What is a Bitcoin / Cryptocurrency Wallet & Address?
A Bitcoin wallet is digital in nature. Also known as an e-wallet or virtual wallet, it stores a user’s transaction and various identification information. In order to buy, sell, trade, send, receive, or gift Bitcoins, you need to first create a Bitcoin wallet and address from a public Bitcoin / cryptocurrency exchange.
You may create multiple BTC addresses inside a wallet. If someone is sending you Bitcoin, you will need to supply them your address in order for the BTC to be sent, and vice versa.
What is a Bitcoin/cryptocurrency wallet?
A Bitcoin Wallet is simply a piece of code from a software. This piece of software instructs the Bitcoin network on when and to whom to send transactions to and receive transactions from. An email address is the best illustration of a Bitcoin Wallet. Once an account/address is established and set up, you can send and receive emails to that account or address.
A piece of software like Gmail, Yahoo, or Microsoft allows the communication to route back and forth. Like an email, a Bitcoin Wallet needs a username and password. It can be used from an application (App), a desktop computer, laptop as a piece of software, or be logged into from an Internet browser.
Not all Bitcoin wallets are good or created equal. Some you should avoid like the bubonic plague because they either don’t have a long history to prove themselves trustworthy or outright scams. We have recommended a list of the best Bitcoin wallets to use to store your Bitcoins & other cryptocurrencies. We’ve been using them for years with no issues.
What is a Bitcoin/cryptocurrency address?
A bitcoin address is a 32-character string comprised of 0’s and 1’s. It’s a unique identifier. Think of it as a bank account, but anonymous. In other words, it’s impossible to know who a Bitcoin address belongs to. At a high level, the address is generated from a set of 255 characters using a computer system algorithm. The address is used to send and receive Bitcoins. Each cryptocurrency has its own unique address. A single bitcoin wallet may have multiple addresses.
What does a Bitcoin Wallet Look Like?
This is an example of a bitcoin address and QR code holding a Bitcoin address’ 32LSk82pmA85k7Q2HNvtT2Pqkf2pc81AT7.’ This address is one of my real Bitcoin addresses generated from one of my wallets. It is 34 characters long, which is a typical length of a Bitcoin address. Between 33/34 characters long.
The fastest way to lose your money or crypto is to send Bitcoins to a wallet address that is not Bitcoin. For instance, sending Bitcoin to an Ethereum wallet address and vice versa will get you in trouble. That bitcoin is gone forever and can never be recovered. No one, I mean no one can help you recover it… so be careful.
What are the types of Bitcoin/cryptocurrency wallets?
There are five commonly used types of Bitcoin wallets: Online wallet, mobile wallet, desktop wallet, hardware wallet, and paper wallet.
Online / web wallets – are wallets that are stored and run distributed network systems known as the ‘cloud.’ They can be accessed from electronic devices, as long as those devices have internet connections. Online wallets are convenient because they can be accessed anywhere at any time. However, they are less secure than, let’s say, desktop, hardware, or paper wallets.
Mobile wallets (iOS / Android) – These wallets are applications (apps) installed on your mobile phones. Mobile wallets are more convenient for instant payments because they can be used/scanned in physical stores that accept Bitcoin and/or other cryptocurrencies. Mobile wallets are generally more secure than cloud, but now without flaws. Losing or your phone breaking down can create issues.
Desktop wallets – One of the most popular wallets for security-conscious users is the desktop wallet. These wallets must be downloaded and installed on your personal computer (PC) or laptop. That doesn’t mean your Bitcoin/cryptocurrency is 100% secure because your PC can be infected with viruses, get hacked, suffer internal or external damages.
Hardware / physical wallets – This is a USB-like device that can be connected to cryptocurrency exchanges in order to make transactions. Your Bitcoin or cryptocurrencies are stored in the device with private keys. The wallet is hot when it’s connected to the internet, but cold when it’s not. Hard Wallets need to be made hot only when the users are performing a transaction. Hard wallets are a little more expensive than other wallets, due to the fact that it’s a physical device. As a result, it’s more secure than the other wallets described above.
Paper wallets – The safest method currently available to store Bitcoins and/or other cryptocurrencies are paper wallets. This method is simple and traditional. You simply generate your public and private keys and write them down on a piece of paper. I recommend you copy, paste, and print so that you don’t miss or write down wrong numbers or characters. Bitcoin addresses and public keys are complicated… some numbers/characters can be misread or misinterpreted by the naked eye. To transact, simply copy/paste or enter your public and private key into the system or scan a QR code.