To access your bitcoins, you need a bitcoin wallet. It can be almost anything: from a piece of paper to sophisticated software with many protective functions recorded on a USB flash drive. The main task of a bitcoin wallet is to store a private (secret) key, which is necessary to access the bitcoin address and, accordingly, to your funds. Naturally, it is extremely important to ensure its reliable protection and backup of the data stored in it.
From a technical point of view, the bitcoins themselves are not stored anywhere – only secret digital keys are stored, giving access to public bitcoin addresses and the ability to “sign” transactions. This information is in the bitcoin wallet.
There are many forms of wallets, but all of them can be divided into four main categories: for PCs, mobile, online and hardware bitcoin wallets. Let’s look at how each of these types works.
Bitcoin wallet for PC
Download the official Bitcoin-Qt wallet (torrent over 50 GB)
Download Electrum Easy Wallet (33 Mb)
Download Easy Wallet Multibit (9 Mb)
Download Armory Secure Wallet (21 Mb, works only with Bitcoin-Qt)
Mobile Bitcoin Wallet
Download a mobile wallet for iOS: Blockchain, BitWallet, BreadWallet, Coinbase, Circle, Xapo
Download a mobile wallet for Android: BitcoinWallet, Blockchain, Mycelium, HiveWallet, CoinBase, Xapo
Wallets for PCs are very good, but not very convenient when you are on the street and want to pay for goods in the store. This is where mobile wallets come to the rescue. Working as an application on a smartphone, the wallet stores private keys for your bitcoin addresses and allows you to pay directly from your phone. In some cases, you can even use contactless communication technology (NFC) to pay by simply placing a smartphone on the reader and without entering any data.
Mobile wallets have an important common feature: they are not full-fledged bitcoin clients, that is, they do not need to download the entire block chain, which is constantly growing and has a size of several gigabytes. Otherwise, it would lead to huge mobile traffic, the expense of which your carrier would gladly present. In any case, most phones do not have enough memory to store the entire chain of blocks.
Instead, mobile clients have a simplified payment verification (SPV) system. They download a very small subset of blocks and rely on trusted nodes in the bitcoin network to confirm the correctness of the available data.
Online Bitcoin Wallet
The most popular online wallets: BitGo, Blockchain, GreenAddress, Xapo.
Online bitcoin wallets store your private keys on the network on an Internet-connected computer that someone else controls. Several of these services are available, some of which are associated with mobile and desktop clients and duplicate your addresses between your devices.
One of the advantages of online bitcoin wallets is that the private key stored online can be accessed from any device. This also has a significant drawback: the organization providing such a service, in fact, has access to all secret keys. If the administration of such a resource has malicious intentions, it will easily gain access to the bitcoins of its customers. This is not the most pleasant, especially if you have accumulated a lot of coins.
Hardware Bitcoin Wallet
You can order a Trezor hardware bitcoin wallet here for $ 119.
Such wallets are devices, usually resembling a USB flash drive, equipped with a connector for connecting to a computer (USB) and a chip for storing the secret key in digital form.
How can I secure my wallet
There are several ways to provide more reliable protection for your wallet.
One way to protect your wallet from prying eyes is to encrypt it with a complex password. This will significantly complicate access to your wallet, but will not make it completely inaccessible. You can read the article on how to encrypt information using the popular TrueCrypt program here. True paranoids can create an optical shelter for data. Full manual of three parts: 1, 2, 3.
If you store private keys in only one wallet, if it is lost or damaged, you will lose the keys. By backing up your wallet, you make a copy of the private keys. It is important to make a copy of the entire wallet. Some addresses are used to store changes in transactions and may not be displayed by default. Make several complete copies and store them in various places inaccessible to strangers.
Take Bitcoin wallet offline
If you are too concerned that hackers might take possession of your funds when storing digitally, there is such an option as “cold” storage. Wallets of this type store private keys offline, so they cannot be stolen via the Internet.
It will be correct to “freeze” most of the bitcoins and transfer only the necessary amount to a separate address that has an Internet connection. In this case, even if you lose your smartphone or erase such an address on your computer, you risk only a small number of coins.