First of all, before buying Bitcoin, you need a place to store it. In the world of cryptocurrencies, that place is called a ‘wallet,’ and they come in a variety of forms. Different kinds of wallets provide Bitcoin owners with different kind of security, storage and access options.
It is important to mention, however, that your wallet doesn’t technically store your Bitcoins. Instead, it holds private keys, essential for accessing a Bitcoin address and being able to spend the funds. Those digital keys are required to sign a transaction, and if the user loses them, they essentially lose access to their Bitcoins.
The five main types of BTC wallets are desktop, mobile, online, hardware and paper Bitcoin Evolution.
A desktop wallet is installed on the user’s computer, providing complete control of the funds and relative budget safety. There are thick desktop wallets, which allow users to download network blocks and control their authenticity, as well as provide independent security management of their funds. On the other hand, thin wallets don’t require users to download blocks and can be easily downloaded to a portable device.
The main advantage of a mobile wallet is that the user’s funds are always on hand. It is a very convenient way of paying for goods by scanning QR-codes. In some cases, users can take advantage of their smartphone’s near-field communication feature, which allows them to just simply tap their phone against a reader and not enter any information at all. One common feature of all mobile wallets is that they are not full Bitcoin clients. This is because a full Bitcoin client has to download the entire Blockchain, which is constantly growing and requires several gigabytes of storage.
If using a web-based wallet, users’ private keys are stored online, on a server controlled by someone else and connected to the Internet. While it allows people to easily access their funds from any device anywhere in the world, there is always a risk of the server being hacked or even the organization running the service taking control of your Bitcoins. That risk, however, can be significantly reduced by implementing a variety of security measures.