It has been more than a decade since the world was first introduced to cryptocurrency in the form of Bitcoin. The rise in value and popularity makes Bitcoin a precious trading asset and investment opportunity.
One of the most significant advantages of trading in Bitcoin is the safety associated with this method of payment. Many cryptocurrency enthusiasts claim that transacting in digital currency is safer than dealing with traditional banking methods. Because Bitcoin does not exist in physical form, it is held and traded through a software program referred to as a Bitcoin wallet. This wallet digitally protects and stores the information and assets of the user.
A Bitcoin wallet is exclusive to each owner and only they can access it. This is because, for every wallet, a unique key (set of numbers) exists that is known only to the owner of the wallet, from which the owner can send and receive virtual currency.
Advantages of Virtual Storage
- Keeps Bitcoin and other digital currencies stored safely
- Facilitates Bitcoin payments and trading
- Wallet owners have the convenience of accessing their funds at any time
Disadvantages of Virtual Storage
- Certain types of exchanges may be subject to high transactional fees
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Choosing a Bitcoin wallet
Today, Bitcoin wallets take various forms to accommodate the different types of access required for its users. Here are the main types of wallets in use today, and where to find them, also see this website for more wallet options:
Desktop wallets are downloaded and installed straight onto your desktop computer, where your security key is stored on your hard drive. Because desktop computers are physically harder to steal than laptops or mobile devices, they are inherently safer to use. The best desktop wallets to consider are MultiBit, Bitcoin Core, Armory, and Electrum.
Online or Web wallets are secure wallets hosted by a third party and key saved onto a server. Because the key is saved online, it is imperative to choose a reputable web wallet such as Blockchain or Coinbase. The advantage of an online Bitcoin wallet is that it is accessible from both desktop and mobile devices as long as the user is connected to the internet.
For people using their digital wallets more frequently, a mobile option would be a good choice. Similar to the desktop app, the mobile wallet and key are installed directly onto your mobile device. This enables you to shop and trade directly from your phone via QR scanning and Tap-to-Pay. Good mobile options include Mycelium, Bitcoin Wallet, and Blockchain Wallet.
To date, hardware wallets have had no verified incidents of theft and, as such, are considered the most secure form of storage available. This is a unique form of storage in that Bitcoins are stored onto a physical device that is accessed by plugging it into your computer.
An added advantage of using this option is that it is practically immune to computer viruses, ensuring safety to the owner. They are, however, the only wallet requiring payment for the hardware involved. Investing in a trustworthy device such as KeepKey or Trezor will make sure your Bitcoin remains secure.
The digital world requires the same protection as the physical world and without a bitcoin wallet your digital assets would not be safe. This quick guide is meant to help you understand what digital wallets are and also how to choose one depending on your own needs. Bitcoin wallets are the safest way to store BTC and everyone who is looking to take a step into the digital world will sooner or later find that they need one.