In simple words, wallet acts like a bank for Bitcoin so that you can store, receive and send bitcoin whenever necessary to other people. The Bitcoin wallet is divided into two main parts:
- Hot wallet
- Hardware wallet
Hot Wallet: The wallet that one can have in their computer systems and cell phone devices by installing it is known as a hot wallet. Since they are on your personal devices, how you secure them is left to you and these devices are always connected to the internet, therefore this type of wallet is not that secure.
Hardware Wallet: This wallet makes sure to store you cryptocurrencies when it is not connected to internet providing a great level of security to the coins. When they are stored in an offline type of storage, the hackers and malware cannot affect them. People who are new to digital currency world can choose from the wallets that are listed below
- Coinbase: This type of wallet is very easy to understand as its layout is very simple. It includes few features that are very handy making it an excellent choice for novice users. Sending and receiving of bitcoins can be done through email whereas buying and selling of bitcoins are done directly through Coinbase wallet.
Since it is a web wallet, once you get the knack of things it is safe to shift all the bitcoins from Coinbase to other wallets like Ledger Nano S and TREZOR because Coinbase is only good for buying bitcoins and to learn about all the other things, but not a good place to store your coins for a long time. Also please check this out. There is also an app on Android for Coinbase which has all the features included in it which are on the tip of your finger. There is a track record that has been proven for a start-up by the founders of Coinbase. They were able to raise money for this from well-known venture capitalists because of which we can say that Coinbase is legit. They are also enlisted in one of the largest Bitcoin companies and have never tolerated a big hack.
- Electrum: This wallet is a software type of wallet using which you can build a powerful security in a short time. During the time of software installation, the user is given a phrase which has 12 words in it that you can make use to recover your bitcoins if your system fails.