Types Of Bitcoin Wallets

Before purchasing your bitcoins, you first need to know what types of bitcoin wallets are available to you. Just like any other form of currency, you need somewhere to store your money and that is still the case with a digital currency like bitcoin. To avoid any risk of a potential hack, or fraud, or on the off chance that the exchange site you are using goes out of business, you’re going to want to take your bitcoins out of your exchange site and put them in your bitcoin wallet as soon as possible. We've researched many bitcoin wallet options and these are the different methods in which you can choose.

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There are quite a few different bitcoin wallets that are available to choose from but as long as you know what you are looking for, it should be easy for you to narrow it down. The top bitcoin wallets available for US players come in the form of independent, 3rd party, multi-user, and physical wallets. We break each of these bitcoin wallet types down here.

An independent wallet just means that you and you only are the owner of your bitcoins so you don’t have to go through any 3rd party. This was actually the original concept for bitcoin wallets as an independent wallet called Bitcoin Core was the first bitcoin wallet ever. These are considered more secure than other methods but require you to be more hands on and are more difficult to start.

The name essentially tells you exactly what goes into this wallet type but we will go ahead and explain it anyway. Third party wallets are controlled by a…get this…third party. I know crazy right?! Those of you that are just learning about bitcoin should know that this is the traditional method used for beginners. You are provided more freedom as far as accessibility is concerned but you are relying greatly on the third party you choose to use, so you have to make sure you have done your research.

Again, just like a third party wallet, the name “multi-user” gives you an indicator as to how this method works. This is a wallet that has multiple owners that both need to give authorization to make any transaction using this wallet. So if one owner wants to send bitcoins to somebody else, they would need authorization from at least one of the other owners before it can be done. This adds another level of security to the wallet because if somebody steals the key code of the wallet, there is no way to get in without somebody else plugging in the key code as well. Copay is a good example of a solid multi-user bitcoin wallet.

Physical wallets include things like flash drives, bitcoin hardware (ledger technology), and even paper wallets. Physical options are great because the point of a bitcoin wallet is security and if your wallet’s security letters and numbers are written down on a piece of paper, or put on a flash drive, then you have more control over them than other methods.

Regardless of the method you choose, there are perks to all of these bitcoin wallets. Hopefully, this ReviewBitcoin.com bitcoin wallet guide helped you to understand the various types of wallets and will lead you to choosing your preferred method.