If you are here then definitely you have hear about bitcoin and bitcoin wallet . What is btcoin wallet ?
There is misunderstanding even most of self-proclaimed Crypto-Currencies experts, about what a bitcoin wallet actually is? In this post bitcoin wallets explained easily. In a simple word “A Bitcoin wallet is a program to send and receive Bitcoins, store Bitcoins and monitor Bitcoin balances.”
Bitcoin wallet means the online storage of your bitcoins (most famous crypto-currency). Wallet are one of the first thing in bitcoin rule books. Bitcoin wallet monitor bitcoin addresses on the blockchain and update their own balance with each transaction. There are also many bitcoin wallets which will offer you extra bonuses and advanced features you won’t get elsewhere. Unfortunately, it isn’t always easy to choose best bitcoin wallet when you are beginner. This confuse’n is because the load of many different types of bitcoin wallets.
Bitcoin Wallet Explained : How It Works?
Bitcoin wallet is a online software stored you bitcoins, it tells you how many bitcoins you have and you can take out or give somebody direct from you wallet by just choosing an amount and send only, but the reality is that your bitcoins are not stored in any single location, They are stored inside the blockchain that’s why you don’t need to open your bitcoin wallet to receive coins-because they are not actually sent to you and the blockchain is constantly updated your wallet with every transaction. Here is bitcoin wallets type –
1)- Private Keys :- This is not a bitcoin wallet but without private key knowledge you don’t know about bitcoin wallets. A private key is just a very long string of numbers and letters that act as a password of your bitcoin wallet . Private key is necessary for accessing bitcoin wallet and every address have secret key. These private key is difficult to remember and awkward to type, which is stored inside your wallet. If any one knows your private keys has control over your bitcoin wallet and bitcoins. Every bitcoin wallets core function is storage, creation and use of secret key. A bitcoin wallet create and control multiple address and you make a single payment by receive coins from multiple addresses. You can choose how many bitcoins to takes from each your address is called “coins control” feature. A standard bitcoin wallet create wallet.dat file for containing private keys
Bitcoin Wallet Explained : Types of Bitcoin Wallets
There are various different types of bitcoin wallet. Some bitcoin wallets hold a full copy of the blockchain to validate each and every transaction this is called full nodes. Others bitcoins wallets also known as SVP Wallets or lite wallets don’t hold full blockchain copy. SVP wallet means ‘Simple Payment Verification’ that types of wallets are not consume very large space on disk and works very faster.
Desktop Computer Wallet:- This type of wallets are installed in PC. Computer based bitcoin wallet gives you control over your coins. You can access you wallet through your PC. Some experts says that because of viruses this option is not safe, but if you think like this then you have to sale your PC because no one is safe on this time. You have to follow some security rules and this option should be safer too. On the other hand you have full responsibility for securing you bitcoins from any computer malfunctions.
Bitcoin Core ‘Full Node’
A node is a simply a point on a network. Running a full node means that you download the full copy of blockchain in your PC and keep it up to date while making transaction. The blockchain is very large to download and can be hassle to update.
You can download Bitcoin Core for Windows – Mac – Linux – Ubuntu
Lightweight Desktop Bitcoin Wallet :- These type of software’s run your own computer but they doesn’t need full downloaded copy of whole blockchain. That means you take advantage of desktop software without hassle. Your private key is save in your PC, meaning that you retain complete control over bitcoin wallet & coins. Most of software’s are includes in this category but the failure rate of software is 96%, but don’t worry Electrum and Multibit is popular choice.
Bitcoin Wallets APP:-
In digital world everything is possible and now you can install your bitcoin wallet in your Mobile. These type of bitcoin wallets are very useful because you can carry you wallet and use it for shopping “Bitcoin Accepted”. These type of wallets are more secure with passwords and many more security like many phones are open from fingerprint and more phone are safe from viruses.
Web based bitcoin wallet stored your private on their server. You can log in to your account with them to access your coins. This is secure and security responsibility takes your wallet provider company. That means you trust your company to secure your coins and not disclose to anyone, and keep safe your coins on your behalf.
Popular choice in this category is CoinBase and XAPO
Multi-Sig Bitcoin Wallet Explained :-
Are you know about Joint Bank Account, Multi-Sig wallet is same as where two people need to sign a transaction before it sent. Two people (your partner & you) sign are required in these type of wallet. Multi-sig is more secure than others, it securing your account by providing your own private keys. You can add 2 Factor authentication for advance level security.
Popular choice in this category is Green Address
Hardware Bitcoin Wallets:- Some of bitcoin users think that hardware wallet is safe. When Bitcoin Wallet Explained hardware wallets is must because it is a piece of hardware with custom designed. This is called cold storage, which means long term savings and doesn’t need to regular access.
Popular choice in this category is Trezor and Ledger
Paper wallet :- As you know that your bitcoins are not actually stored in you bitcoin wallet it’s stored in blockchain which is the shared record used by bitcoiners. This means you don’t need to any kind of storage to store your coins you need only your ‘Private Key’ to spend your coins.
Paper wallet is not actually a wallet it’s only a piece of paper where you written or print your private key. The advantage of this type of wallet is that hackers not stole you key, but if someone break your property then GOD knows better…
Hot Bitcoin Wallet Explained :- The most popular types of wallet that is connected to internet in some ways. This type of bitcoin wallet are installed on computer even a wallet installed on mobile phone but check your mobile data connection to transfer.
Cold Bitcoin Wallet Explained :- The most secured bitcoin wallets . Cold storage refers to any type of wallet that is independent of any Internet connection and therefore cannot be hacked remotely.