DEFINITION of 'Bitcoin Wallet'

A Bitcoin wallet is a software program where Bitcoins are stored. To be technically accurate, Bitcoins are not stored anywhere; there is a private key (secret number) for every Bitcoin address that is saved in the Bitcoin wallet of the person who owns the balance. Bitcoin wallets facilitate sending and receiving Bitcoins and gives ownership of the Bitcoin balance to the user.  The Bitcoin wallet comes in many forms; desktop, mobile, web and hardware are the four main types of wallets.

BREAKING DOWN 'Bitcoin Wallet'

A Bitcoin wallet is also referred to as a digital Wallet. Establishing such a wallet is an important step in the process of obtaining Bitcoins. Just as Bitcoins are the digital equivalent of cash, a Bitcoin wallet is analogous to a physical wallet. But instead of storing Bitcoins literally, what is stored is a lot of relevant information like the secure private key used to access Bitcoin addresses and carry out transactions. The four main types of wallet are desktop, mobile, web and hardware.

Desktop wallets are installed on a desktop computer and provide the user with complete control over the wallet. Desktop wallets enable the user to create a Bitcoin address for sending and receiving the Bitcoins. They also allow the user to store a private key. A few known desktop wallets are Bitcoin Core, MultiBit, Armory, Hive OS X, Electrum, etc.

Mobile wallets overcome the handicap of desktop wallets, as the latter are fixed in one place. Once you run the app on your smartphone, the wallet can carry out the same functions as a desktop wallet, and help you pay directly from your mobile from anywhere. Thus a mobile wallet facilitates in making payments in physical stores by using "touch-to-pay" via NFC scanning a QR code. Bitcoin Wallet, Hive Android and Mycelium Bitcoin Wallet are few of the mobile wallets. 

As for web wallets, they allow you to use Bitcoins from anywhere, on any browser or mobile. The selection of your web wallet must be done carefully since it stores your private keys online. Coinbase and Blockchain are popular web wallet providers.

The number of hardware wallets is currently very limited. These devices can hold private keys electronically and facilitate payments but are still in the development phase. 

Keeping your Bitcoin wallet safe is very crucial. Some safeguards include: encrypting the wallet with a strong password, and choosing the cold storage option i.e. storing it offline.  

Paper Wallet

A paper wallet is an offline mechanism for storing Bitcoins. The process involves printing the private keys and Bitcoin addresses onto paper. Physical wallets, also known as "physical Bitcoins," are considered one of the safest ways to store Bitcoins provided certain security precautions are followed. Images of physical Bitcoins are commonly seen in media coverage in innovative styles, mostly with a ‘new look’ of the coin and the private key printed either on paper, plastic, or metal.

BREAKING DOWN 'Paper Wallet'

A paper wallet is considered a safe way to keep Bitcoins safe from cyber-attacks, malware, etc. A paper wallet involves "printing" and storing Bitcoins in an offline mode. But it's important to remember that, it’s not the Bitcoins that are being printed out like regular currency. It's the information stored in a Bitcoin wallet or digital wallet that gets printed out. The data appearing on the wallet includes the public key (wallet address), which allows people to transfer money into that wallet, and the private key, which gives access to fund spending. Thus, Bitcoins themselves are not stored offline, but the important keys are stored offline.

The main advantages of the paper wallet include: safety from malware and key loggers; not having to bank upon the security of any website; and protection of private keys by 100% ownership. The flipside, however, is that the safety of the physical document can't be guaranteed either. All information required to spend the Bitcoins is there on a paper and thus should be kept very secure. If a paper wallet is lost, there will be no way to access the Bitcoins sent to that address.

Some of the popular tools for producing paper wallets are BitcoinAddressUtility, BitAddress.org, BitcoinpaperWallet.com, OfflineAddress.com, and SafePaperWallet.com. There are some companies that even offer "cold storage" services, i.e. keeping the private key in printed form in a physical location like a safe vault. Such companies are not regulated by the financial services industry, but they are insured against theft. 


Jaxx Wallet

 

Jaxx is an Ether, Ether Classic, Dash, DAO, Litecoin, REP, and Bitcoin wallet that is in early beta. It is developed by Kryptokit.

Wallet Philosophy:

  1. They never access or hold onto user funds.
  2. They offer a client-side security model, with private keys hosted locally and never sent to any servers.
  3. They are design-oriented, offering simple, attractive user interfaces and experiences
  4. They use standards that ensure that should the wallet ever go down or cease to exist, your keys can be imported into another service.
  5. They remove friction points whenever possible
  6. They never require users to input any personal information including email addresses

With a focus on unifying the look and feel across devices and focusing on customer service, security, design, and user experience, their goal is to make the Jaxx Bitcoin and Ethereum wallet default wallet of choice for the masses.

Features:

  • Single master seed backup (This will be the only seed you will even need in the future for any coin they integrate)
  • Bitcoin - HD (Hierarchical Deterministic)
  • Ethereum Unlockable (EASTER EGG UNLOCKABLE) - Currently single key pair, however, HD Ready when Ethereum HD standard is determined)
  • Easily Switch between BTC & ETH
  • Single Screen Operation - All wallet functions work on a single screen. No more flipping between send and receive * screens or trying to find your wallet address or QR code.
  • Menu animations deliver stellar UI / UX
  • Native camera scanning
  • Pair Across Devices - Easily sync across devices (Mobile, Desktop, Extension) by scanning a pairing token or inputting seed. (Only available as they roll out other versions in the coming days)
  • Multi-currency
  • Switch between fiat and BTC / ETH
  • Spendable balance display
  • Max Send feature
  • Generate custom amount QR code
  • Single code base across all devices - ensures rapid integration of new features across all versions and devices with minimal individual customization
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