Classification Of Bitcoin Wallets

//Classification Of Bitcoin Wallets

Classification Of Bitcoin Wallets

A Bitcoin wallet mimics your traditional bank account. It’s a must-have software to store, buy and sell Bitcoins. Without a Bitcoin wallet, you can’t access the Bitcoin network. While there are many types of Bitcoin wallets out there, they are all classified into two; hardware Bitcoin wallets and online Bitcoin wallets. Let’s look at them comprehensively:

1)   Hardware Bitcoin wallets

A hardware wallet, also known as cold wallet or offline wallet, is a physical electronic wallet to hold and secure your Bitcoins. However, for you to spend your Bitcoins contained in a hardware wallet, you’ll need to connect it to a computer, mobile, or table. A hardware Bitcoin wallet is similar to a USB drive, only that it’s a bit advanced and has some advanced technology integrated into it. Most advanced hardware Bitcoin wallets have a screen on the front that shows your pin and physical buttons to confirm transactions.

The most popular hardware Bitcoin wallets include TREZOR, Ledger Nano S, and KeepKey. If you’re thinking long-term investment in Bitcoin, hardware Bitcoin wallet is the best option because it offers a high-level of security, reliability, and convenience. The reason why many Bitcoin investors are increasingly drifting towards hardware wallets is that they store your private keys in a secure offline environment that hackers cannot simply reach. Even if you plug the device into a malware infected computer, your private keys cannot be exposed.

The only way hackers can steal your private keys is if they manage to steal the physical device.  Even if they manage to do that, they will have to find your PIN code. The downside to hardware wallets is that they are not free. In fact, they are expensive.

2)   Online Bitcoin wallets

Online Bitcoin wallet, also known as web Bitcoin wallet or hot Bitcoin wallet, is a wallet that runs over the internet through devices, such as Smartphone, desktop computers, and tablets. These kinds of wallets are available from exchanges and other websites. Some of these wallets require that you provide your ID and proof of residence.

The downside to online wallets is that your private keys are generated online via desktop computers, Smartphones, and tablets, which means they are susceptive to hacking. Hackers can easily steal your Bitcoins. If you’re using an online wallet, make sure to store a few Bitcoins.

The upside to online wallets is that it’s easy to buy and sell Bitcoins and allows you to access your coins through multiple devices.



Let us know how to get back to you.

How can we help?

Feel free to ask a question or simply leave a comment.