What Is a Cryptocurrency Wallet?

A Bitcoin or any other cryptocurrency wallet is a special software used to store coins you have earned by mining or trading. Every bitcoin address has a special private number that transfers itself to a wallet once the mining procedure is done successfully. Bitcoin wallets serve to sustain transferring and receiving currency and confirm that a particular person owns a certain amount of coins. Bitcoin wallets are available in all possible forms: web, mobile, desktop, and hardware.

How it works?

A private number mentioned in a previous paragraph serves as a password to your personal wallet. This particular number gives you a right to get and send bitcoins to other users. In a word, a person that has a private number of a wallet owns the coins and has a control over them.

This private number is also used to generate your personal address. You give this address to people who would like to send their bitcoins to you. Still, the private number stays in secret even if you share your address with others. In a word, a wallet functions as a generator – use and store a private number.

Keep your private key in secret to protect your wallet, unless you can lose your bitcoins.

How to choose a wallet?

First thing to consider before you install a wallet is that there are different types of them used for different purposes. Wallets vary in accordance to the amount of currency you need to store as well as the level of security and convenience you want to get.

  • Hardware wallets

Hardware wallets are physical devices. Before making any operations with your coins, you should connect a hardware wallet to a computer or mobile phone.

Hardware wallets are for those users who really care about security. With these devices, you keep your bitcoins away from the risks connected with the vulnerable environment of the Internet. With hardware wallets, you save your bitcoins from any hacker attacks.

  • Online wallets

These are the wallets that store your coins online. They can be installed to your computer and accessed with a password.

  • Mobile Wallets

Mobile wallets are convenient because they allow you to keep your coins with you wherever you are.

Besides, don’t forget two more options of cold storage – desktop and paper wallets.

Before you choose the most suitable option for you, mind that you can use more than one wallet at the same time. For example, you can keep your larger savings on a hardware wallet and create a mobile wallet for your daily needs.