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Importance of Bitcoin wallet and its types

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All the bitcoins are stored in a Bitcoin wallet. A bitcoin wallet is not like a physical wallet where we store coins. It is like a software program that stores digital cash in the form of 0’s and 1’s. Only with the help of a bitcoin wallet, Virtual Currency will be able to send and receive the bitcoins. A bitcoin owner will have a private key in the form of a string of numbers and characters in a bitcoin wallet. Only with this private key, a biotin owner will be able to perform a bitcoin transaction.

Security of bitcoin wallet address

So, if the bitcoin owner lost his bitcoin wallet, then it is like losing the entire bitcoins. Because the owner will not be able to get back the bitcoins stored in the wallet without the help of private keys, similarly, if someone steals the bitcoin wallet, then using your private key, they will be able to transact the bitcoins to his public address.

Hence a bitcoin owner must safeguard his private keys either by taking a printout and storing the paper in a physical location. They must not forget to delete the copy from where they took the printout. The next precautionary method is that the bitcoin owners can keep the backup of the private key. So, in case if the owner’s bitcoin software stored on his desktop or mobile got deleted or attacked by a virus, the backup copy might help you. Also, if a bitcoin user has registered and obtained his wallet from a third-party website wallet service provider and the server of the service provider crashed, then the user has to lose all the bitcoins. The private key details will be held by the service provider, and that is why the bitcoin user will be losing all the bitcoins stored in the wallet. So, if the user had a backup, then it would act as a lifesaver for them.

Types of bitcoin wallets

There are different types of bitcoin wallets. They are:

  • Desktop wallets
  • Hardware wallets
  • Mobile wallets
  • Web wallets
  • Paper wallets

Desktop wallets

As the name suggests, the desktop wallets are stored in desktop computer systems. This wallet helps in storing both the public address and private address. With the public address, a bitcoin user will be able to send or receive bitcoins from another bitcoin user. With a private key, a bitcoin user will be able to initiate the transaction to see the received bitcoins or open the wallet and send the bitcoins to the receiver.

Mobile wallets

The mobile wallets, as the name, suggests storing the bitcoin wallet on the mobile. The users will be able to access the wallet through the wallet app and perform the transaction by touch mode and QR scanning technology. But as mobile can be accessed by anyone, the wallet address has to be safeguarded from the hands of malicious users.

Web wallets

The most widely known web wallets service providers are Coinbase and Blockchain. A Bitcoin transaction can be done through web browsers where these kinds of service providers are accessed from laptop, desktop, or mobile.

Hardware wallets

The most secure means of storing and performing a bitcoin transaction. Because as the name suggests, the bitcoin wallet will be stored in a physical device, which looks like a USB. They do need any internet connection for accessing or storing the wallet address. So they are highly secured, and they nor affected by any virus due to its built-in feature of anti-virus function.

Paper Wallets

In this case, the private key and public keys will be stored in printed format in the paper, which is also offline. So it does not suffer from any virus threats or illegal access through the Internet.

These are all the various types of a bitcoin wallet address. So, to initiate a bitcoin

transaction, a wallet address is very important. So, safeguarding the wallet is very

important as if any anonymous user steals the bitcoin wallet address, the user must lose

all the bitcoins. Hence some kind of safeguarding mechanism has to be adopted like the

wallet address has to be encrypted with some password, or they must be stored in a

physical device or in a place where people cannot access it.

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