The recent market movement has seen Bitcoin’s value hit some of the historical highs of up to $63,000. These increases have seen several take up Bitcoin like never before. Well, buying Bitcoin is one thing, keeping them safe is another. You need proper crypto knowledge and safety best practices for secure Bitcoin storage.
If you are looking for the best way to store Bitcoin, this guide is for you. It answers all your concerns on how Bitcoins are stored.
What is a Bitcoin wallet?
A cryptocurrency is a software program for storing private and public keys, send, receive and hold digital cryptocurrencies, and connect with other blockchains. It operates more like an internet banking service as it safeguards your digital assets and manages transactions.
The wallet provides a code you use to access your assets. The code acts as the private, which you use when accessing the account. Anyone with access to the code can operate your account. There is also no provision for reset, hence when you lose the code you might as well forget about the Bitcoin. You, therefore, must protect the private key against accidental loss and unauthorised access, or back it up.
Types of Bitcoin wallets
If you are looking to get a Bitcoin wallet, you need to understand the available ones before settling on the best option. There are various Bitcoin wallets such as;
Hot wallets are the Bitcoin wallets that run on internet-connected devices like phones, computers, and tablets. They are ideal for ease of access as long as you have an internet connection. On the other hand, they are less secure. Electronic devices are prone to the threat of hacking.
The Bitcoin online wallet access is ideal for holding small amounts of tokens. Most probably the amount you intend to use regularly.
A cold wallet does not operate through internet-connected devices. Instead, it is all about offline Bitcoin storage. The lack of an internet connection makes it a safer storage option due to less risk of compromise.
The cold wallet allows you to receive funds at any time, while no one can transfer any out except yourself. It provides for various password protection like on USB, paper, or memorising one’s password. The only concern though might be on the cumbersome payment procedure.
These two main Bitcoin wallet types also come in various forms, such as;
- Paper wallets – it is where you have your private and public keys on a physical copy or paper print. With paper, it takes a small space to secure your Bitcoin. It is however prone to get damaged, lost, or smudged.
- Desktop wallets – these are software programs installed on computers or laptops. For better security, you have to secure the accessing machine.
- Mobile wallets – they are software that operates like desktop wallets. However, they are smaller and are used in mobile devices.
- Web wallets – they don’t need you to install anything. They come as part of the browser plugins, or Bitcoin exchange offered.