Bitcoin is one of the most popular and widely known cryptocurrency. In simple terms, a Bitcoin is a digital equivalent of cash. Trading in Bitcoins requires a Bitcoin wallet that facilitates the sending and receiving of Bitcoins.
A simple understanding of Bitcoin wallet – Bitcoin wallet is basically a software program that is used to store Bitcoins. Bitcoins are stored in the form of a private key, which is nothing but a secret number that addresses each Bitcoin that is saved in the Bitcoin wallet. Hence it is necessary for one to have a Bitcoin wallet in order to execute trade transactions in Bitcoins.
Below are some key points that will help you know Bitcoin wallets better.
In the common world, the most handy and used means to carry cash is wallets. Both men and women carry wallets in different forms, shape, size and color based on their preference to carry cash. In the digital world too, there are e-wallets that hold the money associated with the user’s accounts. Basically in common language wallets are the most used and preferred choice to hold and carry cash and money in physical as well as digital form. Similarly in the world of cryptocurrencies, we need wallets to hold the cryptocurrencies. Cryptocurrencies exist in various forms, among the many; Bitcoin is the most common and popularly recognized cryptocurrency. Hence a wallet for holding the cryptocurrency Bitcoin is known as a Bitcoin wallet.
To understand the concept and working of a Bitcoin wallet, let us take the basic example of an Email account. The working and concept of the Bitcoin wallet is very similar that of an email account.
Similar to the email address and password concept, Bitcoin wallets too receive Bitcoins and send or spend the Bitcoins. The Bitcoin trading transaction happens over the Bitcoin network. Similar to the concept of email address, the Bitcoin too has a public address that allows the user to receive Bitcoins via the public address, and similar to the password concept for logging into the email account, a private address (secret key) allows the user to send or spend the Bitcoins from the Bitcoin wallet.
Bitcoin Wallet = Bitcoin Address + Private Key
Bitcoin address – allows to receive Bitcoins in the Bitcoin wallet,
Private Key – Used to spend or send Bitcoins from the Bitcoin wallet.
Hence the Bitcoin wallet is a place where the user will have the Bitcoin address (public address) and the private key (secret key).
There are many different types of Bitcoin wallets available with different characteristics and functionalities, but the basic functionality remains to be the same across different types of Bitcoin wallets, which is to store the public and private keys.