Bitcoin is generated and stored on the Bitcoin blockchain. Users transfer ownership of Bitcoin, not Bitcoin. In the Bitcoin blockchain, the ownership changes of Bitcoin are recorded. That is, Bitcoin is stored on the blockchain, but the private keys used to transfer ownership of Bitcoin are stored in software called Bitcoin wallets.
Bitcoin wallets can be classified under five main headings:
- Desktop Software Wallets
- Mobile Wallets
- Hardware Wallets
- Online Wallets
- Paper Wallets
You can choose to use any of these wallets or more than one wallet in accordance with different usage purposes. However, whichever wallet you prefer, you should remember that you are responsible for the security of the wallet you use.
Because your wallet of choice stores private keys that allow you to control your Bitcoin, if you lose your wallet or access to the wallet, you may lose control of your Bitcoin completely. Therefore, before choosing a wallet, you should familiarize yourself with the wallets.
Desktop Software Wallets for Bitcoin
The first Bitcoin wallet to be used to store private keys of Bitcoin addresses and transfer Bitcoin, as well as the first version of Bitcoin mining software, was released on January 9, 2009 by Satoshi Nakamoto. The Bitcoin Core wallet continues to be developed and updated by the Bitcoin core team. By downloading the Bitcoin Core wallet, you can store a copy of the Bitcoin blockchain on your computer and manage your Bitcoin.
If you don’t want to download the entire Bitcoin blockchain to your computer, you can use 3rd party desktop wallets. These wallets act as a bridge between the blockchain and the private keys of the addresses you own, and act as intermediaries to transfer your Bitcoin transfer transactions to the blockchain.
Mobile Wallets for Bitcoin
Mobile wallets are smartphone applications that allow you to transact on the Bitcoin blockchain using your private keys. The entire Bitcoin blockchain is synchronized by the service provider. Mobile wallets mediate users to manage their assets on the Bitcoin blockchain from their smartphones.
Hardware Wallets for Bitcoin
Hardware wallets are portable devices that store private keys for you to transact on the Bitcoin blockchain. Users who want to keep their private keys on a device that is not always connected to the internet can use hardware wallets. You can transfer Bitcoin and other cryptocurrencies by connecting your hardware wallet to your computer or pairing it with your smartphone.
Online Wallets for Bitcoin
Online wallets are internet services that store your private key for you and enable you to transact on the blockchain with almost any device you can access the internet. Online wallets offer additional security features such as email and password login, 2-step verification, SMS verification. However, even if your private keys are encrypted, they are always stored on devices connected to the Internet.
Paper Wallets for Bitcoin
These are the papers that contain the Bitcoin address and the QR code of the private key of this address. Although paper wallets are preferred to transfer Bitcoin offline or to receive payments with Bitcoin, they are not considered a secure method for storing private keys, as they carry risks of burning, wear and tear.