Classified the Types of Bitcoin Wallets
By Space Coast Daily // April 15, 2021
Bitcoin wallets are used to store the cryptocurrency or bitcoins and without a bitcoin, you cannot move bitcoins or cannot receive bitcoins.
Many people think there are many types of bitcoins as per green profit system and they are confused about the types of bitcoin wallets. So this article will help you to understand the types of bitcoin wallets.
There are the four types of bitcoin wallets that are given below:
1. Software wallets
2. Hardware wallets
3. Paper wallets
4. Web wallets
1. Software wallets
A software wallet is an application that is used to store your bitcoins. We have seen many applications like Paytm and many other applications and you have seen that there is the Paytm wallet which is used for sending and receiving money. Similarly, the software wallets work. It is an application that is used to store bitcoin.
It is the software of application that is installed on your computer and only you can access your bitcoin wallet because it is installed in your computer hardware drive. It is powerful software that is supported by bitcoin and you can download it by visiting this website- https://bitcoin.org and the name of the software is software core.
When you will install this software on your computer it will automatically generate the wallet.dat file in your computer and this file contains all the data about your transactions and wallet. So take a backup or copy of this data file and keep it safe in an external storage device or on another desktop or laptop or mobile phone. This is the safest and secure wallet which is supported by the bitcoin foundation.
2. Hardware wallet
There are many companies come into existence and they are inventing a new version of a bitcoin wallet named hardware wallet. With the help of this hardware wallet, you can store your bitcoins into a physical wallet means hardware that will be portable and you can spend your bitcoin from any place buy you must have an internet connection to spend the bitcoins.
3. Paper wallet
If there is any wallet with super protection, the wallet is a paper wallet. Yes, a paper wallet is the safest wallet than other bitcoin wallets. There are many wallets that provide security at a certain level but there is no competition for paper wallets.
A paper wallet is also known as cold storage or offline wallet. Yes, offline wallet. Bitcoin transactions are stored on a blockchain and the paper wallet is not connected with the blockchain, Paper wallet is mostly used to store the bitcoin for a certain period if you do not want to spend now. You can take it in your paper wallet storage for the long term but when you want to spend you just need to connect it to the private key which is very essential for the spending of bitcoins and without the private key or secret key your cannot spend your bitcoin.
Since your bitcoin wallet is offline or inactive it means there will be no malware or virus that can attack your bitcoin wallet. Make sure while you are creating a paper wallet, you must be offline, it means disconnecting from the internet while creating your paper wallet address. If you will create your paper wallet with having proper internet connection there may be chances of injecting the malware and virus into your computer and it will access your bitcoin wallet and private key and it can easily move your bitcoins from your bitcoin wallet. So remember while creating your bitcoin you must offline.
4. Web wallets
The is the fourth type of bitcoin wallet which is provided by third parties like companies or exchanges. There are many new exchanges that come into existence and they provide a certain level of security.
There is the limitation of using the bitcoin platform is that all the transactions like buying and selling are stored on the blockchain and anyone can see the wallet address, spending, and receiving of a wallet address. So people want anonymity or people do not want to display their transactions so by understanding the problem of bitcoin users these exchanges come into existence.
We do not recommend using these platforms because if you will lose your bitcoin due to the hacking of exchanges or system failure, you cannot get back or you cannot claim it back.