Before you start buying bitcoins, you need someplace to store it. That’s why you need wallets, or bitcoin wallets, or cryptocurrency wallets. Wallets come in different forms and each form offers bitcoin owners different levels of security, storage, and access options.
Now, it must be clear that such wallets do not actually hold your bitcoins. Instead, what it does is store your private keys, which are what you need to access a bitcoin address and spend bitcoins. There are five main types of bitcoin wallets:
Basically, you install this type of wallet on your computer. This provides total control of the funds and there’s also some level of budget safety to be enjoyed.
Thick desktop wallets allow you to download network blocks and control your authenticity. They also provide independent security management for your funds.
On the flip side, thin desktop wallets do not require you to download blocks. You can easily download think wallets on any portable device.
If you’re the type who always dashes around, you will enjoy this wallet’s main advantage: you can take it anywhere. Your funds are basically always on hand.
It’s a very convenient way to paying for products. You invariably only have to scan QR codes. In some cases, you can simply just tap your phone against a reader without having to enter any information. This is the so-called ‘near-field communication’ feature.
Mobile wallets are not full bitcoin clients, which have to download the entire blockchain. This is quite impractical since the blockchain is constantly growing and requires several gigabytes of storage.
When you’re using a web-based wallet, your private keys are stored online, on a server controlled by someone and that’s connected to the internet.
This lets you easily access your funds from any device anywhere in the world. However, it’s also always at risk of being hacked. It’s may even be possible for the organization running the service to manipulate your bitcoins.
Of course, online wallets implement various security-related actions to lower that risk.
Hardware wallets are portable devices that can hold private keys and help facilitate payments. There are different kinds of hardware wallets, but all of them practically allows you to bring any amount of money in your wallet.
This is arguably the safest options for storing bitcoin safely. A paper wallet is basically two QR codes generated using designated device. One of them is a public key. This is the address that you will use to receive bitcoins. The other one is a private key. This is the address you willto spend the bitcoins stored at that address.
Where to buy
After you got the wallet, you need to buy some bitcoins to put in it. While buying and holding bitcoins isn’t as easy as it sounds, there are multiple venues where you can buy you very own bitcoins:
- Bitcoin ATMs
- Gift cards
- Bitcoin exchanges
- Peer-to-peer transactions
- An investment trust