Let's start from the beginning: Bitcoins. If you don't know what they are by now, bitcoins were created in 2009 by an unknown person. They’re made to buy whatever your heart desires without any transaction fees, and you don’t even have to give your name! You can use bitcoins to buy merchandise anonymously. They’re so easy so use, because they’re not entirely tied with any country or subject regulation. There’s also no credit card fees — which is why small businesses love them. Bitcoins are mainly used as an investment — hoping to go up in value.
Now that we got what bitcoins are, let’s get more in depth and answer the real question here: What is a bitcoin wallet? Since the majority of you who use bitcoins should know what the wallet is. But, if you're just getting into bitcoins and the use of them, find out what the wallet can do for your bitcoins.
What is a bitcoin wallet?
Similar to your everyday wallet, a bitcoin wallet is used just the same — it stores your money. The only difference between the two is that, rather than storing dollar bills and credit cards, a bitcoin wallet stores your bitcoin private keys. A wallet that can only be accessed with a password. Without a password, you won’t be able to access your bitcoin wallet — so, always remember your password or else you’ll be locked out of it. And it’s only controlled by the owner… no one else. You have full custody and control over your own wallet — so, always keep it safe and give your password to no one.
There are different types of wallets.
When it comes to bitcoin wallets, there are many types of them. Yes, there isn’t just one specific wallet — there’s a variety of them.
Each wallet provides you with different features. However, all bitcoin wallets must conform to the established bitcoin protocol in order to send and receive funds regardless of their specific implementation. Just like an email where you have numerous email providers to send and receive messages.
For web wallets, they allow you to send, receive, and store bitcoins from your web browser. As for the most convenient wallet, the web wallet is typically hosted by a provider that manages the security of the private keys from the account. Meaning you’re fully in control of your wallet.
Since the web wallet is only controlled by the owner, it’s crucial to know your password and keep your wallet private. You should always take the security part of this seriously.
For desktop wallets, you can store the private keys on a hard drive — meaning you can only access the funds by using the computer the wallet is installed on. If the wallet was a file, it would suddenly become corrupted without any backup available, then the bitcoins in your wallet will be lost forever.
So, always have a good password and constantly backup your file to avoid this mistake.
Mobile wallets are meant for mobile devices. In other words, you can easily scan QR codes and easily navigate it with your touch screen. This wallet is really useful since you can use it on the go rather than on a desktop computer.
Mobile devices like iOS and Androids can access your bitcoin wallet account — sending, receiving, and even selling your bitcoins.
This type of wallet is perfect for those who are constantly on the go.
For a specialized type of wallet, hardware wallets are much more difficult and complex for users to get compromised using. When compared to a mobile or desktop wallet, they offer the bare minimum amount of software required to store your bitcoins.
Paper wallets are used to embody bitcoins in a more physical medium like paper or metal. It’s like a printed bank note, and if the paper wallet is suddenly lost or destroyed, then all of your bitcoins will be gone forever.
For brain wallets (yes, brain), you can generate it from a passphrase. Since it’s similar to a paper wallet, if your passphrase is lost, your bitcoins will be lost too in your brain wallet.
Even though it seems like a great idea to store all of your bitcoins in your memory, you should be cautious when it comes to securing your passphrase to access it.
So, what is a bitcoin wallet? No need to ask that question anymore.