Bitcoin Wallet: Everything a Beginner Needs to know

Bitcoin Wallet: Everything a Beginner Needs to know

What do we use most often when we go to a shop to buy something? We use cash or currency in some form…

But where do we store that currency/cash? A “wallet”.

Everyone knows what a wallet is, right?

It is an object where we keep currency/cash.

Similarly, in the world of cryptocurrencies, we need wallets to hold our cryptocurrencies.

Bitcoin is one of the most popular and widely used cryptocurrencies, and it too requires a wallet to hold it. Unlike physical wallets, Bitcoin wallets come in many types.

For understanding Bitcoin wallets, let’s take a look at something similar- email accounts.

Understand what are Bitcoin Wallets with an example:

You have your email address based on which service you are using like [email protected]

This is a public address (i.e. everyone can see it, and you can share it with anyone for receiving emails). And you have a software/service like Gmail or Hotmail through which you send and receive your mail.

And you have a password to log in to your email service to send mail on others’ email IDs (others’ public addresses). But your password is confidential and private for your own use and theirs is confidential and for their own use.

And the software/service understands both the public address ([email protected]) and your password (private address) to successfully log you in and send/receive/store emails.

Similarly, for sending/receiving/storing bitcoins, we require a wallet on the Bitcoin network, which is nothing but a place which stores our public address (a place to receive bitcoins) and a private address (to send/spend bitcoins).

So in brief, the place where you have both your bitcoin address to receive bitcoins and the private key to send/spend bitcoins is called a Bitcoin wallet. In an even more simplified way, a wallet is a digital file which stores your bitcoins.

So what kinds of Bitcoin wallets exist on the market?

Different Types of Bitcoin Wallets:

There are a lot of Bitcoin wallets available out there in the Bitcoin world. To make it lighter for you to understand, I have classified them based on certain criteria such as online connectivity, custodianship, and device availability.

Hardware Bitcoin Wallets (aka Cold Storage)

This is the most secure and safest way to store your bitcoins because they are stored in an offline environment.

At the time of this writing, there has been no reported theft or loss of bitcoins from a hardware wallet. The private keys and digital signature needed to spend bitcoins are generated via these wallets.

I will explain about Bitcoin private keys in upcoming articles…

Bitcoin Hardware Wallets

Mobile Bitcoin Wallets

Bitcoin wallet applications which are installable on mobile phones are called mobile wallets. For each mobile operating system, such as iOS, Android, Windows, and Blackberry, compatible wallets are available. India’s Bitcoin space has Zebpay, Unocoin, and Coinsecure as the leading platforms.

Below are the various Bitcoin mobile wallets and each mobile OS compatibilities. The one that I choose using is MyCelium on Android. They have integrated a lot of security measures & are fairly safe. At the same time, there are many more mobile wallets that you can pick based on your smartphone’s OS.

Bitcoin Windows Phone Wallets

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