Bitcoin wallets are similar to the usual bank accounts. These wallets are used for storage, sending and receiving of bitcoins. They have a unique design of operation. They operate using private and public keys. Private keys are used to provide access to your account while public keys, on the other hand, are used in sending and receiving money. Nowadays, there exist so many bitcoin wallets although all of them fall into 4 different categories.
Online wallets are also known as web wallets, a type of hot wallets (those that are only designed to operate online and have their secured storages online). They are the most comfortable kind of hot wallets to use. They are easy to access and login. One can also log in via any device as long as it has access to the internet. They are secure because their private keys are stored on another server.
These are a version of hot wallets that require downloading software clients that are meant to create and use them. Software wallets are also multi-platform because they can be installed on both smartphones and desktops. Mobile block-chain versions are fully personalized and are very easy to use. You can control your account with a lot of ease and with all tools provided.
Hardware wallets are standalone cold storage devices that have an inbound chip that has a capability of generating private keys with ease. They mostly look like a USB that can be connected to the computer or the phone with special USB cables that are strong. Hardware wallets are known to provide utmost security for your investment and cryptocurrencies. This is because of their offline-enabled mode of operation. They are very easy to use and don’t necessitate one to learn a lot of technical details to maneuver within. They provide a perfect experience when monitoring, securing and managing your investments.
A paper wallet is just a fancy term that means printing out your public and private key on a sheet of paper. They are considerably secure compared to online and software wallets because when printing, it’s you alone having the printouts and when viewing, you ascertain that no any other person is around to peep. Online and software wallets are vulnerable to hacks and so might be a bit insecure when working with them, especially when working with large chunks of cryptocurrency investments.