Welcome to this page where we will be talking about Different Types Of Bitcoin Wallets.
Hi, my name is Musa “The Giant” from Durban, South Africa.
Thank you for visiting my website and showing interest in learning about Different Types Of Bitcoin Wallets.
Here is what we are going to cover:
- Software Wallets
- Online Wallets
- Paper Wallets and
- Hardware Wallets.
Let’s get started…
1. *Software Wallets*
Software wallets are Hot Wallets that require the download of software clients to create and use a wallet. Software clients are available for both — desktop platforms and mobile platforms.
Desktop software clients like *Bitcoin Core* usually require downloading the Blockchain, which is more than 100 GB in size.
This could be a real deal breaker if you’re on a limited bandwidth or limited storage space. Thankfully, desktop software clients like *MultiBit* allow you to create and use a wallet without requiring you to download the Blockchain information.
*Armory* is another popular alternative, but it can be little difficult for non-technical users to set-up. All these software wallets are cross-platform and highly secure.
My personal favorite Software Wallet is *Exodus*. There is no mobile app for this wallet yet. I use it for long term holdings. I like the fact that is support different cryptocurrencies like Litecoin, Ethereum, Dash, EOS, Golem, Gnosis, OmiseGo, Augur and others.
Software clients are a lot more easy to use on mobile devices. You can download a wallet app and start creating and using your new wallet right away.
*MyCelium* offers a robust wallet client for Android and iOS complete with backup features.
2. *Online Wallets*
Online Wallets or Web Wallets are the easiest to use amongst all the different kinds of Hot Wallets. Creating an Online Wallet is as easy as signing up for a new account on *BlockChain*, *LocalBitcoins*, *Coinbase* or any other similar service. Also, you can access your wallet from any device connected to the internet, so making transactions couldn’t get any easier.
Also, you can access your wallet from any device connected to the internet, so making transactions couldn’t get any easier.
But there are certain trade-offs of using an online wallet. Most importantly, your private keys are stored on another server, which could lure prying hackers all-around the globe to steal them. For instance, back in 2014, hackers stole Bitcoins worth $460 million from *Mt. Gox*, a popular Bitcoin exchange site. Online wallets should be used only for making small everyday transactions. If you hold a large number of Bitcoins, you may want to stay way from online wallets.
3. *Paper Wallets*
A Paper Wallet is a fancy term for printing out your public and private keys on a piece of paper. Paper Wallets are more secure than using software or online wallets because you physically have your keys printed on a piece of paper. As you might have guessed, it is a Cold Storage method, as it is offline.
Most of the online/software wallet services allow you to print your existing wallet keys.
While more secure than online counterparts, a paper wallet can be torn, water-damaged or destroyed in many ways because you know, it’s on paper. Therefore, it is important to make multiple physical copies of this paper and make sure you keep it inside a locker or another secure place.
4. *Hardware Wallets*
Hardware Wallets are stand-alone hardware cold-storage devices that generate keys on the fly while making a transaction. They are USB shaped devices, which have to be plugged into your computer while making a transaction.
Hardware wallets are secured from your regular computer malware because it generates private keys offline, on the device itself. They are extremely convenient to use and do not require the understanding of complex technical details.
They also provide sturdy backup options, so you do not lose access to your wallet. They can be also secured with a password to combat theft. Overall, as you carry your private keys along with you all the time and it is not prone to computer malware, hardware wallets are the *most secure option*.
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Click HERE to follow a Step-By-Step guide where I show you exactly how to create your online wallet.
Feel free to leave me a comment, questions, or suggestions below as well.
Musa The Giant