What is a Bitcoin Wallet?
Why are bitcoin wallets different? If a wallet holds your money, a bitcoin wallet does not hold your bitcoin. Bitcoin wallet does not have to be opened to accept coins because bitcoins are stored in blockchain shared records.
When your sign every bitcoin transaction with your private key, then it gets stored in your wallet. When you are doing bitcoin transactions, you use a private key associated with the address that you bitcoin wallet creates for you. You don’t actually store bitcoin in a wallet but if you use a wallet your bitcoin is protected. It is important that you find the right bitcoin wallet for you among the many different kinds offered.
Mobile bitcoin wallets, bitcoin paper wallets, online bitcoin wallets, and desktop bitcoin wallets are the different types of bitcoin wallets to choose from.
If you use bitcoins and already have a bitcoin client installed, then you have access in creating a bitcoin wallet and complete transactions. The security levels of desktop bitcoin wallets are known to be advanced. If you are content with being physically limited by your desktop and want high levels of security, then you can choose a desktop bitcoin wallet.
If you are on the move and you want to have access to bitcoins, then you should get a mobile bitcoin wallet. If you are buying products online, then having a mobile bitcoin wallet will allow you to pay your products using your smartphone. Or, you can simply tap your phone against a reader to pay. The benefits of easy access is found in mobile bitcoin wallets.
You don’t have to have a digital bitcoin wallet. Today, another kind of wallet is becoming popular and that is the bitcoin paper wallet which is relatively secure. Using a bitcoin paper wallet or an offline bitcoin wallet gives you two QR codes. One code is associated with the bitcoin address and the other codes is associated with your private key. If you own an offline bitcoin wallet, there is always the chance that you could lose you QR codes.
An internet-based bitcoin wallet or an online bitcoin wallet is a digital bitcoin wallet that is not associated with your desktop. If you have an online bitcoin wallet, then a third-party provider controls it. So someone else is involved in controlling your bitcoin funds. You have your private key stored online if you have this kind of bitcoin wallet. This means that funds can be accessed anywhere there is internet access. You can link your online bitcoin wallet with your mobile or desktop bitcoin wallets. The problem with online bitcoin wallet is the involvement of third-party handling. But then, it is very helpful to be able to get funds whenever there is an internet connection.
Consider the different kinds of bitcoin wallets and decide for yourself which among them best satisfies your needs.