The way we have a normal wallet in our regular life is essential, just like that having a bitcoin wallet is also necessary in the crypto world. The function is the same for both of these wallets and it is to store money. Though one carries traditional money and one carries digital money. In a bitcoin wallet, you will store all the bitcoin private keys. Though, when we move towards technology and online elements, things tend to get a bit more complex but easy at the same time. Now that you know what a bitcoin wallet is, you will also have to know about the different types of bitcoin wallets.
There are about 6 different types of bitcoin wallets. All of them have different functions and they work differently. The first type of wallet is known as the hardware wallet. This wallet is specialized and it is a type of device that is designed specifically to store bitcoins. The main difference between a traditional crypto wallet and hardware is that the latter has a physical form. These hardware wallets exist in the real world and there are some additional elements to look at before you buy one of them.
Always Have Your Backup
Many people might not know but when it comes to choosing a wallet that deals with cryptocurrency, you have to choose it based on your lifestyle. If it fits your lifestyle then it is good to go. Though, if you are an active person when it comes to dealing with their cryptocurrency then a smaller device would suit you well because it will help with portability. However, the main thing over here is that no matter how big or small your wallet is, you will need to secure your device. There is more care needed in this type of wallet because there are higher chances of it getting stolen, lost, or destroyed if you do not store this wallet properly.
There are some measures you can take to eliminate these changes. You can always maintain your hardware wallet in a location that is secure and dry. If we look on the bright side, even if your wallet does get stolen then getting back all the data can be done. For that, you will need to ensure that you have your backup on and do it on a regular basis. The way you can do this is by using backup seeds. These are a group of random words that allows you to access toy our cryptocurrency within a crypto wallet. They can be used for any type of wallet. Hence, always make sure that you store your backup phrase in a secure location. If you lose your backup then there is no coming back.
Which One Is The Best Cold Storage Or Hot Wallet?
You might be thinking now that what this has got to do with hardware wallets. Well, to be able to understand hardware wallets better, it is essential that you know about these as well. Both of these terms refer to the internet state of the device. The internet connection also functions as a potential attacker for hackers so that they can access your holdings. Therefore, hardware wallets only communicate to the internet when you directly attach them. This way, your hardware wallets are more secure and they restrict hackers from getting to your account.
Many people might come to think why is there a need to have a hardware wallet when there are other online wallets that can keep you safe. Well, the truth is that hacking can take place no matter what your wallet type is. There are huge companies that are bitcoin billionaires and they use bitcoin hardware wallets to store their bitcoins. The hack that they have is that they distribute the seed phrases across multiple bank security boxes so that they are secure no matter what happens. This is also a good tip that you can do. Moreover, there will be some people who will be handing out used hardware wallets. This is a big chance of you getting robbed through bitcoin. Therefore, whenever you want to buy a hardware wallet, make sure that it is new and that only you know about the private and public keys.
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