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A Bitcoin wallet is not like a normal wallet. It doesn't go in your pocket and you can't claim you left it at home when it's your round. A Bitcoin wallet is actually a smart software programme that can track, send, and receive the Bitcoin cryptocurrency. You could say it’s more like a bank account, but unlike a bank account, no one can gate-keep your money when it’s inside a Bitcoin wallet. So, join the cryptocurrency revolution and say goodbye to the possibility of your transactions being monitored, or funds being frozen, and hello to full control over your finances.
Private and public keys?
Every digital wallet is assigned a private and public key. The private key is a 256-bit number which you use to access your digital wallet, view your balance, and make trades. The public key is like an address in that you share it with other people so they can send you funds and view your balance.
Hot and cold wallets?
Digital wallets can be stored in many different forms, both online and offline. Offline wallets are commonly referred to as cold wallets whilst online wallets are referred to as hot wallets. Cold wallets are commonly stored in USB devices, with the most common being Trezor and Nano Ledger.
Hot wallets exist online and are always connected to the blockchain, with Electrum and Blockchain being some of the most common hot wallet software used. Hot wallets are often preferred to cold wallets due to their convenience and compatibility with multiple devices, allowing for easy access to your funds. However, the downside to hot wallets is that being online leaves the wallet more at risk to remote hacking.
Cold storage devices are commonly used for their security due to the wallet being held offline which means they cannot be hacked. The concept being that if the device is not connected to the internet, then it will be impossible for a person with malicious intent to access it. However, the downfall of cold storage devices such as USB’s is that they can be easily lost or sometimes corrupted, consequentially losing your funds. But fear not, all cold wallet manufacturers design tried and tested methods, allowing easy recovery of your cryptocurrency should a disaster happen.