Are there any types of digital wallets? If yes, what are they? Cryptocurrencies are digital currencies that are stored in digital wallets. The most trending cryptocurrency in today’s time is Bitcoin. Bitcoins are stored in bitcoin wallets that don’t technically or physically store the bitcoins. Instead, a bitcoin wallet is a software that stores digital tokens. Each bitcoin wallet has its bitcoin wallet address, and each address has private and private keys used to access the funds. You can log in to the online trading website https://yuanpaygroup.site if you want to invest in bitcoin for the long-term.
Bitcoin wallets are of great usage as it allows sending and receiving bitcoins and providing ownership of bitcoins by having private keys. There are four major types of bitcoin wallets that are:
- Desktop Wallet
- Hardware wallet
- Mobile Wallet
- Web wallet
Each digital wallet has its features and functionalities. A bitcoin wallet is entirely different from physical wallets as the physical wallets are in physical form that is used to store real money. Bitcoin wallet doesn’t technically store the bitcoin, and they don’t exist physically. Bitcoin wallets don’t store the personal information of bitcoin holders but instead, these only store private keys that are used to get access to the bitcoin address. Only through bitcoin address bitcoin transactions can be carried out.
Moving forward, let us understand different types of bitcoin wallets.
Mobile wallets allow payments to be transferred by scanning the QR code. These type of wallets are compatible with both Android as well as iOS system. Mobile wallets require users to download the application and start using it, and there are chances of malware attacking your wallets. It is recommended to choose the right mobile wallet that offers the best security measures. Some top-notch examples of mobile wallets include Hive Android, Mycelium and Bitcoin Wallet.
Desktop wallets are somewhat similar to mobile wallets as these are also required to download and installed on the desktop. The unique thing about desktop wallets is that these provide users with complete control to use their wallet and give them complete authority. A private key is used in bitcoin wallets to send bitcoins, whereas a bitcoin address must receive bitcoins. The most famous desktop wallets include Electrum, MultiBit, Hive OS X, Bitcoin Core and more.
From all the various types of bitcoin wallets used to store bitcoins, hardware wallets are considered the most secure wallets. A hardware wallet is in the form of a hardware device, or we can say a piece of equipment used to store bitcoins and private key and can be plugged into a desktop through the USB port. This type of wallets store bitcoins offline, and this makes them immune to cyber and virus attacks. Still, there have been instances where theft report has been registered of bitcoin for using hardware wallets. The hardware wallets aren’t free and cost a bit.
Web wallets are the most convenient wallets as these wallets can be accessed from any device or any location. There are no restrictions in web wallets because these are designed in such away. Web wallets are highly vulnerable to cyber-attacks, and therefore, it is recommended to select the web wallets carefully. Even if you use a web wallet, never connect it to a public network or Wi-Fi because those networks can easily attack your wallets. The top-notch web wallets that are famous across the world include Coinbase and Blockchain.
How to protect your wallet?
Bitcoin wallets are used to store and protect bitcoins, but some unique considerations must be applied to ensure the high-security of the wallet you choose. It is recommended never to store a large number of bitcoins that can be targeted easily by hackers. Always encrypt your wallet using a random and strong password. Consider storing your funds in cold storage wallets as cold wallets store bitcoins in offline mode.
You must make sure to backup your wallet as it will secure your funds if the computer is lost or gets affected. Use the best security practices to safeguard your bitcoins and always protect your private keys with great care. Private keys prove ownership of bitcoins, and if anyone else has your private keys, they will be considered the real owners of bitcoin.