What Is a Bitcoin Wallet?
A Bitcoin wallet is the software you use to interact with the Bitcoin network. It allows you to send, receive, and store your bitcoin securely. Contrary to its name, a wallet doesn't store your actual coins; instead, it holds your essential private keys.
Your Keys, Your Coins
The most important function of a wallet is to manage your private keys. These keys are what give you ownership and control over your bitcoin. A "non-custodial" wallet, like the BitSleuth Wallet, ensures that only you ever have access to these keys.
Types of Wallets
Bitcoin wallets come in various forms, each offering different balances of convenience and security.
Mobile
Apps on your smartphone that make it easy to send and receive bitcoin on the go. They are convenient for daily use.
Desktop
Software installed on your computer, often providing more advanced features and a high level of control over your funds.
Hardware
Physical devices that store your private keys offline, providing the highest level of security against online threats.
Hot vs. Cold Wallets
Wallets are also categorized by whether they are connected to the internet. This is one of the most important security considerations.
Hot Wallets
Any wallet that is connected to the internet (e.g., mobile and desktop wallets). They are convenient for spending and frequent use but are more vulnerable to online attacks. Best for small amounts.
Cold Wallets
A wallet where the private keys are stored completely offline (e.g., a hardware wallet or paper wallet). They offer the highest level of security for long-term storage but are less convenient for transactions. Best for large amounts.