There are numerous kinds of Bitcoin wallets, each with oman phone number data ifferent features. Security is the biggest concern because, without it, your assets are vulnerable to scams , hacks, theft, malware, phishing attacks , and losing access to your Bitcoin (BTC). Ease of use is also important, especially for people new to Bitcoin.
This article explores Bitcoin wallets, explaining how they work and the different types available.
What is a Bitcoin wallet?
How Bitcoin wallets work
Types of Bitcoin wallets
Securing your Bitcoin with Proton Wallet
What is a Bitcoin wallet?
A Bitcoin wallet is an application or device that allows you to manage, store, and make Bitcoin transactions. Setting up a Bitcoin wallet(new window)is the first step to engaging with this virtual currency.
Although a Bitcoin wallet might sound similar to Apple Wallet, Google Wallet, and other digital wallets, they are fundamentally different. Most digital wallets are designed for contactless payments and depend on traditional banking systems and credit cards. In contrast, a Bitcoin wallet operates on blockchain technology and acts as your personal interface to the Bitcoin network — similar to how your online banking app is your interface to your bank account.
Learn the basics of Bitcoin in our Bitcoin guide for new users(new window).
How Bitcoin wallets work
At the core of Bitcoin's cryptography are two keys: the public key and the private key. Every Bitcoin transaction requires a private key and a Bitcoin address (which is a hashed(new window)version of a public key).
Bitcoin address : This is an alphanumeric identifier you can share with others so they can send you BTC. It's a shorter, more user-friendly version of the public key. You could think of a Bitcoin address as an account number on the blockchain. An example is 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa.
Public key : This is a long string of characters mathematically generated from the private key. It's practically impossible with current technology for someone to reverse-engineer the public key and discover your private key because it is a one-way cryptographic function(new window).
Private key : This acts as the password of your wallet account, allowing you to access and manage your BTC. Private keys are deterministically generated from your wallet's seed phrase(new window)(plus an optional passphrase) and are used to sign transactions, proving the owner of the Bitcoin wallet has authorized the sending of BTC.