“How many types of Bitcoin wallets are there?” This is a question I asked myself last night when I was eating suya. I took some time and did my research and was very amazed by the different types of Bitcoin wallets we have. Please, stop thinking about the suya because in this writeup, I will be sharing with you the information I got about the types of bitcoin wallets we have. Let me take you on a ride!
Bitcoin is a digital currency that has been around since 2009. In simple terms, being digital means it cannot be seen or touched because it is not a physical currency but online. Since its inception, Bitcoin has grown in popularity all over the world. I like to describe BTC as the Baba of cryptocurrency. And as a result, there are now many types of Bitcoin wallets available. In this article, I will discuss the different types of Bitcoin wallets and their features, but before that, what is a bitcoin wallet?
What is a Bitcoin Wallet?
A Bitcoin wallet is a software program that stores your private keys. Now let’s build an imagery to set the pace. I would like to describe a Bitcoin wallet as safe. Remember that safes have locks, and to have access to these safes, you need the keys to lock and unlock them, in order to store money or valuables. This is just the same as Bitcoin wallets. As I mentioned, bitcoin is not a physical currency, it’s digitalised. And to store your digital currency which is Bitcoin, you need a wallet. This wallet can be symbolised as the safe and the private keys are the safe lock keys. These private keys are used to access your Bitcoin addresses and send or receive Bitcoin. When you receive Bitcoin, it is sent to your Bitcoin address, which is stored in your wallet.
Still confused? Let me paint a broader scenario.
In Nigeria for instance, we use a traditional currency, Naira. Naira is physical, you can touch and see it. To save your Naira, you need a Naira bank account number and bank name. To have access to your bank account, you need your pin for transactions that only you yourself know. This is applicable to Bitcoin. Where Bitcoin is the digital currency as of Naira. There are other currencies like Ethereum, just like other fiat currencies like Ghana Cedis.
The name of the bank here can be interpreted as the name of the crypto trading platform you are using. For Naira, there are several Naira banks like Kuda, UBA, and First bank. So for Bitcoin, there are Bitcoin wallets (banks) like Breet.
And then, the bitcoin wallet address is the bank account number you will send to people to receive Bitcoin. Got it! It’s that simple.
Four Types of Bitcoin Wallets
There are several types of Bitcoin wallets like Mobile wallets and Hardware wallets, each with its own unique features. Here are the most common types of Bitcoin wallets:
1. Desktop Wallet
A desktop wallet is a type of wallet that is installed on your computer. It provides a high level of security as your private keys are stored locally on your computer. This type of Bitcoin wallet can only be used on desktop computers or laptops. They are not compatible with mobile phones.
However, this type of wallet can be vulnerable to malware and other security threats. One popular desktop wallet is Electrum, a lightweight wallet that is easy to use and provides advanced security features. Another is Bitcoin Core, the official Bitcoin wallet that provides a full node implementation of the Bitcoin network.
2. Mobile Wallet
A mobile wallet is an app that is installed on your smartphone. This is the type of crypto trading app you can download on your Android or iPhone devices through Google Play Store or App store respectively. It is a convenient and easy way to access your Bitcoin on the go. However, mobile wallets are not as secure as desktop wallets as they are more vulnerable to hacking and malware, this is because your phones are vulnerable. But if you use a well-secured app like Breet that utilises several methods to keep users’ accounts safe, then you are good to go. No worries!
A good and popular mobile wallet is Breet, a popular mobile wallet that also allows you to sell Bitcoin in Ghana and Nigeria. If you’re looking at exploring mobile wallets, check out my previous article on the top 8 best cryptocurrency wallets in Nigeria.
3. Hardware Wallet
A hardware wallet is a physical device that stores your private keys. It provides the highest level of security as your private keys are stored offline, making it immune to hacking and malware. And this is because it is offline like a USB that can only be held by the owner. However, hardware wallets can be expensive and may not be as convenient as other types of wallets.
Two popular hardware wallets include are
Trezor: A popular hardware wallet that provides advanced security features and a user-friendly interface.
Ledger: A hardware wallet that supports multiple cryptocurrencies and provides advanced security features such as two-factor authentication.
4. Paper Wallet
A paper wallet is a type of cold storage that involves printing out your private keys and storing them offline. It is a secure way to store your Bitcoin as it is not vulnerable to hacking or malware. However, paper wallets can be easily lost or damaged. I believe this one is more explanatory. Paper can be destroyed easily by water, tear, or even fire. So it’s risky to use a paper wallet.
How to Choose a Bitcoin Wallet
Scam is not something you should joke about. Remember that the crypto industry is still young compared to the financial sector. So security is something the cryptocurrency community is trying to work on more. When choosing a Bitcoin wallet, it is important to consider your needs and preferences. If you value convenience and accessibility, a mobile wallet may be the best option for you. If you prioritise security, a hardware wallet may be the best option.
Additionally, it is important to research and compare different wallets to ensure that they meet your security requirements and are easy to use. Check out my colleagues’ article on how to choose the right Bitcoin wallet for you.
Conclusion: Types of Bitcoin Wallets
Bitcoin wallets are essential for storing and accessing your Bitcoin. I believe my research provided information has given you an insightful knowledge of what types of Bitcoin wallets there are. For me, I prefer Mobile wallets overall because it gives me all in one. I go everywhere with my phone, so accessing my Bitcoin is convenient. Also, with my Breet two-factor authorization, no one can access my Bitcoin wallet even if I lost my phone. And I can even use my fingerprint to access it. Omo! Breet is sweet o!
I guess I should eat suya more so I can always have these thoughtful questions!