Bitcoin, being a digital currency, can only be stored in digital wallets. Which means, you cannot store bitcoin in your physical wallets like physical cash. These digital wallets allow you to send, receive, and store bitcoins.
Bitcoin is a popular cryptocurrency launched in 2009 by Satoshi Nakamoto. It is one of the first digital currencies to be launched and has stayed at the top of the crypto market ever since. The creation of Bitcoin wallets and Bitcoin popularity has increased dramatically in the past few years. The latest figures shows that there are 50 million Bitcoin wallets in circulation in 2020 (see figure below)! And that’s not including the wallets from all the other Blockchains such as Ethereum, Litecoin, etc.
Find more statistics at Statista
Let’s have a look at what a Bitcoin wallet is and the different types of wallets available.
What is a Bitcoin Wallet?
A bitcoin wallet is a digital wallet that can be on your mobile, desktop, physical hardware, or even on paper.
This crypto wallet contains a key-pair configuration where the private key helps authenticate transactions and the public key is shared to receive Bitcoins. So basically, there are two components to a Bitcoin wallet; your public key and your private key. Your public key is known as your Bitcoin wallet address and it is what you share when you want to receive Bitcoin. Your private key enables you to send Bitcoin to another address, this is essentially your lock! Keep it private!
Different Bitcoin Wallets
Mobile Bitcoin Wallet
Mobile wallets are one of the most easily accessible Bitcoin wallets available in the market. They are perfect for those who use Bitcoin for daily purchases and trading.
These mobile wallets operate on a small subset of the bitcoin network as the public ledger is too big to be stored and accessed via a mobile phone.
The mobile wallet can be quite convenient, but it is highly susceptible to hackers and frauds.
Bitcoin Wallet is a popular mobile wallet that can be installed on your mobile phone.
Desktop Bitcoin Wallet
Desktop wallets are much more secure than mobile wallets. These wallets are directly installed on the desktop. All the required data will be available on the desktop hard drive.
However, the desktop wallet is only useful for users who trade in small amounts. Bitcoin Armory is a popular python-based desktop wallet software.
Hardware Bitcoin Wallet
Hardware wallets are one of the most secure digital wallets to store Bitcoin. The private keys can be stored on the hardware and it can hold an unlimited amount of BTC. The hardware can be your HDD, pen drive, or any other disk drive.
They do not require any specific software to be accessed as the hardware itself will have an interface to verify the information and for transactions.
Trezor and Ledger provides hardware wallets to store your BTC.
Elbaite has been conducting Trezor Hardware Wallet giveaways, because we want to promote the safest wallet practices amongst our users.
Paper Bitcoin Wallet
For people who are accustomed to using traditional paper currency, some companies have come up with paper wallets. A paper wallet contains your public address for receiving BTC and also your private key to transfer BTC.
A paper bitcoin wallet is printed with QR codes so that you can scan it for your keys. It is an effective way to store your private keys offline, making it one of the most secure wallets.
Although the paper wallet is secure enough, you need to take extra precautions while getting it printed. Ensure that your OS is running on a bootable drive and the printer is not connected to the internet.
Bitaddress.org is a popular online paper wallet generator.
Elbaite and Bitcoin Wallets
Elbaite is a unique Bitcoin trading platform that allows Bitcoin traders to buy Bitcoin directly to their wallet, through a peer to peer trading system. Elbaite believes that this is the safest method to purchase Bitcoin as Elbaite believes the Bitcoin is only yours when it is in your Bitcoin Wallet! Other Bitcoin exchanges, store your Bitcoin within the exchange’s central wallet. You can read more about different exchange models in our blog post.
Conclusion
Bitcoin wallets are crucial to store your bitcoin balance. Without them, you might misplace your coins only to never find them ever again. There are numerous wallets available in the market and choosing the best one is necessary.
Before you decide on what type of wallet to purchase, we suggest that you do your own research.
Elbaite is the cryptocurrency exchange designed for Australian traders seeking safety, security and simplicity. Make an account today to start your Bitcoin investment journey!
Disclaimer: The information on this website is purely for information. Elbaite is not a financial adviser, and nothing stated here is to be taken as financial advice. You should seek independent legal, financial, taxation or other advice relevant to your financial situation before making any investment decisions.
