Advantages & Disadvantages of Electronic Bitcoin Wallets

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Bitcoin is a type of CryptoCurrency. It is also called modern currency/ technology. That is invented by an unknown person or group in 2008. In 2009, it was released as open-source software. There is no physical shape of this Currency. You can only convert Bitcoin Currency into your country Currency to use. By using Bitcoin Currency you can buy or sells online things in special markets. In America, you can buy products or services by using Bitcoin CryptoCurrency. It is the new and latest trending Currency and Bitcoin Era has already been started.

What is a Bitcoin Electronic Wallet?

Bitcoin wallet is a software or place that is used to store Bitcoins. You can access the Bitcoin wallet on your mobile phone, laptop, and computer. If you want to buy Bitcoins, then you must need a Bitcoin wallet. Without a Bitcoin wallet, you can buy any CryptoCurrency. The only thing you need for your Bitcoin wallet is the address. But if you don’t have an electronic bitcoin wallet. It means you not able to buy or sell bitcoins. Without an E-wallet, the idea of bitcoins will die.

There are different types of Electronic Bitcoin wallets available in the market. Their Advantages or disadvantages are different. Every pros and con depending on the type of wallet.

Some wallets provide extra security but not easy to use. On the other hand, some are very easy to use but no highly secured. In this article, I explain different types of bitcoin electronic wallets. And also the advantages or disadvantages of bitcoin electronic wallets.

Categories of Electronic Bitcoin Wallets

1. Hot Wallet
2. Cold Wallet

Hot Wallet

A hot wallet is a program. That is use to store bitcoins or any cryptocurrency with the help of the internet. The hot wallet allows you to send or receive bitcoin or any cryptocurrency anywhere at any time.

Advantages of Hot Wallet

• It is best for regular or micropayments.
• Very easy to use
• Physical storage not required

Disadvantages of Hot wallet

• Easy to hack
• Always required internet connection
• Uninstall the program of hot wallet, may the reason to lost wallet forever.

Cold Wallet

A cold wallet is a method to stores your bitcoins offline. This type of wallet does not tie with the internet. It is the best but time-consuming wallet. It provides extra security to your private or public keys.

Advantages of Cold Wallet

• Highly Secured
• Offline storage

Disadvantages of Cold Wallet

• Not good for regular payments
• Lost chances are very high
• Required backup

Types of Electronic Bitcoin Wallets

1. Online/ Website Wallet
2. Mobile Wallet
3. Hardware Wallet
4. Desktop Wallet
5. Paper Wallet

Online/ Website Wallet

Online wallet is one of the latest and secure types of bitcoin wallet. It is considered the best wallet for a small number of transactions. Online wallet is also called website wallet. It provides you to access your bitcoin with the help of the internet. It means when you are connected to the internet. You can access, store, or transfer bitcoins. Online wallet stores bitcoin keys on their server. You can access your bitcoin private or public key any time with the help of the internet. You can access your online wallet from any device that is connected to the internet.

Advantages of Online Wallet

• Quick registration
• Fast transactions
• Don’t need any verification
• Able to manage multiple cryptocurrencies
• Easy to use on the go and active trading

Disadvantages of Online Wallet

• It is very easy to hack and scams
• Computer viruses can badly affect online wallets.
• The third-party server can store your cryptocurrency
• Lack of trust
• Highly money consuming

Some Example of Popular Online Wallets

1. Holy Transaction
2. Coinbase
3. Cryptonator

Mobile Wallet

A mobile wallet is an app that is installed on your smartphone. It is the best wallet for mobile users. This use of mobile wallets is the same as Apple pay. You can buy products and services in a physical store. And pay for these things by using your mobile wallet. The blockchain of mobile wallets is stored on the application server. It provides you the feature to access the updated data. It is just a small program for mobile devices. So, it takes less amount of your mobile data to download. The cryptocurrency on physical stores is acceptable with mobile wallets.

Advantages of Mobile Wallet

• The security level is good
• Easy to use on the go
• QR code scanning is a good feature of mobile wallets.

Disadvantages of Mobile Wallet

• Risk of mobile viruses
• If your smartphone lost or damage you may be lost your bitcoins.
• Not easily but hackers can hack mobile wallet
• Not a good choice for a large number of bitcoins

Example of Popular Mobile Wallets

1. Goinomi
2. Xapo

Hardware Wallet

A hardware wallet is a type of cold wallet. It is the best and safe way to store bitcoins or another cryptocurrency. A hardware wallet stores your private or public keys on a removable device. It mostly uses the USB drive to store bitcoin keys. It also provides you online transactions. But, most of the time this wallet is offline. That’s why the chances of hacking are reduced. But, it is not popular yet. Because it is not good for daily transactions. You can use it for long-term transactions. A hardware wallet is inconvenient for trading. But it doesn’t overload your computer.

Advantages of Hardware Wallet

• Highly secured
• Great for storing a large number of bitcoins

Disadvantages of Hardware Wallet

• Most expensive type of electronic wallet
• Not user-friendly interface

Example of Hardware Wallet

1. KeepKay
2. Ledger Wallet
3. Trezor

Desktop Wallet

A desktop wallet is a computer program that is downloaded or installed on your computer. It is a secured wallet. If your computer is not connected to the internet this wallet becomes a cold wallet.

Advantages of Desktop Wallet

• Best choice for computer-based trading
• All private keys stored on your system
• The offline computer is provided extra safety to your bitcoin

Disadvantages of Desktop Wallet

• Difficult to use on the go
• Online computer provide less security
• Loss of computer is the reason to lose your private keys.

Example of Desktop Wallet

1. Exodus
2. Bitcoin Core
3. Armory

Paper Wallet

A paper wallet is the best option for those who don’t trust electronic devices.

It prints the picture of the QR code on paper. This QR code consists of a public address or private keys. A paper wallet is best for long-term storage options. You can scan this QR code to transfer any amount of bitcoins.

Advantages of Paper Wallet

• Ultra hack-proof
• Not store on computer, mobile or third party

Disadvantages of Paper Wallet

• Only User friendly for geeks users
• The day-to-Day transaction becomes harder
• Fire burn your QR code paper

Example of Paper Wallet

Bitaddress.org

Conclusion

We hope you will understand what is electronic bitcoin wallet. And also its different types and categories. I also explain the advantages or disadvantages of electronic bitcoin wallets according to their types.

I hope this article is helpful for you and easy to understand. If you have any problems or questions about this topic, please ask them in the comment section.

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