To trade with any Kind of currency comes with a few underlying responsibility. It is necessary to have a place to safely store your funds. Bitcoin need to be stored, but because bitcoin is a digital currency, it is held in a secure electronic location called software wallet.
Technically, bitcoin is not store in a wallet, it is stored in a blockchain. Wallet contains a private key or seed, which is used to validate transactions and “sign” them so that your bitcoin can be use to make purchases or exchanged for another asset. A wallet keeps secret information called private key for security.
What is a bitcoin software wallet?
A bitcoin software wallet is a software application that you used to store your bitcoin and it comes in many different types, web, mobile, and desktop wallet. Bitcoin wallet is not a physical item but a software program for holding and trading bitcoins. The software wallet can be downloaded. Each with it own unique characteristics. It is advisable never to give out your private Key, to trade in bitcoins, you need a digital wallet.
You can also read: What Is Hardware Crypto Wallet?
Types of bitcoin software wallets
A bitcoin software wallet is like a digital bank account for your cryptocurrencies. When you use a wallet, you are able to send, receive and manage your funds. Here are the types of bitcoin software wallet.
A web wallet( also know as online wallet) is a bitcoin wallet that exists online only. Web wallets are managed by third parties, they hold the private key and public key of the user. Although some types of web wallets provide ways for you to remain in control of your private keys. Coinbase and Blockchain are popular web wallet providers.
Web wallet are more suitable because it facilitate access to Bitcoins from anywhere, on any browser or mobile device. The selection of your web wallet must be done carefully since it stores your private keys online. The downside of web-based wallet is that you have to give custodian to the wallet provider to keep your private key secure.
When using cryptocurrency exchanges, you should consider making use of the protection tools available. The Binance Exchange offers several security features, such as device management, multi-factor authentication, anti-phishing code, and withdrawal address management.
Mobile software wallet
Mobile wallets perform the same functions as a desktop wallet. A mobile wallet is an app on your smartphone that you can use to manage your coins. It’s runs as an app on your smartphone, storing the private keys and allowing you to pay for things, trade and store crypto with the phone.
Mobile wallet are the least secure form of Bitcoin wallets. Trust wallet, Abra, Mycelium, Jaxx liberty, Math wallet, and Safepal are examples of mobile wallet.
There is powerful malware posing as Bitcoin wallets to steal your fund, so it is advisable to research. When you see a wallet that you like, before deciding which one to use, make sure to check them out on Google and read a couple of reviews.
Desktop software wallet
Desktop wallet is a software wallet you download to a specific computer or laptop and they can only be accessed from that particular device.
The wallet give you full control over your keys and funds and you can unplug the wallet from the internet, do some offline transactions and bring it back online.
Desktop wallet offer one of the highest level of security, but if the computer get virus or hackers hacked your device and were able to remotely get hold of your device, they could gain access to your fund and you may loss all your fund, so make sure your computer or laptop is completely clean of viruses and malware before setting up and using a desktop wallet.