Types of Bitcoin Wallet
When we were first introduced to the world of Bitcoin, we are usually told to create an account with Coinbase or Blockchain.info. these websites provide us with bitcoin wallet where we can keep our bitcoin. The wallet provided by Coinbase and Blockchain.info is only a type of wallet and might not be the safest. If you are planning on accumulating a lot of bitcoins, you will need a more secure Bitcoin wallet. Today I will state and describe different types of Bitcoin wallet and their level of security. So read on and feel free to ask questions or contribute at the end.
For reference, a Bitcoin wallet is where you store your bitcoin just like you store fiat money in a bank account. I believe it is called a ‘Bitcoin wallet’ and not a ‘Bitcoin account’ because ideally, you are only that should have access to the bitcoin stored in your wallet just like any money (USD or Naira) you put in your wallet or purse is in your full control. This is unlike the bank account where the bank has access to your money.
However, to be absolutely accurate. Bitcoin is not technically stored anywhere. The information stored in a bitcoin wallet is the secure digital keys used to access the public bitcoin address and sign transactions.
Types of Bitcoin Wallet
Bitcoin wallets can be classified into two – the Cold wallet and the Hot wallet.
What is a Hot wallet?
A Hot wallet is a wallet that is connected to the internet or that is online. A hot wallet can be accessed from anywhere in the world and from most internet enabled devices. For this reason, a hot wallet is susceptible to attack from hackers if it is not well secured. Maximum security on your Bitcoin can only be attained using a cold wallet
What is a Cold wallet?
A cold wallet is a wallet that is not connected to the internet. It usually on a device or a paper. A cold wallet is the safest form of Bitcoin wallets. It is almost impossible to hack a could wallet. The hacker would have to get hold of your device and your passkey to access your cold wallet which in this case would be a human error.
The idea is, for long-term storage, store your bitcoin in a cold wallet. However, use a hot wallet for day to day transaction in bitcoin.
Also, Hot wallets are usually free while Cold wallets may cost to purchase the device.
Types of Hot wallet
Online Wallet or Web Wallet
This is the most common type of Bitcoin wallet. Just like the name implies, web wallets are hosted in the cloud by a third-party company. It has an advantage of being able to be accessed from location and from any web browser on most Internet-enabled devices. Examples of companies that provide web wallets include. Coinbase, Luno, Blockcahin.info etc.
A mobile wallet is a wallet that comes as an application installed on our mobile devices, mainly Android, iOS and Blackberry. Most web wallet provided has a mobile wallet app which is synced to the online wallet. Another good example of a mobile wallet provider is Coinomi. Coinomi only has an Android version as at now no iOS, desktop or web-based wallet. Coinomi provided wallet for bitcoin and 277 other cryptocurrencies. Click here to read more on Coinomi.
- Desktop wallet.
Just like the mobile wallet above, desktop wallets are wallet application downloaded and installed on a personal computer or laptop.
They are easy to use and available for the different operating system. Example of desktop wallet include. Amory and mSIGNA. There are others which are no longer supported like Multibit and Hive
Types of Cold Wallets
Yes, your Bitcoin wallet can be in paper form. The paper wallet contains two things;
- Public address to received bitcoin and
- Private key to gain access to bitcoin and spend it.
There are several websites offering bitcoin paper wallet, one of them is bitcoinpaperwallet.com
One of the advantages of the paper wallet is that it is not prone to attack from hackers since it is offline.
The hardware wallet is one the safest and convenient type of bitcoin wallet. It is advised that anyone having bitcoin for storage in excess of $1,000 in worth should have a hardware wallet. Hardware wallet comes in form of a USD stick. You simply plug it in your computer to access and send Your Bitcoins. The hardware wallet does not need to be plugged into a computer to receive Bitcoins.
There are Three major manufactures of Hardware wallet. They have been around for some years and have good customer support. You can visit any of the sites to buy from them.
Bran wallet is bitcoin stored in the brain. Don’t get me wrong I am not saying a chip is going to be implanted in your brain. No, definitely not. As stated in the third paragraph above, bitcoin is not technically stored anywhere, what is stored in your private key to access your Bitcoin and Public bitcoin address to receive bitcoin. So if you can memorize these two long stretch of characters, you have yourself a brain wallet.
These are the type of Bitcoin wallet available. If you have any questions or you know of any type of Bitcoin wallet we might have missed, please leave us a comment. Thank you.