Are you looking for the right bitcoin wallet for your needs? In this chapter we will help you find exactly that!
The first step before you want to buy bitcoins is to choose a bitcoin wallet.
Well, now you might be wondering.. a wallet? Why would a digital currency need a wallet? Storing your bitcoins in a personal wallet is the safest way to use and store your Bitcoin. It’s for that very reason that we strongly advice you to transfer your Bitcoin to a private wallet. If you choose to leave your Bitcoins with a platform you always run the risk that the platform goes bankrupt or that it is hacked. Which means that you have lost your bitcoins.
Of course, the chance of this happening is very small, but it’s not a big problem to set up a wallet. So there should be no excuse for not having your own wallet for your valuable bitcoins.
What is a Bitcoin wallet
A Bitcoin wallet is a digital wallet for your Bitcoins. Just like Bitcoins are a digital form of physical money, a Bitcoin wallet is a digital translation of a physical wallet.
In a Bitcoin wallet you can create and manage Bitcoin addresses. A Bitcoin address is similar to a bank account number that you would receive from your bank. But as you already know Bitcoin does not have a central manager (so in this case a bank) that does that for you! So you can make Bitcoin addresses yourself, that is all in contrast to your bank free of charge. You can make as many addresses as you want!
A Bitcoin address consists of a private key and a public key that both contain a series of numbers and letters. And they look like this: “1KV2ybMT5vUmEepogj5F75si1ob455zade” . The public key is what you give to a person or organisation that you want to receive Bitcoins from. The private key is what you use to send / spend Bitcoins. It’s important that you ensure that your private key is always safe and not visible to others.
The operation is almost identical to how you would do it with a traditional bank account. The only difference is that you have two special addresses for sending or receiving bitcoins. If you want to receive bitcoins, all you have to do is give your public key to the person in question. A nice extra in terms of technology is that you can often make payment by sending or scanning a QR-CODE to perform these actions.
Types of Bitcoin wallets
There are 5 types of Bitcoin wallets to choose from, and you can certainly be a bit overwhelmed if you just step into the world of Bitcoins. But do not worry, that’s what this guide’s for! So let’s look at what you can choose from:
‘Cold’ and ‘Hot’ Bitcoin wallets
Before we dive into which types of wallets are available to choose from. It’s wise to explain what is meant by ‘cold storage’ and ‘hot storage’ when we talk about Bitcoin wallets. These are terms that you will often encounter in your choice!
All types of Bitcoin wallets can always be classified in Hot or Cold wallets.
Cold Bitcoin wallets
Cold Bitcoin wallets are wallets that are not connected to the internet. You usually have the currency in your hands, in the form of a USB stick, for example. As a result, this way of storage is often considered safer.
Cold storage is more suitable for the long-term holders of bitcoin that will be held without trading or spending. Similar to a savings account!
HARDWARE BITCOIN WALLET
Hardware bitcoin wallets are the safest way to store your bitcoins. A hardware wallet is a small computer or smart card that is specifically built for generating Bitcoin private keys offline.
Hardware wallets are a form of cold storage and are the best way to store your bitcoins for a long time. We also strongly recommend that if you own a large amount of bitcoins, you can transfer your bitcoins to a cold storage.
Hardware bitcoin wallets are aimed at bitcoin owners who want to store a large quantity of bitcoin for a long term. Hardware bitcoin wallets also do not require you to trust in a third party, which is the case with almost all other wallets!
Because of the popularity of these types of wallets and that of bitcoin, there are more and more options every year when it comes to these types of wallets. At the moment, however, there are 3 wallets that are clearly performing the best, and are therefore the most popular with bitcoin holders.
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