Unlike most traditional currencies, Bitcoin is a digital currency. Therefore, the approach to this kind of currency is totally different, especially when it comes to storing and acquiring it. Bitcoins are stored in a virtual, digital space called the Bitcoin wallets.
What is a Bitcoin wallet? A Bitcoin wallet is a piece of software/hardware that is used to communicate with the Bitcoin network. A “wallet” is basically the Bitcoin equivalent of a bank account. It stores public and private keys and communicates with several block chains to enable users to send and receive cryptocurrency and monitor their balance. In order to send or receive Bitcoins, the sender/receiver just needs to know the public address of the particular Bitcoin Wallet. Just like the e-mails, Bitcoin transactions through wallet is a one way trip. The only way to get your Bitcoins back would be for that person to send it back to you voluntarily.
The various types of wallets are desktop, mobile, paper, hardware and web.
DESKTOP – Desktop wallets can be accessed only from that single computer/laptop in which they are downloaded and installed. These wallets provide high security in storing and transactions of Bitcoins. A few known examples of desktop wallets are Electrum, Hive OS X, MultiBit, Bitcoin Core, etc.
MOBILE – Mobile wallets run on your phone’s applications. They are most useful and advantageous as they can be used almost everywhere including retail stores. They are generally much simpler, smaller and easier to use than desktop wallets. Mycelium, Breadwallet, Airbitz, GreenBits, Bitcoin Wallet and Hive Android are few of the mobile wallets.
PAPER – These are easy and simple to use and are highly secured. While the term ‘paper wallet’ can just refer to a physical copy or printouts of your private and public keys, it can also refer to a part of software which is used to generate a pair of keys safely and securely, which can be printed later.
HARDWARE – Hardware wallets differ from software wallets. They store a user’s information like private keys on a hardware device like a USB, hard-disk, CD, hard-drive etc. They are stored offline though they make transactions online, because it provides high security.
WEB – Web wallets are known as the Cloud/Online wallets. They can be accessed from any location from any devices such as phones or PCs as they run on the cloud. The advantage of these wallets is that they can be conveniently accessed and can be used to store your private keys online. Few web wallet providers are Coinbase, Blockchain.info, Trezor and GreenAddress.
The choice of the Bitcoin wallets is up to the individuals. Every individual needs to be very careful when it comes to selecting the right wallet to keep their transactions safe and secure in a trusted manner.