Bitcoin wallets have been made available to improve and simplify the entire Bitcoin experience. From buying to selling to trading, all of this is made so much more possible with the application of a Bitcoin wallet.
So What Is A Bitcoin Wallet?
To best understand what a Bitcoin wallet is it’s easiest to look at the conventional banking system. With everything online now, we all have online banking platforms that allow us to manage our money digitally. We can get paid into these accounts, we can pay out of these accounts and we can also use this money to trade on currency exchanges or stock markets.
The same can be applied to the Bitcoin wallet. It’s the application that is used to manage your cryptocurrency. The only difference with the Bitcoin wallet is that it is used to store your private keys that are essential for transactions. The Bitcoins are not actually “stored” in the wallet as they are not physical things.
If you were to sum up the answer in one sentence:
A Bitcoin wallet is an online application that is used to manage the private keys needed for Bitcoin transactions.
What Types Of Bitcoin Wallets Are Available?
There are a number of different Bitcoin wallet providers and they generally fall into one of these categories:
Hardware Bitcoin wallets are actual pieces of hardware that plug into your computer and store your private keys. They are designed to be exceptionally secure but can be costly.
- Online Bitcoin wallets
Online Bitcoin wallets are a popular choice as they are free and easy to obtain. They are secured with your credentials, username, and log in.
- Software wallets
Software wallets are downloaded to your computer or mobile phone as an application. These are also very popular as they offer more security than online wallets, but are still as easily accessible. Our Wirex wallet is one such example of downloadable Bitcoin wallet applications.
A paper wallet is, quite literally, a wallet that you write down on paper. It is a completely offline method.
If you aren’t sure which one best suits you, or you want to know which ones we recommend, check out our Bitcoin wallet reviews.