Just like digital e-wallets that are available online, you will find cryptocurrency Bitcoin wallets as well. Bitcoin wallets are of different kinds with different functionalities and characteristics. Bitcoin investment and trading transactions are different from the other stock market trading transactions; hence it is highly important for one to choose their Bitcoin wallet wisely. There are a number of security measures that one needs to know and understand before buying Bitcoin wallets online.
There are a number of Bitcoin wallets that come in different types with different characteristics and features. The different types of Bitcoin wallets include:
In addition to the above classification of Bitcoin wallets, you will also find Bitcoin wallets that are classified based on the connectivity namely,
These Bitcoin wallets are often referred to as hot Bitcoin wallets and cold Bitcoin wallets. Let us look into detail about the offline Bitcoin wallets and online Bitcoin wallets.
Often referred to as the ‘Hot Bitcoin Wallets’, these Bitcoin wallets are often connected to the internet 24/7 and hence are called as online Bitcoin wallets. These online Bitcoin wallets are operational all the time round the clock and hence they are very much like the wallet the one carries in his or her pocket. Hence you are free to execute Bitcoin sending and receiving transactions from your online Bitcoin wallet anytime, anywhere.
In addition to the advantage of 24/7 transaction access to Bitcoins, there are security issues associated with the online Bitcoin wallet. Bitcoin transactions are often prone to security issues. As the online Bitcoin wallet is all the time connected to the internet, it is highly vulnerable to security issues and threats. Hence one has to adhere to caution while using online Bitcoin wallets.
Online Bitcoin wallets are hot wallets and so on the other hand offline Bitcoin wallets are popularly known as cold Bitcoin wallets. Unlike hot / online Bitcoin wallets, the offline (cold wallets) Bitcoin wallets are those that are not connected to the internet and are offline. These cold Bitcoin wallets are stored in hard disks, pen drives, and any other form of USB storage or on paper. As the name suggests, offline Bitcoin wallets can be accessed even without internet connectivity. These cold Bitcoin wallets are not always connected to the internet and hence are less vulnerable to security issues. But these offline Bitcoin wallets are vulnerable to loss and theft. The public address and the private key once lost cannot be recovered.
Hence both the online Bitcoin wallets as well as offline Bitcoin wallets are prone to security issues, hence one should wisely choose the type of Bitcoin wallet that best suits his or her own needs and requirements.