TYPES OF BITCOIN WALLETS

Margie D. Moore
Creating Simple Cryptocurrency using .NET and C# — Part 3. Wallet | by I  Putu Kusuma Negara | Medium

A Bitcoin wallet is hardware or software that allows you to store and transmit Bitcoins. The private keys required to sign Cryptocurrency are stored in secure wallets. Anyone with access to the private key can manage the coins linked to that account. Hardware wallets are perhaps the most secure crypto wallets. Some wallets are capable of storing and making multi-cryptocurrency transactions. A crypto wallet is a computer application or hardware device that can connect with the Blockchain. Although many people conceive of crypto wallets as “storage” devices, they actually reflect cryptographic control over a blockchain address. Each Bitcoin wallet has a set of private keys, or secret numbers, that correlate to the recipient’s blockchain address book. These keys are used to authenticate Bitcoin transactions, giving the user authority over the cryptocurrencies in the address. If an attacker obtains the private keys of a wallet, they can transfer the Bitcoins stored at that address to their wallet

There are 4 main types of secure Bitcoin wallets:

  • Hardware Wallets: 

Hardware wallets are one of the most secure wallets since private keys are stored on a physical device that is not connected to the Internet. These devices have the appearance of a USB drive. When a user wants to perform a Bitcoin transaction on their computer, they need to connect the hardware wallet, which could also sign transactions without exposing the user’s private keys. Hardware wallets are almost virus-proof, and successful thefts are extremely rare. Typically, these gadgets cost between $100 and $200. Both Electrum and Ledger are well-known producers of hardware wallets.

  • Desktop Wallets:

Desktop wallets are software applications that are placed on a computer’s desktop or laptop and provide the user full authority over the wallet. Additional features, like node software or exchange integration, are available in certain desktop wallets. Desktop wallets, on the other hand, are seen as insecure owing to the risk of the computer being hacked. Exodus, Armory, Hive OS X, are some well-known desktop wallets.

  • Web Wallets

A web wallet is an online service that allows you to transfer and receive Bitcoin. The fundamental benefit of online wallets is that they can be accessible from anywhere, on any device, much like email. Security is a matter of worry too. There is a major counterparty risk in addition to the hazards of phishing and malware to steal users’ credentials. Many Bitcoin users have discovered that their funds have gone after logging into a third-party site.

  • Mobile Wallets

Mobile wallets are similar to desktop wallets, except they run on a smartphone or other personal devices. Near-field communication (NFC) or scanning a QR code may be used by many mobile wallets to make rapid payments at physical businesses. Wallets for mobile phones are usually compatible with either android or ios. Mobile wallets include Hive Android and Mycelium Wallet. There have been several examples of viruses masquerading as Bitcoin exchanges, so do your homework before picking which to use.

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