If you plan to enter into the crypto space, you may find yourself at a confused stage where you’ll think about storing your bitcoins safe. Well, bitcoins and other cryptocurrencies are stored in crypto wallets. From a wide range of crypto wallets, people often get confused on which one to pick. Let us learn about first what crypto wallets are and what their types are. Next, you must focus on making a profit with bitcoin by visiting BitQT App.
What is a Crypto/Bitcoin Wallet?
Cryptocurrencies are virtual digital currencies which means they don’t exist physically, like paper notes and coins stored in a physical wallet. As cryptocurrencies are digital currencies, these can only be transferred electronically. Therefore, all types of cryptocurrencies are stored in digital wallets that can be referred to as digital wallets or crypto wallets, or bitcoin wallets. A crypto wallet is software that technically stores the digital currencies and allows bitcoin holders to send easily, receive and store their digital coins.
Crypto wallets are similar to bank accounts that store your funds and allow you to send and receive funds. Users can also keep track of their funds and check the updated balance of bitcoins in a crypto wallet. Crypto holders can easily download the crypto wallet software on their computers or smartphones and access the wallet through an internet connection.
Different types of bitcoin wallets
Now, you have understood what bitcoin/crypto wallets are and their working system. Here, we will be focusing on learning the various types of bitcoin wallets present and can be used. There are different types of wallets present, but all types fall under the category of hot wallets or cold wallets. Two main types include hot and cold wallets. Let us learn about other different wallets that fall under these two categories.
Hot wallets are the type of bitcoin wallets that operate through an internet connection. These wallets can be easily downloaded on a mobile device or computer. The main reason behind the popularity of hot wallets is because they are easily accessible and are available either at free or at low cost. The popular wallets that fall under hot wallets are mobile and web wallets.
- Mobile wallets
Mobile wallets are the hot wallets available online in software or app form and can be directly installed on mobile devices. Bitcoin holders can easily scan the QR code of the receiver and can make payments. These types of hot wallets are connected to the internet, which makes them defenseless to cyberattacks. The wallet owner must use strong security measures to safeguard their bitcoins.
- Web wallets
Web wallets are the wallets that can be accessed via web browsers. There aren’t any restrictions on web wallets as they can be accessed and operated from anywhere and from any device. These wallets are highly susceptible to hacks and attacks.
Cold wallets don’t require an internet connection to operate. These wallets are basically in the form of physical devices that securely store crypto coins. The wallets that fall under the category of cold wallets include paper, desktop, and hardware wallets.
- Paper wallets
A paper wallet is a wallet that is different from other wallets as it is a piece of paper that prints the bitcoin wallet address and private key. These wallets are risky as a piece of paper can be easily lost, thrown, or tear. But these wallets are free from malware as no malware can attack a physical paper which means your wallet and coins are safe. Still, it is crucial to carefully store a paper wallet in a locker or somewhere else as if someone gets access to it, you might lose all your funds.
- Desktop wallets
Desktop wallets are to be installed on a PC or desktop that provide the bitcoin wallet owner complete control over their funds. These wallets are easily accessible and allow users to send and receive bitcoins easily.
- Hardware wallets
Hardware wallets are in the form of hardware devices like USB flash drives. These wallets prevent immediate access to your funds because they aren’t connected to the internet, but they will protect your bitcoins from getting hacked or attacked by fraudsters.