Regarding bitcoins and other cryptocurrencies, a ‘wallet’ is a code-written program used for the storage of digital currencies. Technically speaking, Bitcoins aren’t stocked anywhere for storage or whatever; there is a secret number for each Bitcoin address that is stored in the Bitcoin wallet of the owner of the balance.
Bitcoin wallets also referred to as ‘digital wallets,’ help to send and receive Bitcoins and give ownership of the Bitcoin dividend to the user. When faced with deliberation on how to use Bitcoin wallet or the best bitcoin wallet to use, what you should have in mind is that these wallets come in various forms, ranging from desktop, mobile, web, to the hardware.
Setting up a bitcoin wallet is a critical move in the process of purchasing Bitcoins. Just as Bitcoins and other forms of cryptocurrencies are the digital equivalents of cash, a digital wallet is similar to a real purse. But rather than literarily storing Bitcoins, what is deposited here is a bunch of valuable data like the secure secret key used to obtain Bitcoin addresses and perform transactions.
The four main types of the digital wallet comprise mobile, web, desktop, and hardware.
Installing desktop wallets on a desktop computer system provide the owner with total supervision over the wallet. Desktop wallets permit the user to generate a Bitcoin address for sending and receiving the cryptocurrency. They also enable the user to save a secret key. Some known desktop wallets include Bitcoin Core, Armory, Hive OS X, MultiBit, Electrum, etc.
Mobile wallets are superior to the desktop wallets, as their mobility overcame the handicap of the latter. Once you run the wallet application on your smartphone, it can perform the same duties as a desktop wallet, and facilitate payment directly from your mobile from anywhere.
Therefore, a mobile wallet helps make payments in physical stores by utilizing “touch-to-pay” through NFC scanning a QR code.
A few known mobile wallets are, Mycelium Bitcoin Wallet, Hive Android, and Bitcoin Wallet.
Web wallets let you use Bitcoins from anywhere, on any browser or mobile. You must be very cautious in choosing your web wallet since it stores your secret keys online. The popularly known web wallet providers are Coinbase and Blockchain.
Currently, the number of hardware wallets is very limited. These gadgets can retain private keys electronically and expedite payments but are still undergoing development. Hardware wallets are probably the safest way to store your cryptocurrency as they are fully autonomous and essentially offline. However, having additional backup device is highly recommended for recovery purposes in case of primary device malfunction or loss.
Keeping your Bitcoin wallet safe is very essential. Some sureties comprise: encrypting the wallet with a secure password, and choosing the cold storage option, i.e., storing it offline.