Cryptocurrency is far from traditional currency, so keeping it safe is different as well. That’s why you need a cryptocurrency wallet.
One of the main ideas behind Bitcoin is empowering people to be their own banks. Since Bitcoin is not a physical thing, it can be stored almost anywhere (including physical things). There are several types of Bitcoin wallets that vary in terms of safety and security, convenience, accessibility, ease of use, device type and so on.
Since owning Bitcoin wallet private key is the only way to claim and prove ownership of your bitcoins, Bitcoin wallets and security go hand in hand.
Bitcoin wallet types
Online (“hot”) wallets, where the private key is stored online or on devices connected to the internet – e.g., on cryptocurrency exchanges or other websites, computers, tablets, or smartphones.
Offline (“cold”) wallets, where the private key is stored on paper or offline hardware like a password-protected USB, computer, or simply in one’s head (when you memorize a special phrase to access your funds). Besides, there are special encrypted cold storage hardware devices like Ledger or Trezor.
Online, or “hot”, wallets are less secure due to the threat of hacking. Website wallets are especially vulnerable as you must reveal your private key to a third party. But hot wallets are more convenient for daily use.
It’s thus recommended to use both types of wallets – hot wallets to hold small amounts of bitcoin for daily transactions, and cold, or offline, wallets for storing larger sums. In any case, you can have as many wallets as you want.
Bitcoin wallets for beginners
Here are several easy to use Bitcoin wallets that you can download, install, and use immediately.