Why You Need a Bitcoin Wallet?
2020 there was definitely the year when many people discovered the advantages of investing in BTC and other cryptocurrencies. Not only the price of Bitcoin continued its upward trend in 2020, but it achieved a record-breaking price of $29,376.46 in January.
Future predictions are also optimistic, and many experts believe that they will keep growing and reach $250,000 in 2025. So, if you also want to invest in BTC, you need to find a safe Bitcoin wallet. In this article, we explain why you need a Bitcoin wallet and what the advantages of different types of Bitcoin wallets are.
What is the Purpose of a Bitcoin Wallet?
Simply put, a Bitcoin wallet allows you to store and access your assets securely. But, some of the most important components of a Bitcoin wallet is that it has a private key, which is a unique number associated with the specific Bitcoin address of your wallet. It should be noted that the Bitcoin address does not in any way share the personal information of the owner of the wallet.
This is why cryptocurrencies are appealing to many users. Besides, each wallet has a public key that adds another layer of security, and it is used for receiving funds, while the private key is used to sign the outgoing transactions. Essentially, whether you‘re a miner or you’re trading online, you need a Bitcoin wallet to make transactions.
Types of Wallets
Luckily, nowadays, you can choose from different types of wallets. The main four types of wallets are desktop, hardware, mobile, and web wallets. Web wallets are great for trading online, and you will find a lot of trading platforms that offer this type of wallet. They are very convenient, and you can seamlessly access the wallet and trade from your account on any device.
But, the flip side is that the private keys are stored on a cloud server that isn’t under your control. So, when you’re making your decision, make sure to choose your wallet wisely because using a safe Bitcoin web wallet is as important as it is trading on a trustworthy platform.
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Mobile Bitcoin Wallet
The mobile wallets are very similar to mobile banking apps because you need to download the application on your mobile device. Most of them are compatible with both iOS and Android devices. The main advantage is that you can make purchases in brick-and-mortar stores using the QR code of your wallet.
Of course, you can also make online transactions and trade online. So, if you’re planning to sell and buy BTC on the move or make offline purchases, this is an excellent option for you. On the other hand, the risk of losing your mobile device will also mean you will lose your wallet, and also mobile malware is a growing threat to mobile devices.
A desktop wallet is perceived as a safer option than a mobile wallet and a web wallet. You have total control over your private and public key, as the software is installed on your desktop computer. It isn’t as convenient as the mobile or web wallet because you can only access your account on the computer, but it is a quite safe option. Still, you need to create a strong password for your wallet and protect your computer from viruses.
Lastly, the hardware wallet today is recognized as the safest way to store your BTC. The hardware wallet is a special type of device like a USB flash drive that can be plugged into your computer. Hence, it is less vulnerable to attacks from hackers or malware. In fact, it’s recommended if you have any other wallet to back up your assets with cold storage options. The main disadvantage is that hardware wallets are expensive in comparison to the other types of wallets.
Before you start trading or getting involved in the world of crypto, you need to find the best Bitcoin wallet that suits your needs. As with any financial investment, it’s prudent to take your time, compare different providers, and do your research before you pick your wallet. Naturally, you can use multiple wallets if you don’t want to store all of your BTC on one type of wallet.