The approach of cryptocurrency is purely different as it is a digital currency which do not exist in any kind of physical form and cannot be stored anywhere. Bitcoin is one of the highly used and popular cryptocurrency. Bitcoin address and sign for the transaction are accessible only through private keys. The combination of user public key and private key makes bitcoin transaction possible. Bitcoin also need a wallet to keep it but it is not like a physical wallet. A place where both bitcoin address to receive bitcoins and private key to spend/transfer bitcoins are kept, is known as bitcoin wallet. A wallet is just like a digital file that safely stores bitcoins. There are many types of bitcoin wallets in the world such as:
- Hardware bitcoin wallet– it is highly secured and the safest way to store bitcoins. It is an offline mode wallet and provides no chance of loss or theft of bitcoins. These wallets need private keys and digital signature to spend bitcoins. Example of hardware bitcoin wallet are ledger Nano S and Trezor.
- Mobile bitcoin wallet– mobile wallets are the wallet applications which can be installed on mobile phones. Compatible wallets are available for every type of mobile phones such as Android, iOS, windows or blackberry. Unocoin, Mycelium, samourai are some of the examples of mobile wallets.
- Desktop bitcoin wallets- desktop bitcoin wallets are installed on various desktops such as windows, Mac, or Linux on the basis of their compatibility mode. Some example are Exodus, Electrum, and Jaxx.
- Web bitcoin wallets- web based bitcoin wallets are web services and can be reachable by internet based browsers such as IE, Firefox, or Google chrome. Private keys of these wallets can be accessible by internet only. These are also known as hosted wallets as online wallet server stores the client’s bitcoins. Examples are Coinbase, Xapo etc.
- Paper bitcoin wallets– this wallet is the piece of paper on which bitcoin public address and private address is printed. This is an offline mode of saving bitcoins and secured by owner so there is a low threat to loss of bitcoins electronically.
Some bitcoin wallets are based on their connectivity such as
- Hot bitcoin wallets – connected 24/7 with internet connectivity.
- Cold bitcoin wallets– stored offline in paper, USB drives, or Hard drives
Some Bitcoins wallets are based on keys custodianship, such as
- Custodial wallets- some agency/ exchange services stores bitcoins in behalf of the client
- Non-custodial wallets- when client himself take responsibility of their own funds
There are various types of bitcoins wallets in the world. It is good to choose wallets which is suitable to your needs, level of activity and level of security.