A wallet belongs to the basic equipment of blockchain banking, especially to the digital currency Bitcoin. A Blockchain Wallet – or also Bitcoin Wallet – is a software program in which Bitcoins are stored. There is a private key (a secret number) for each Bitcoin address that is noted in the wallet by the person who owns the account. This key is the only access to a Bitcoin address and therefore the only way to receive or send credit. There are different providers, but they are all compatible with each other. The wallet is also available in different forms, which we will explain in more detail later. The five best known are the desktop, mobile, online, hardware and paper wallets.
In the so-called wallets, the users keep their Bitcoin capability. As with „normal“ money, you should not store all your money in a wallet and make sure that it is safe. In this case with backup copies and secure passwords. You can also use the wallet as an online savings book. This has no Internet access and is therefore not susceptible to hackers. Bitcoins only have a certain value because we assign you a value. But in the end this is similar with „normal“ money. The value of the Bitcoins depends strongly on the exchange rate and this is marked by strong fluctuations.
Different types of Wallets
Desktop wallet
Have you already installed an original Bitcoin client on your desktop? Then you might already be using a wallet without knowing it. This enables you to forward transactions over the network, create Bitcoin addresses to send or receive credit, and store the appropriate keys.
Mobile Wallet
The mobile wallets are installed as an app on the mobile device and deposit the private keys directly on the smartphone. In this way, Bitcoins can be received and sent with the device within seconds.
Online Wallet
Your private key is stored on an online wallet. A server that is externally controlled and managed. This gives you access to your Bitcoins everywhere. The disadvantage, however, is that you can’t be sure that the external providers will secure the online wallet sufficiently.
Hardware Wallet
Hardware Wallets allow private keys to be stored electronically and payments to be made. However, they are still quite limited.
Paper Wallet
These paper wallets can be stored 100% offline and are therefore safe from cyber attacks. They are also a fairly inexpensive and secure method. The providers create a Bitcoin address for the users and print two QR codes on paper: One code with a public address to receive the Bitcoins and a second QR code with the private key for storing and sending Bitcoins. It is also the most commonly used type of wallet.