Bitcoin-wallet is called a special space on the Internet, through which you will get access directly to the coins.
In this place, there are special keys that you use for operations with Bitcoins placed in the Blockchain. In any wallet you can see the account balance, so you will always know in advance how much you can spend for purchase or forward to another person.
Why do I need a private key?
The concept of a special key implies a set of secret information that confirms the owner’s right to use coins with the use of a special cryptographic signature. This key is recommended to be stored on a PC in a separate file if you are using a software type wallet. If this is an online wallet, then the key will be on the remote server.
The key is to be known only to you, you cannot tell anyone its contents. Otherwise, you risk losing your valuable Bitcoins.
Where to store Bitcoins?
A lot of ways are used to store cryptocurrency. In some ways, a virtual wallet resembles an electronic bill, but it has its own nuances and features.
The procedure for storing coins in many ways resembles the storage of ordinary, real money. Just keep your bills in a physical wallet, and Bitcoins – in the digital, which contains the keys. The latter act as a pass-through point for the user to give the «go-ahead» for a specific transaction.
There are several variants of cryptocurrency wallets, which are used on various devices and have their own peculiarities:
Let’s consider each of them in more detail.
Local wallets for PC
Local wallets are called computer wallets, and there are two variants::
- Thick – you need to download the whole Blockchain, and in the future, you need to constantly update it. An excellent option for storing Bitcoins – Bitcoin Core or Armory;
- Thin – only the desired block of the chain is downloaded. However, this type has a disadvantage – the security level is not high enough, since from the third-party services the user must take the missing data. MultiBit, Electrum or DarkWallet can be used for storing.
Mobile type wallets are very convenient because you can access them not only from the computer but also from the tablet, smartphone, netbook and another portable device.
But such a program is not fully functional because it does not load the entire volume of the Blockchain.
As good options, we can give examples: Bitcoin wallet, Xapo, Mycelium Blockchain.
Online wallets for Bitcoin
If we look at the online wallet, then, in that case, the private key is stored on the Internet. There are special services that allow you to safely store personal information on them.
The main advantage of such a wallet is the possibility of remote access from any device from anywhere in the world.
But there is a drawback – it’s the risk of losing Bitcoins because they are not under the control of the user.
Examples of good online wallets: Xapo, Circle, Blockchain.info, Strongcoin, and Coinbase.
Wallet of hardware type
Hardware wallets are usually called special devices that contain secret keys in electronic form. This is convenient in terms of simplifying the conduct of payment transactions.
Such wallets are used by the owners of Bitcoins, who have a large stock of coins and they want to protect their capital as much as possible.
Worthy options for storage are Ledger, Trezor, KeepKey.
What are paper wallets
A paper wallet is also a popular way to store cryptocurrency. There are special web portals offering similar services.
First, a Bitcoin-address is generated, an image with a QR code of two types is created: public and private.
A paper wallet is good for securely storing keys and minimizing the risk of cyber attacks.