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What Are Bitcoin Wallets

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What Are Bitcoin Wallets
May 10th, 2019NewsComments Off on What Are Bitcoin Wallets

You might wonder that if Bitcoin is digital cash then what these Bitcoin wallets are. Are these some sort of physical wallets for holding your bitcoin? If you don’t know where should you store your bitcoin or how do Bitcoin wallets work, here you’ll find answers to these questions.

As you know, bitcoins aren’t physically “stored” anywhere because it is a digital entity. This means you can’t keep this virtual coin in bank vaults or in your leather wallets. In order to safely store Bitcoin, you need a Bitcoin wallet, which is a software program of holding digital coins. With the help of Bitcoin wallets, you can send and receive the cryptocurrency. A Bitcoin wallet or digital wallet stores the secure private key which is used to access Bitcoin addresses and carry out transactions. Now, you may ask what this private key is.

Technically, you don’t actually own the specific bitcoin as all the coins exist on the blockchain. This means you hold the combination of the keys that allows you to access the bitcoin. The coins are accessible through Bitcoin addresses, for which you need a set of digital keys for entry. And every Bitcoin address has two keys: a “public key” and a “private key.”

In order to under public and private keys think about how your email works. You have an email address which you share with other people. People use this address to send you an email but they don’t have access to your mailbox. In the same way, the Bitcoin addresses are derived from a public key, which is shared with others in order to send or receive bitcoins. Sharing your public key with others doesn’t give anyone access to your wallet. On the other hand, a private key belongs to you only and gives you the ability to access bitcoins. This key belongs to a specific Bitcoin address and must not be shared with anyone.

So, a Bitcoin wallet is actually the combination of the private key(s) and public key. The four main types of wallet are desktop, mobile, web, and hardware.

  1. Desktop Wallets

Desktop wallets allow the user to access their Bitcoin directly from the desktop of their computer. You can install it on your computer desktop and create a Bitcoin address for sending and receiving the Bitcoins. Whether you use Microsoft’s Windows, Linux, or Apple’s macOS, you can easily run it on your desktop and store your private keys. Some popular desktop wallets are Bitcoin Core, MultiBit, and Electrum.

  1. Mobile Wallets

These wallets are designed for mobile phones. Mobile wallets are similar to paid apps on your phone. Unlike the desktop wallet, this helps you to pay directly from your mobile from anywhere by using “touch-to-pay” via NFC scanning a QR code. You can find wallets for iPhones, Android and Windows mobile phones such as Hive Android and Mycelium Bitcoin Wallet.

  1. Web Wallets

Just like mobile wallets, web wallets also allow you to use Bitcoins from anywhere. These wallets are connected to exchanges and other online service providers to facilitate Bitcoin transactions through a web browser. Using a web wallet means depositing your coins into the service providers’ online wallet such as Coinbase and Blockchain web wallet providers.

  1. Hardware Wallets

Hardware wallets are a physical piece of equipment that can be plugged into a computer via a USB port. These are the most secure kind of wallet to store Bitcoins because they are not at risk of virus attacks. There are two types of hardware wallets: online and offline.

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