Crypto basics: All you need to know about Bitcoin wallets

Bitcoin is a digital asset that you can invest in like stocks or properties. The main difference is that it needs you to participate in its network to keep track of what you own and how to manage it. All of this can be done using the Bitcoin wallet, your trusty companion as a participant in the asset’s economy. 

What is a Bitcoin wallet

A Bitcoin wallet is a platform designed to store and control cryptocurrencies. It can be an app that you can install on your phone, a website that gives you access everywhere, or a hard drive  you can keep safe in your pocket. Either way, they all serve the same purpose of helping investors and traders in the crypto industry.

What is Bitcoin if not an asset for profit? The simple answer is that it can also be a mode of payment. More modern wallets are also designed to help users transfer Bitcoin to another wallet either as remittance or payment for services rendered. 

What are different types of crypto wallets

As mentioned, there are many types of wallets. There are more nuances between each of them other than how they look which serve as the factors to deciding which one to use at a given time. 

All wallets are differentiated as either hot or cold based on their connectivity with the network. Hot wallets are always connected and are built as software that can either be accessed by a web browser or installed on your device. It’s efficient for active Bitcoin traders but it poses risk to hackers if your device is left unprotected. Wallets have independent security measures that have grown with innovation so there is no worries in most cases.

Cold wallets are disconnected from the internet but they are hardware that you have to buy whereas a hot wallet is often free. These are ideal for Bitcoin holders thanks to their multiple layers of security on top of being away from internet access 24/7. If you don’t plan on moving any digital assets frequently, then this is the better option for you. 

Hot wallets also come in various forms such as being mobile apps, desktop software, or bowser extensions. Each one also has various options between those that support the ERC20 network and those that don’t. If you are using Bitcoin and not Ethereum-based crypto, then you won’t need a wallet with Ethereum interaction feature. 

What you need in a secure wallet

Much of what is Bitcoin limit as an asset is greatly affected by the wallet you are using. You need one that is supported by the best exchanges in your country like Binance and Coinbase. It is also ideal for a wallet to have mutual support with another wallet for additional security as well as versatility. 

Your wallet should also support many cryptocurrencies rather than specialising in a few. Even if you only plan on investing in Bitcoin now, you can easily change your mind to have a more versatile portfolio when you learn more wise investments. Keep your options open for more opportunities to maximise your capital and profit in crypto with the help of wallets. 

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