Bitcoin Wallet: What is the function?
A Bitcoin Wallet is a necessary tool when dealing with Bitcoins. It serves a similar purpose to a physical wallet. Everyone has a physical wallet to carry cash and coins to places for transactions. Similarly, a Bitcoin Wallet makes it possible for the investor to store their Bitcoins. Since Bitcoin is an intangible currency, the Bitcoin address is stored in the Bitcoin Wallet in an encrypted format. There are some Bitcoin Wallets that have the provision for storing other cryptocurrencies besides Bitcoin.
Bitcoin Wallets are not accessible without the help of private keys. These wallets can be of various forms, which we will discuss eventually. Click here to know more about the news spy app.
All About Bitcoin Wallets
A Bitcoin Wallet is not without a link with the Bitcoin Blockchain. Even though its primary function is to store Bitcoins, the addresses stored in the wallet represent a blockchain address. Each wallet has a unique set of numbers following the user’s blockchain address. This pattern of numbers constitutes the Private Key.
The Private Key is the essential component of the entire process to obstruct theft. The key ensures that the user can gain access to his Bitcoins. If a hacker gets his hands on the private key, he will access someone else’s Bitcoin and relocate them as per their convenience. The owner will lose all control over his Bitcoins.
Types of Bitcoin Wallets
There are four types of Bitcoin Wallets in existence currently. They are:
- Desktop Wallets
These types of wallets are entirely within the purview of the user. These are present on the desktop or laptop of the user. Among the most widely used desktop wallets are Bitcoin Core, Electrum, and Armory. Some desktop wallets come with node software or exchange integration features that add to the wallet’s functionality.
However, even with all the added features, there are few risks in having a desktop wallet that cannot be averted. Once the device containing the wallet gets compromised, the user loses their entire cryptocurrency.
- Mobile Wallets
These wallets are akin to the ones on the desktop. Mobile wallets are installed on smartphones or any other similar device. Since it is a mobile device, transactions become extremely easy. With a proper internet connection, the user will be able to make transactions happen at any point, irrespective of where they are located.
Mobile wallets are always compatible with Android or iOS devices. Some popularly mobile wallets are Hive Android and Bitcoin Wallet. It faces the same threat as desktop wallets but to a much higher degree. Misplacing a mobile device is more of a possibility than getting one’s desktop lost.
- Web Wallets
This form of wallet is widely used among Bitcoin investors. It is as easy as checking mail. Logging in to one’s web wallet is a simple task, and it can be done at any point in time, regardless of where the user is.
However, with the convenience of easy access comes a significant security issue. The web wallet is also prone to be hacked. An expert hacker can quickly get their hands on some basic details and track down the web wallet online. It has often been the case that such users have lost their Bitcoins in an instant.
- Hardware Wallets
These are the most secure forms of wallets so far. The Bitcoin addresses are stored in them and locked away. The user will not be able to access it anywhere or anytime, but only when he is in a secure position to do so. It is the most challenging wallet for a hacker to get through.
It is advisable to choose a Bitcoin wallet only after a thorough understanding of the nature of transactions the user will perform. Under all circumstances, keeping the private key safe is crucial.