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Understanding What a Bitcoin Wallet Is

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Bitcoins Wallet On Smart phone In order to buy, sell, earn or pay with Bitcoin, a Bitcoin wallet is needed. These are not physical wallets like the type that go in a pocket or purse. These are different kinds of virtual wallets.

There are three main kinds of virtual wallets that people can use to store their electronic currency inside:

Web wallets – These are third-party services that will store the electronic coins on their own servers.

Digital wallets – This is software that gets download on a computer in order to store the digital currency.

Phone wallets – There are also phone applications that can be used to store digital currency, and these may be handy because phones tend to travel with owners.

There are pros and cons to any of the choices.

 

The first considerations should be security and reliability, and in this respect, all choices have concerns.

 

Any wallet is only as good as its security. While many people believe that third-party services can afford to provide the best security, there have also been some pretty big cases about these services getting hacked. Some people lost quite a bit of money that way, and this news really made these digital coins less popular than they might have been.

 

Digital wallets get downloaded to the Bitcoin owner’s own computer. As a precaution, these have to be backed up very frequently in case the device crashes. If it does and the data gets lost, there is no way to get money back. Most owners back their wallets up to a flash drive or even two flash drives and they keep these stored in a safe place.

 

Of course, personal computers can get hacked just like servers can so that is a big concern when people decide to download a digital wallet.

 

Phone apps are very handy. But again, phones can fail and get hacked. It is important to find an app that comes with very good security and it is also important to back up this information because phones have been known to fail. One accident could be all it takes to lose Bitcoin unless the information is backed up. Some of these apps might be connected to the web so information is actually stored on a server and this is a good choice if the storage service is secure.

 

Which Wallet Is Best For Bitcoin?

 

Every Bitcoin owner needs to research different Bitcoin wallet options. Beginners might be happier with a third-part service that takes care of security and backups, but it is very important to research these services because quality can vary quite a bit. Also, even companies that were considered very good have suffered from attacks, so it is important to find out what they will do to protect assets.

 

Otherwise, those who want to be assured of total privacy might consider using their own computer or device storage, but they need to be very careful to protect those devices and constantly make backups.

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