What are Bitcoin wallets

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2016-05-27 00:00:00:


Our world is constantly changing at a kaleidoscopic speed. Computers, smartphones, tablets - all this is rapidly breaking into the lives of modern inhabitants of the planet. A couple of decades ago, almost everyone trusted exclusively printed money, a little later, some cardholders preferred to pay through electronic payments, but now one can observe the rise in popularity among users of such a digital currency as Bitcoin.

Naturally, among the owners of virtual coins, the question is especially popular: how and where to store such coveted virtual coins and what kind of Bitcoin wallets exist? 

 

What is Bitcoin Currency?

Bitcoin is a digital currency of a global scale, which was born, exists and continues a victorious attack on traditional fiduciary monetary units in the vastness of the virtual world. Despite the significant differences from paper payment signs, be it the US dollar, the Russian ruble, the euro and the lack of material embodiment, they can be used to pay for services, education, purchases in online stores, and used for different purposes. Moreover, it should be expected that cryptocurrencies, and in particular Bitcoin, will supplant conventional banknotes and even completely replace them. Already now, you can exchange virtual money and simply store it.  

The reasons for the popularity of Bitcoin include its constantly growing rate, the instantaneous transfer of money and the absence of intermediaries in the form of a bank and other financial and credit institutions, the complete absence or minimum rates of commission fees, resistance to inflation and the confidentiality of transactions. In the minds of people more and more often the following question arises: "How to store this wonderful digital currency?" In order for everything to fall into place, you need to get acquainted with the types of Bitcoin wallets. 

 

What are the Bitcoin wallets

Wallets for storing cryptocurrency are a virtual analogue of the usual wallet. A variety of different software for storing and executing transactions using a digital currency can be divided into several main groups. In order not to get lost in the variety and find out what kind of Bitcoin wallets are, you need to understand the standards for their classification. Electronic wallets are thick, thin, online and hardware (hardware) and operate online. It follows from this that the Bitcoin installation software for the users computer has the right to exist, along with online services for the safety of the cryptocurrency.  

In order to become the happy owner of the digital currency Bitcoin, you need to register an electronic wallet. After registration, the user will have access to the main keys: private and public. Moreover, the users Bitcoin network address becomes a public key, and with the help of a private key, it is possible to confirm transfers and payments using digital currency. A private key is a specially formed file, reliably protected by encryption, however, the public key is in the visibility of Internet users.

You need to remember that the private key is generated in a single copy and is the identifier of the Bitcoin wallet. If the key is lost, access to the electronic wallet is permanently closed, and the digital currency of Bitcoins cannot be restored. The loss of a public key does not entail inevitable consequences, since there may be several such keys. However, the Bitcoin system still recommends using one-time public keys.

 

Stationary wallets Bitcoin

After reading this article, the user gradually develops a puzzle of answers to the question of what Bitcoin wallets exist. Next, you need to get acquainted with the types of Bitcoin wallets that work with the installed software on a users computer, laptop, smartphone and tablet. It has been established that a significant plus of such wallets is a security guarantee. When using “thick” bitcoin wallets, user data is stored on a personal computer or laptop. When using "thin" wallets that take up little space in the devices memory, the keys remain with the user, but the files with monetary transactions are stored on a remote server on the Internet. It is convenient to use such purses for holders of smartphones and tablets that have Bitcoin wallets, since the flash memory of these mobile devices is limited.   

 

Online wallet Bitcoin

Cryptocurrency Internet wallets have only a functional similarity to the stationary version. These Bitcoin wallets have the most basic privileges:

  1. No mandatory download of data that takes up a lot of hard disk space.
  2. The ability to manage your Bitcoin wallet from any device that supports access to the global network.
  3. Additional features such as money transfers between system participants, contact books, notifications, and more.

Despite the privileges, the not so effective security mechanism of such a wallet is its main drawback. From now on, the user is not responsible for the security of the data, because it depends on the reliability of the online service. If the service undergoes a hacker attack, then the loss of the accumulated digital cryptocurrency, in the literal sense of the word, will be the result of fraudulent activity. Online wallets are suitable only for those who do not want to use them for a long time or place small amounts on the resource. To avoid possible hacker attacks, Bitcoin exchange must be carried out only on secure trading platforms.

Access to your savings can be obtained directly from the browser installed on any device connected to the global network. Knowing the ways to protect against unauthorized access to the Bitcoin wallet, the interest of users about what Bitcoin wallets exist at this time does not subside. 

 

Iron (hardware) wallets Bitcoin

Iron Bitcoin wallet was originally conceived as a type of Bitcoin wallet to protect users from outside threats. This became his destiny. It is a digital device that connects to a computer using a USB input (like an external hard drive). Regardless of how well the users computer is protected or not at all protected from malware, Bitcoin coins are always protected. None of us is insured against theft or loss, therefore, the PIN-code created specifically for protection in such cases will not allow fraudsters to use the device. And the only user of an iron wallet can easily recover all data using a code of 12-24 words, which is created with the first launch of the device.   

 

Programs for working with Bitcoin wallets

There are many specially created programs designed to work with Bitcoin wallets. What they are and what kind is suitable is up to the user himself. There is no official software on the official website of the cryptocurrency developer, because other developers were involved in its creation. To work with the global digital currency Bitcoin, you need to use one of the listed programs: Bitcoin Core, Bitcoin Armory, MultiBit, Electrum, Bitcoin Wallet (Android), Bitcoin Spinner (Android).