What is a Bitcoin Wallet?
A bitcoin wallet is similar to a bank account. It´s a place where you can store your bitcoins. From the bitcoin wallet, you can make transactions. The bitcoin wallet consists of a private key. This must be kept secret or anyone can use your bitcoins. You must not lose it either because then your bitcoins are lost. The key point of the wallet is to store this key safe. The second key point of a bitcoin wallet is to make transactions.
Bitcoin wallet feature
There are different bitcoin wallets features; desktop, mobile, web, paper and hardware. The wallet types differ in what ways the private key is stored and secured. We will focus on web and mobile wallets since we think these are for the broad audience. These wallets store and obtain the private key for you and connect it to your account. That is the easiest and most convenient way, but you can also store the private key on your own if you want. Some companies offer more features than just a bitcoin wallet which can be exchanged service, trading, peer-to-peer lending, interest account, etc.
Bitcoin wallet security
You should check how the bitcoin wallet company handles the security. Read about how they store the funds and if they have cold storage for the majority of the funds. A cold storage means that the funds are held offline. Some bitcoin wallet companies even explain if the funds are distributed over several servers in different locations. Check how the login function works and if they offer two-factor authentication with Google, Authy or SMS. Some bitcoin wallets also offer multi-signature control which means that two or more parties must sign a transaction. Check how they control and back up your private key. Always remember to distribute your holdings and never keep all in one place at the same time. We have seen large and secure bitcoin wallet companies have been hacked.
Deposits and withdrawals
Every wallet has different deposit and withdrawal methods and fees, The most common are SEPA and wire transfer. Some companies have introduced deposits with debit and credit card. Some bitcoin wallets are also connected with e-wallets such as Paypal, Neteller, Okpay, Pefect Money etc.
If you have a wallet just to keep to your bitcoins safe, transaction costs are not so important. However, if you think you will make a few or many transactions from this wallet the transaction cost is of vital importance. There is always a tiny transaction fee taken from the miners to confirm your transaction. Over this transaction cost, some wallets take a cost to finance their service.
More Crypto Wallets
There is other wallets than just Bitcoin wallets. A few Bitcoin wallets support several coins. However, in our post Ripple XRP wallets we have described certain wallets for the Ripple cryptocurrency.