A Bitcoin wallet or mobile wallet can be described as a an application or device that is used to store bitcoin or cyptocurrencies in what is known as “public wallet address”, accessible by password or a “private key” by its owner. A wallet is used to access the spending or receiving of Bitcoin or cryptocurrency.
Since the advent of cryptocurrencies, there are different types of wallets, some of which are mobile wallets, third-party software wallets, desktop wallets, and hardware wallets. Some of these wallet types combine the function of exchanges. It is imperative to mention that your password, or in the crypto world known as your “private key”, should be kept safe because access to your Wallet is only possible with this.
A simple example is E-mail. Your email address is like your wallets “public key” and can be given to anyone. This is where they will send you bitcoin or cryptocurrency. Now, for you to access your email in this example, you need your password. If you lose your password, usually you could go through a few security questions like on Gmail or Yahoo mail, but in the case of your Wallets’ Private key (password), if you lose it, it can be difficult to access your Bitcoin or Cryptocurrency. This depends on whether the wallet is an online web or mobile application, or if its an offline hardware device, which will be explained in the following paragraphs. It’s very important to never lose your private key.
There are 2 main categories of wallet environments, a “Hot” wallet, or a “Cold Storage” wallet. “Hot” refers to anything online, which includes: Online wallets, Desktop wallets, and Mobile Wallets, these type of wallets require an internet connection and are considered less secure, remote possibilities of hacking or malware can put hot wallets at risk, but generally with 2 step authentication and various security measures these days, they mostly are safe- but the risk exists. These hot wallets are necessary for everyday type transactions, just like a checking account at a bank- you need funds in your checking account to pay bills, etc… Now, for extreme security, a COLD wallet is the best option- this is in the form of hardware that you hold in your hand, put in your closet, and it is NOT actively connected to the internet, its an offline storage, similar to having a safe in your home and storing your jewelry in the safe. This is a good place to keep large amounts of bitcoin or cryptocurrency.
The two types of hot wallets are ONLINE wallets, and SOFTWARE wallets. Online wallets basically are everywhere on the web, and they usually are opened up automatically for you when you open an account at an exchange, such as Coinbase or Binance. If you buy and sell cryptos, if you make purchases at online stores that accept bitcoin, these are useful wallets. But the least secure, very hackable, so not the place to keep substantial sums of bitcoin or crypto. Another drawback of this type of wallet is the fact that your private keys are accessible to the company. In case the company’s security is compromised, there is every tendency for your funds to be stolen. A typical scenario is the Mount Gox case. In the United States, Circle and Coinbase leverage on this type of wallet to provide their clients with the opportunity to transfer Bitcoin with the aid of debit cards.
A SOFTWARE wallet, mobile wallet, this is a more flexible type hot wallet that is normally installed on mobile phones. It’s more secure because you have all the control of your crypto and bitcoin and password/private keys, not a random third party or website or exchange. However, once again this is connected to the internet, and a mobile phone or your computer can get malware and your wallet can get hacked, so its important to avoid and risky online activity that can compromise your phone or computer. To be safe, if really want high security, just get a dedicated mobile phone for your wallet, a phone that you do NOT use to surf the web and watch videos etc…
A quick wallet search at the iPhone APP store or your Androids Google Play will yield lots of results and reviews
TIP ON SECURING YOUR BITCOIN WALLET
Just like the physical wallet that you use to keep your money safe. There is every need to also secure your Bitcoin wallet from the prying eyes of fraudsters and cybercriminals. Although Bitcoin has its own security feature, however; you should take it as a point of duty to adopt a practice that won’t expose your Bitcoin wallet to criminals. The following are some tips to help you keep your wallet safe.
-Be careful with internet services
-Ensure to back up your wallet
-Encrypt your Bitcoin wallet: Set up a strong password that you won’t forget
-Maintain an offline wallet for savings
-Ensure to always keep your software up to date
-Maintain multi-signature access to protect your wallet.