In practice, a bitcoin wallet or bitcoin wallet is a software used to store, send and receive bitcoin. Most people already have a physical wallet where they store banknotes or coins, and a bitcoin wallet or a cryptocurrency wallet, in general, has the same basic functions.
Instead of storing physical money, a bitcoin wallet stores the key you sign when you make a transaction and gives you an interface that allows you to access cryptocurrencies.
Modern wallets are made so that they abstract the whole process and are so easy to use that anyone who can read can use them.
In the image above, we have the interface of the Munn Wallet . Here we have two buttons: "Receive" - on this option we press if we want to receive Bitcoin from someone. Once we press this button, an address we can share will be generated to receive bitcoin. The next option, "Send", we use it when we want to send Bitcoin to someone.
For example, if Mihai has to send Flavia the sum of 0.05 BTC, Flavia will press "Receive", and the address generated will be sent to Mihai, who will press "Send", will enter the address received from Flavia and write the amount of 0.05 BTC.
What is Bitcoin Wallet? Essential information:
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A bitcoin wallet is a software that helps you to store, send and receive bitcoin.
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A wallet stores the key to which you sign the transactions. Anyone holds this key can use the currencies associated with the wallet.
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There are several types of wallets, each having different characteristics.
The first bitcoin wallet was that of Satoshi Nakamoto, who created the cryptocurrency Bitcoin. The second bitcoin wallet belonged to Hal Finney, who communicated with Nakamoto and was the second man to raise a Bitcoin knot. The first transaction between two bitcoin wallets happened between the two, when Nakamoto sent 10 bitcoin to Finney.
Warning!
Do not give anyone your private keys or seed words of your wallet. Please take great care of your confidential data.
How does a bitcoin wallet work?
Cryptocurrency wallets are software applications on computer or mobile devices such as phones or tablets. They use the Internet connection to have access to cryptocurrency blockchain they use.
If Mihai sends 0.05 BTC to Flavia, Mihai's Wallet will connect to the Bitcoin blockchain and send the transaction to the Bitcoin network.
Bitcoin transaction between two users
To send bitcoin or receive bitcoin, we use these applications called Bitcoin or Bitcoin wallet wallets. Above is represented the process to be performed to send Bitcoin. After you have traveled the text so far you probably know what a Wallet is. Continue the article to find out what types of wallets are.
Types of wallets
There are two large categories of wallets: custodial and non-customs. Custial wallets, also called online wallets, are hosted on the servers of the digital wallet supplier (most often a cryptocurrency exchange). Non-customs are wallets in which you take responsibility to secure your keys. This type of wallet is most commonly encountered on mobile devices (Munn Wallet, Mycelium)
Wallets or cryptocurrency wallets can be
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Hot Wallet (Internet connected wallet)
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Cold Wallet (wallet that is not connected to the Internet)
These wallets have the role of storing the private key with which you sign the transactions associated with your account. You can store private keys on a software app, on a hardware (most commonly found on a stick) or on a sheet of paper.
If you want to install a Wallet on the phone and you don't know how to do, we recommend reading our article " How to make a bitcoin wallet? ".
Wallets software
Wallets software refers to computer installed wallets or mobile devices. These wallets are useful because they have an interface that you can access anytime, you can do transactions, you can see your balance on the wallet and many more.
Wallets software are also divided into two main categories: Hot Wallets and Cold Wallets.
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Hot Wallets are permanently connected to the Internet, which makes them very convenient for fast, but more vulnerable transactions to cyber attacks. Examples include mobile or desktop wallets such as Exodus, Trust Wallet and Atomic Wallet. These allow you quick access to funds, but you have to pay attention to the security of the device you install.
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Cold Wallets , on the other hand, are considered much safer because they are disconnected from the Internet when you do not use them. The most popular shapes are Wallets hardware, such as Ledger or Trezor, which stores private keys on a physical device. This minimizes the risk of malware or hacking attacks. There is also Paper Wallets, which stores private keys on paper. These are very safe from the point of view of digital security, but vulnerable to physical damage or loss.
Hardware Wallets
Wallets hardware are considered one of the safest options for cryptocurrency storage. These are usually small physical devices that store offline private keys. For example, Ledger Nano S and Trector One are extremely used hardware due to their increased security. They work disconnected from the Internet and only when you make a transaction you are temporarily connecting to your computer or smartphone.
Paper Wallets
Paper Wallets are simply pieces of paper on which your private and public keys are written. They are 100% offline, so the risk of being hated is eliminated. However, the physical security of the paper wallet is critical - you must avoid damage or loss.
Other items that could help you
If you want to know more about bitcoin wallets, you can also read the articles posted on the website https://learnmeaBitcoin.com/ . Here you will find a lot of precious information. The author of the website, Gregory Walker, is extremely known in the Bitcoin community, and the mentioned website is highly appreciated for how complex concepts in an easy to understand way.
Another website that provides valuable bitcoin information is https://blog.btc.com/ , where you can find both technical and news in the Bitcoin community.
In the situation where you did a Bitcoin transaction and you do not know at what stage, we invite you to use a blockchain explorer. On this explorer you can look for the address you carried out the transaction and you can check if the transaction has been confirmed. Our recommendation is https://blockchair.com/
