Bitcoin Wallets Explained

When adopting new technology there is often a learning curve to deal with. Whether it’s the way we pay with our debit card or implementing the payment features on our smartphone, keeping up with technology can also mean changing the way we manage our money.

Bitcoin is a currency that was overwhelming to some during its introductory period but has seen a rise in popularity due to its popularity in the stock market, and the anonymous way in which it works. This allows people to make a purchase, without their details being at risk.

When using Bitcoin, you will need access to a Bitcoin wallet. This is essentially a digital wallet where you will send and receive payments using encrypted codes.  Although many would assume the Bitcoin itself is held within wallet, it actually stores your private keys.

The Different Types of Bitcoin Wallets

Although the Bitcoin process is a digital one, there are various forms of wallets available. Which one is best for you will depend on what you’re looking to gain from using Bitcoin. Check out this review that looks at some of The Best Cryptocurrency Hardware Wallets 2018

Digital Wallets

Digital wallets, also known as hot wallets, are an online wallet that are used when connected to the Internet. Whereas some may be restricted to one operating systems, others may be able to work across several devices.

Those taking their first steps into the world of Bitcoin will need nothing more than a digital wallet if they’re looking to send and receive digital currency. They’re straightforward to use and some even allow access from multiple devices.

However, if you’re looking to invest in Bitcoin or hold a large amount of currency, then you will probably need something that’s more secure, which is where hardware wallets come into play.

Hardware Wallets

As the name would suggest hardware wallets are physical devices that are primarily used by those who deal with a lot of Bitcoin. Although physical, a hardware wallet still has to be connected to laptop or tablet to be able to access your Bitcoin.

The Bitcoins are secure as the way they are stored offline, meaning that they’re not exposed to the same risks that online wallets are. There’s even protection in place should you have the misfortune of having a virus or malware on your device, and a backup code can be generated should you lose or damage your wallet.

The only real downside of hardware wallets is that they cost much more than online wallets. That said, it’s vital to ensure your security is the best it can be if you’re looking to store a large amount of Bitcoin.

Making a Choice

Although there are two forms of wallet in relation to Bitcoin, the products and solutions can vary. This leads people to ask what the best solution for them is. There is no solution that will ft every need, so it’s important to consider what type of functionality you’re looking for.

Digital Wallet Providers

When you carry out a search for a wallet provider, it’s not unusual to be met with a series of different providers. Which one you decide to choose can depend on your circumstances. If you’re looking to access your Bitcoin using several different devices, then it makes sense to opt for a provider that can allows you to access your currency, regardless of the operating system being used. Greenaddress is one such provider, and it even offers additional layers of security not seen with other providers.

If you’re not looking for a platform that can be used across all operating systems and devices, then you may want to consider something that’s more fine-tuned for your device alone. Those with an Android device can navigate the Google Play store with ease and will be met with a vast section of choice. The reason why there are so many options available via Android is because for a short time, Apple had banned any form of Bitcoin app on their App Store, so developers focused on Google’s operating system instead.

The following is an example of some of the solutions available for Android devices:

  • Freewallet
  • Bitcoin Wallet
  • Simple Bitcoin Wallet

Those searching for iOS apps may find that there are fewer choice available than Android, but that doesn’t mean you won’t be able to find something that suits your needs. The following apps have proved to be popular with iOS users.

  • Bread
  • Airbitz
  • Coinspace

Those who are looking to amass a large amount of Bitcoin will be also be looking for a hardware wallet to ensure that they’re not subjected to any loss due to hacks or a compromised account. One of the most affordable and reliable hardware wallets is the Ledger Nano S, with Keepkey and TREZOR being close contenders.

Other Considerations to Make

Although both online and hardware wallets can offer users security, you shouldn’t rest on your laurels. It’s always worth ensuring that your computer hasn’t been introduced to any unwanted malware or viruses, as well as ensuring that you disconnect from the Internet when the device is not in use.

You should also ensure that you that you regularly backup your account, especially if there are large amounts at stake. This ensures that should anything go wrong, you still have access to your balance.

There can be a series of pros and cons associated with Bitcoin, but if you’re aware of the potential threats and solutions available, there’s no reason why you shouldn’t enjoy the benefits that Bitcoin can offer.

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