transactions on the move provided you are connected to the internet. If you do not protect the bitcoins in the wallet properly, the websites you are making the transactions would gain access to the coins and take control over the funds.

Desktop Wallet

You can download this wallet onto the system. The private key is stored on the hard drive of the system. These are highly secure when compared to the web and mobile wallets. There is no third party involved to manage the private keys, and the data is not so easy for hackers to steal. However, to use this wallet, you must get connected to the internet, which makes it less secure. The desktop wallet is an ideal solution for the people who have a lesser amount of bitcoins. They can store on the desktop.

Hardware Wallet

hardware wallet
Source: TheCryptonomist

The hardware crypto wallet is a unique kind of device where the private keys would be stored in the hardware device. It is an effective way to store bitcoins. There is no chance for hackers to steal the money that you have stored in this wallet.

Featured image: CryptoPotato

* The information in this article and the links provided are for general information purposes only and should not constitute any financial or investment advice. We advise you to do your own research or consult a professional before making financial decisions. Please acknowledge that we are not responsible for any loss caused by any information present on this website.
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