The blockchain technology used for the Bitcoin network is very secure. But some Bitcoin wallets are not so secure. You need a wallet to store your Bitcoins in and to make transactions. There is no need for you to confine yourself to one type of wallet. In fact, I strongly recommend that you have more than one. Learn more about the lowdown on Bitcoin wallets in my article and get all the tips.
If a thief or a hacker accesses your Bitcoin wallet then they can transfer all of your currency into their accounts. And remember that blockchain creates immutable records that you can’t change so there is no chance of you getting your Bitcoins back if this happens. So let’s take a look at the different types of wallets.
The lowdown on Bitcoin wallets: essential knowledge
If you want to make a profit with cryptocurrencies you can and you will be satisfied, but you need to learn the basic rules and terms to avoid risks and mistakes.
If you use a cryptocurrency exchange to buy and sell Bitcoins as most people do they will provide you with an online wallet to store your Bitcoins in. These are very convenient as all you need to do is to connect to the Internet and you can use your online wallet to perform transactions. A mobile wallet is an online wallet for mobile devices.
Online wallets are “hot wallets” which means you can call them into action immediately for your Bitcoin transactions. You can access your online wallet with an Internet connection from anywhere in the world. The problem is so can thieves and hackers.
The other issue with online wallets provided by cryptocurrency exchanges is that the exchange can block your access to your wallet if you have your account suspended for some reason. If they close your account for good then you will lose everything.
A desktop wallet is a software application that you download to your laptop or desktop. It is a medium-security wallet. If you disconnect your computer from the Internet then there is no way that a hacker can access your desktop wallet. But as soon as you connect again you are somewhat vulnerable.
It is a lot more difficult for a hacker to access your desktop wallet than it is an online wallet. But it is possible. If your computer becomes inoperable and you haven’t made a backup copy of your desktop wallet then you will lose everything.
In this scenario, your Bitcoin wallet is a piece of paper with all of your private key information on it. You might think that the idea of using pieces of paper to store your Bitcoin information doesn’t really match up with modern technology but actually, it is a very safe way to store your Bitcoins.
There are no recorded cases of cybercriminals hacking pieces of paper and nor are there likely to be. The biggest issue with paper wallets is where to keep the paper so that nobody else can find it. If you have a lot of Bitcoins then consider a safety deposit box.
A hardware wallet is the most expensive option and is usually a USB stick that you can carry around with you wherever you go. These are the most secure Bitcoin wallets out there and if you are going to be a serious investor then I highly recommend that you get one.
All you need to do is to plug the hardware wallet into your computer when you want to make a Bitcoin transaction. When you complete the transaction remove the hardware wallet and keep it in a safe place.
Is that hard to understand and to learn? No, it isn’t, believe me. I invested my money in cryptocurrencies and I am making a good profit. It’s just a matter of patience at the beginning. There are a lot of ways to get the basics, learning by practicing is surely the best one. Start with free ones and then choose the right support to go deep into the trading. Buy and sell at the proper moment will make your capital bigger. Try it.
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