BITCOIN for Beginners: A guide to the different types of bitcoin wallet
What is a Bitcoin wallet and what are the different types and options?
Many of us are joining cryptocurrency trading. However, many are puzzled by the fact that buying Bitcoin is not as easy as it seems. Before you can buy Bitcoin, you need to install apps. One of the applications you need to buy Bitcoin is a digital wallet. This article is a beginner's guide to Bitcoin, focusing on the Bitcoin wallet and its different types.
First of all, you should learn what a cryptocurrency wallet is. It's not really like a real wallet that holds money and other personal items. A Bitcoin wallet doesn't actually contain Bitcoin. All of the 21 million coins issued by Bitcoin from the beginning are stored on the blockchain and nowhere else. What the wallet does is connect to a specific address in the Bitcoin blockchain, indicating ownership of the coins. The blockchain is a public database containing a record of all bitcoin transactions. A Bitcoin wallet is primarily a tool that interacts with the blockchain to facilitate sending, receiving and managing Bitcoin.
Different types of cryptocurrency wallets
For those of you who don't want to install apps or programs, you can simply use web wallets. Some cryptocurrency exchange sites offer web wallets. You can send, receive and manage Bitcoin through a browser and Internet connection. The risk here is that some websites store private keys and addresses on a centralized server and are vulnerable to hacking.
A desktop wallet is more secure than a web wallet. The software is downloaded and installed on your desktop or laptop computer and allows full management and control of private keys, addresses and funds. You just have to be very careful because viruses and malware infecting your computer can make it vulnerable to hacking. A huge problem can occur if the hard drive is damaged and no longer available. In this case, saved keys and addresses will be lost, which also means loss of Bitcoin ownership. The solution is quite simple: just back up your data.
Mobile wallets are usually preferred by most. It's convenient, and you can manage Bitcoin anywhere by installing an app on your cell phones or tablets. Almost all digital devices are prone to Internet hacking, and they all experience technical bugs as the gadget gets older and used more and more. Just remember to always keep a backup of your data and beware of malware and viruses.
There are also standalone hardware wallets, which are external digital devices that use a random number generator to generate public and private keys. These keys are stored in the device. This acts as a vault and provides more security. Access is limited because the device must be connected to a computer to access the keys. This is recommended for those with large amounts of Bitcoin.
A paper wallet is probably the safest way to store Bitcoin. The program generates private and public keys, and they are printed on a piece of paper with a QR code. The paper just needs to be secure, and backups can exist through photocopies. Because once the paper is lost and no copies are made, you also lose your Bitcoin.
Based on the information provided above, you can simply choose the right one for you. This beginner's guide to Bitcoin wallet is just the tip of the iceberg. There is more to learn when trading cryptocurrency. It is highly recommended that you do your research and learn so that you can make informed decisions.