What is the cryptocurrency Bitcoin was discussed in the article: "What is Bitcoin". Now let's move on to consider bitcoin wallets.
Each of us is accustomed to the fact that an online wallet is an account in a payment system or Internet banking, which displays the amount of money available. The bitcoin system is similar in nature, but only outwardly. In the Bitcoin network, information about your money is stored in a blockchain, copies of which are available on all computers in the world that are part of this network. Thus, no one will be able to forge the balance. A BTC wallet can be thought of as your personal way of interacting with the entire bitcoin system, just as an online wallet in Internet banking is a "bridge" between you and the financial system.
Each bitcoin wallet contains a private key - a secret code that you can use to manage your coins. In fact, it is not the money (bitcoins) that we need to store and protect, as we are used to, but the private keys that confirm that the bitcoins in the account are yours. To sum up:
Types of Bitcoin wallets
Hardware
Software
Online
Which wallet will suit you:
Invest and / or collect - choose a hardware wallet.
You are engaged in mining, playing on the stock exchange - then you can use the software cap.
You earn on taps and perform daily transactions - an online wallet is also suitable.
This division is only our point of view, you can choose a bitcoin wallet based on your own needs. Each wallet has its advantages and disadvantages, in addition, each of them has a different purpose. Some focus on security, others on privacy, and still others on quick access to facilities.
Therefore, you should carefully study the pros and cons of each type of wallet and specifically each wallet.
Hardware wallets
This type includes physical electronic devices created exclusively for storage and protection of cryptocurrencies. The essence of such a wallet is that it is super reliable, but to access the money you need to connect the device to a PC, smartphone or tablet.
Currently, the best bitcoin hardware-type wallets are represented by the following three:
Ledger Nano S
Vault
KeepKey
Because bitcoin is a digital product, a cybercriminal can hack into your computer by accessing a software or online wallet (if you stored passwords somewhere on your PC) and steal your money because you will have a private key.
With a hardware wallet in hand, you will store the private key offline, which will avoid such situations. Yes, thieves can steal the device itself, but it is protected by a PIN. Moreover, when initializing the wallet, a special recovery code is created, thanks to which you can regain access to your coins.
Benefits:
The safest way to securely store cryptocurrencies.
It is easy to restore the wallet in case of loss, theft or damage.
There are virtually no potential vulnerabilities.
Simple setup procedure.