A cryptocurrency wallet is a software program that stores private and public keys and interacts with various blockchain to enable users to send and receive digital currency and monitor their balance. If you want to use Bitcoin or any other cryptocurrency, you will need to have a digital wallet.
To give you an example of what a Bitcoin address looks like, here is the wallet address that is believed to belong to the creator of Bitcoin, Satoshi Nakamoto!
Cryptocurrency Wallet Types:
Paper wallets are essentially documents which contains a public address that can be used to receive Bitcoins and a private key, which allows you to spend or transfer Bitcoins stored at that address. Those are often printed in a form of QR-codes so that you can quickly scan them and add the keys to a software wallet to make a transaction. A paper wallet can be generated using services like BitAddress or Bitcoinpaperwallet that allow users to create a completely random Bitcoin address and a private key to it.
A mobile wallet is very similar to a desktop wallet as the wallet is downloaded directly to your device. You normally access your cryptocurrency wallet by downloading a mobile app, which also allows you to spend your coins in a physical store by scanning a QR code.
Web wallets are managed by third parties in general – that is they hold the private keys and the public keys of the user – meaning that the process of accessing Bitcoin or any cryptocurrency is significantly lowered – you don’t have to download the full client or acquaint yourself with various forms and methods inherent in wallet software.
Desktop wallets are to be downloaded to a specific laptop or computer and they can only be accessed from that particular device. Generally speaking, they offer a good combination of security and convenience. However, it is important to remember that if a hacker were able to remotely get hold of your device, they could gain access to your wallet.
Hardware wallets are one of the most convenient and safest options out there for storing your cryptocurrency. A hardware wallet is a type of cryptocurrency wallet where you can store your private keys in a secure physical device. The best available hardware wallets on the market at the moment are:
- Ledger Nano S
- Ledger Nano X
- Trezor One
- Trezor T