Crypto and traditional currencies may differ in many ways, but one thing’s for sure — both are valuable and need to be stored properly.
People who use physical money are advised to have a wallet to be able to store it safely, and it’s actually the same for bitcoin’s case. A bitcoin wallet is like your own bank account — where you can store, send and receive bitcoins — and since only you have control over it, you will also have a private key which enables you to access your bitcoin address.
Choosing a wallet for the safekeeping of your crypto is important. You need to find the best kind that suits you. Fortunately, there are different types of bitcoin wallets you can opt for, that satisfies different needs.
Hot or cold wallet? A question to ponder
Before we start with the specifics, it is essential to know that Bitcoin wallets can be categorized as either hot or cold — a ‘hot’ wallet is online or connected to the internet, ‘cold’ wallet, on the other hand, is offline or disconnected to the internet.
There are pros and cons to each category. For hot wallets, they’re easier to set up and access, but this makes them more prone to hackers and other technical vulnerabilities. In the other hand, a ‘cold’ wallet, since it’s not connected to the internet, is a little bit more secure thus is recommended for storing large amounts of bitcoin.
Moving on, there are several different types of Bitcoin wallet that will cater to your different needs in terms of security, convenience, accessibility, and whatnot.
A paper wallet is basically a printed document which contains a public address and a private key — the public address is used to receive Bitcoins, while the private key is what enables you to spend or transfer Bitcoins stored at that address. The main advantage of a paper wallet is that the keys are not stored digitally anywhere, which makes it immune to hackers and cyber attacks, and technically any form of digital theft.
What makes this cold storage type of Bitcoin wallet unique is that it stores the user’s private keys in a secure hardware device, which is one of the most secure ways of storing any amount of Bitcoins, considering they are offline and it generates the keys on the device.
The Desktop Wallet is designed to be downloaded and installed on personal computers, laptops, etc. For storing your private keys on your hard drive. The desktop software gives you total control over your coins, which means you no longer have to worry about a third-party losing or stealing them.
Are you an active user of Bitcoin and use crypto on a daily basis? If so, the ‘Mobile wallet’ is perfect for you! A mobile bitcoin wallet is an essential and accessible tool that operates as an app on your smartphone — where storage of your private keys and paying for things directly from your phone is allowed. This type of wallet may be an on-the-go solution for Bitcoin storage, but here’s a tip-off: mobile wallets are very prone to hacker attacks.
Online wallets are the easiest to use among all the different types of hot wallets. You can generally access your bitcoin from any device if you have the right passwords and internet connection. There are third-party wallet service companies that let you store your private keys. The wallets on these platforms enable their users to access their funds on-the-go. One of the leading online wallet providers is Paxful. It is a peer-to-peer marketplace with over 300 ways to buy bitcoin. When you create a Paxful account, you also get a free Paxful wallet.
So, were you able to find a specific wallet that would suit you? If so, tell us why it’s the perfect fit for you in the comment section down below!