In recent times, many of us would know about Bitcoins as a leading Cryptocurrencies. Actually what does the currency will be like? This question will arise to everyone, who reads about the term that bitcoin is a digital currency. This means the bitcoins will be composed of a sequence of 0’s and 1’s which will be stored in a digital wallet called a Bitcoin wallet. Every bitcoin wallet will have a unique wallet address, with the transaction takes place in a Bitcoin Compass.
This article lets you know more about the Bitcoin wallet if you are planning to become a bitcoin owner. Let us dive into the world of Bitcoin wallet!
As you expect, a Cryptocurrency will not be storing real bitcoins in a wallet, as in the case of the traditional currency system. The cryptocurrencies store private and public keys, which are mandatory for initiating the transaction. Now another question why a private key and a public key are required for a bitcoin transaction.
A public key is a wallet address, with which other users in the bitcoin network transfer bitcoins to you. A private key will be used by you to send bitcoins to another person’s bitcoin wallet address. Only you will have access to the private key. But the public keys will be seen by all the users in the bitcoin network. The users must safeguard their private address, as if they lose their private address, the entire bitcoin in the wallet will be lost. So, you can store the wallet in 2 methods, namely, hot-storage and cold-storage.
A bitcoin wallet is responsible for sending and receiving Bitcoins in exchange for goods or services. The bitcoins are created by the miners, which will be stored in a wallet. The wallet provides synchronization of all the blocks in the blockchain.
How to use a Bitcoin wallet?
It is not a very big deal to use a Bitcoin wallet. All you have to need is to download the bitcoin wallet software available on websites or apps, which can be stored on the desktop, laptop, smartphones, and tablets. You can also register on a bitcoin website and start using the bitcoin wallet.
Types of bitcoin wallet
The following are the types of Bitcoin wallet. They are:
As the name indicates, a paper wallet is a piece of paper, which has a printed public key and private key like a QR Code. As we have already discussed, a public key will be used for receiving bitcoins, and a private key will be used for sending the bitcoins. As they are physical paper, bitcoin paper wallet user must take care, so that it is not lost.
Web, Mobile, and desktop wallets
For initiating a bitcoin transaction, the users must be downloading apps to their gadgets. For a frequent bitcoin transaction, a bitcoin user must be using apps for mobile phones. A mobile wallet app will be having private keys, with which you can transact your bitcoin with other bitcoin users. Usually, a bitcoin user is used to download a copy of the blockchain, and the size of the entire blockchain will be in several gigabytes. So, it will take one day to download the whole blockchain. For the convenience of mobile users, Simplified Payment Verification ( SPV) technology, can be used where only a small subset of blockchain will be downloaded, thereby saving time and space.
As the name indicates, the hardware wallet is a device, which can be connected to the computer or laptop, before initiating the bitcoin transaction. By using hardware wallets, the bitcoins can be stored securely. The most widely used hardware wallets are, TREZOR, KeepKey, and Ledger Nano S. If the user has a large number of bitcoins, it is always safe to user hardware wallets, as the private keys will be secured from devices connected to the Internet. As they are offline, there is no chance of virus infection also.
These types of wallets operate only when the devices are connected to the Internet. As the internet-connected devices are vulnerable to security threats, it is not safe to store more bitcoins in those wallets.
So, the bitcoin planners will have got more information about the bitcoin wallet and its types in this article.