Confused about the Bitcoin Wallet?
If you want to use Bitcoin then you need a Bitcoin wallet. This wallet is nothing more than a collection of private keys and how you manage those keys in order to make Bitcoin transactions. Confused? More simply put a Bitcoin wallet comes in different forms, designed for different types of devices. Remember, Bitcoins are the modern equivalent of cash. Bitcoin wallets are about safe and secure storage of your Bitcoins. Think of your Bitcoin wallet like the wallet you use for standard currency, except the Bitcoin wallet is digital.
Keep in mind that Bitcoins are not something that you technically store anywhere because they are digital currency so you cannot hold one in your hand. What you store are the secure digital keys used to access your public Bitcoin addresses and sign transactions. This information is stored in a Bitcoin wallet. As mentioned above, there are a variety of wallets available.
The types of Bitcoin wallets include desktop, mobile, web, paper and hardware. OK, so if you prefer desktop wallets because that is what you are most familiar with then the wallet allows you to relay transactions on the network and you create a Bitcoin address for sending and receiving the virtual currency, and to store the private key for it.
Mobile wallets are very useful if you are out and about and want to make a purchase. This is where a mobile wallet comes in handy. Running as an app on your smartphone, the wallet can store the private keys for your Bitcoin addresses, and enable you to pay for things directly with your phone. Advanced apps used on a Smartphone can enable you to tap the phone against a reader and pay with Bitcoins without having to enter any information at all.
Web-based wallets store your private keys online, on a computer controlled by someone else and connected to the Internet. There are a number of these types available and some of them link to mobile and desktop wallets. This can be advantageous because you can access them from anywhere. Hardware wallets are quite rare. These are dedicated devices that can hold private keys electronically and assist in making payments.
Finally, there are paper wallets and they are the least costly of all methods. There are several sites offering paper Bitcoin wallet services. They will produce a Bitcoin address for you and create an image containing two QR codes: one is the public address that you can use to receive Bitcoins; the other is the private key, which you can use to spend Bitcoins stored at that address.
If Bitcoin wallets are managed properly, they are very safe. The private keys stored in your wallet are the only way to access the transaction data stored in a Bitcoin address. If you lose them, you lose your Bitcoins. So, as long as you don't let anyone else have access to your private keys and you don't lose them, you are quite safe working with Bitcoin.