The biggest misconception when people are answering the question on what is a bitcoin wallet is that they think that they are comparable to bank accounts. People think that bitcoin wallets are where you store the bitcoins. This misconception is even written in some website for making the public to understand the whole concept of bitcoins in an easier way. However, the truth is, bitcoin wallets is where you store two types of keys namely:
- Private keys
- Public keys
These keys allow you to make bitcoin transactions. This means that if you do not have the keys, you will never be in a position of doing any digital transactions using bitcoins. In simpler terms, Bitcoins are stored in block chains, and individuals access them using the private and public keys.
Private keys must be kept very secure and secret. Any other person accessing them can make transactions on behalf of the bitcoin owner. Still, if one loses these keys, then they cannot make any bitcoin transaction, which may mean loss of bitcoins currency. For these reasons, people are advised to have back up storage for private keys. Public keys allow you to send bitcoins directly to another person without necessarily having to seek the services of a middle man.
Choosing the Right Bitcoin Wallet
It is wise to evaluate your options when choosing the right kind of bitcoins wallets for you. They are many options available; from the software wallets, to the web wallets, to the paper wallets. All these types of wallets have advantages and disadvantages. You need to think about the security of the wallet and the accessibility factor.
Many people opt for software wallets because of ease of accessibility and for security reasons. However, some are skeptical about storing these wallets on unsafe computers. Other people will want to safeguard their wallet from the crimes of the digital world and hence choose paper and cold wallets. Others prefer web wallets because of the convenience of accessing them.