What is a Bitcoin wallet?
Bitcoins are stored in digital wallets. There are numerous wallets out there, they differ in features and design.
Before you proceed to choosing a wallet for your bitcoins, please make sure you get the following terminology right.
A Bitcoin address and a Bitcoin wallet
Once initially created through the process called “mining”, all bitcoins are attached to the so-called Bitcoin addresses (also known as Bitcoin public keys).
Any Bitcoin address looks like this - 1BoatSLRHtKNngkdXEeobR76b53LETtpyT. If you make a Bitcoin payment, it means that you transfer bitcoins from one Bitcoin address to another one.
A Bitcoin wallet is essentially the Bitcoin equivalent of a bank account. If necessary, you can create an unlimited number of Bitcoin addresses and your wallet can store all of them for you. Bitcoins can be sent from, received and stored in Bitcoin addresses.
In a sense, think of a Bitcoin wallet as a key ring to all your Bitcoin addresses.
In addition to that, some of the Bitcoin wallet providers offer options to buy and sell bitcoins directly with them.
There are several main types of wallets.
- Desktop wallets are the ones that you install directly on your own computer.
- Web wallets are hosted by a trusted third-party and can be accessed via browser.
- Mobile wallets can be used on iOS and Android mobile devices.
- Hardware wallets are a special type of bitcoin wallets that stores user's private keys on a secure hardware device.