If we go back to the year 2018, when bitcoin was priced at $20,000, its value had dropped significantly from an all-time high, causing a lot of people at the time to think that the cryptocurrency was dead. It happened, but nothing like this happened. Today, the crypto market is on a very massive bull run, and if we talk about a few months back, it went above $60,000, which has caused other cryptocurrencies to hit historical records. As of today, at the time I am writing this article, the value of bitcoin is at $45.044.
If Bitcoin is seen in its natural form, its rising price is attracting new enthusiasts like a wave. Unfortunately, there are some people who get involved with this market even without the sensibilities involved with cryptocurrency wallets. In this, hackers or some people become victims due to their own mistakes, due to which they lose their cryptocurrency savings. At the moment if you are a trader or investor new to bitcoin, the first thing you need to know is how a hardware wallet works and why you should use it. If you want to invest in bitcoin, then you can read more from here.
What is a bitcoin wallet?
There are a few important points associated with bitcoin ownership: with which you can keep the private key of anyone’s address, with only the bitcoin owner stored at its address. A bitcoin wallet can also conveniently store one or more bitcoins at the same time on its address, with the public and private keys at the same time. There are four types of wallets:
- Online Wallet: This is an online bitcoin wallet, which you can also use through a website or app, it can store your bitcoin keys through a server.
- Paper Wallet: These can physically print versions of your public key and private key. This is a wallet that includes your keys as well as a QR code, which makes it even easier to use.
- Hardware Wallet: This is a bitcoin wallet that allows you to store your keys on a piece of hardware, and is specifically designed for specific bitcoin transactions.
- Software Wallet: You are also provided with a Wallet application for this so that you can easily use it on your computer or smartphone as well. With it, you can easily store your keys on a local device or flash drive.
How and when you can store private keys, with which you can determine the security of your coins. Each bitcoin wallet has its benefits, security and tradeoffs.
Why do I like Hardware Wallets and why am I asking you to use Hardware Wallets?
Whenever you choose a bitcoin wallet, you need to be very careful at that time. If you haven’t learned all those basics of bitcoin yet, it doesn’t matter which wallet you choose or are going to choose now. I love hardware wallets because it helps reduce the risks involved in your bitcoin wallet, which are impossible for all of us to control.
A few things to keep in mind when you choose a hardware wallet:
- The recovery seed is included in your wallet, using which you can restore your keys. You can also get a new one if you destroy or lose the device. You need to keep safe for recovery seed.
- You need to check the address in it before whenever you confirm the transaction: so that someone can’t hack the hardware wallet when signing the transaction with bitcoins. You have to make sure whether the source of the address is valid. Whenever you confirm the transaction before that make sure to check two, three times to confirm the address.