What are the Different Bitcoin Wallets One Can Choose From Such a wallet is a combination of public and private key technology

By Vishal Gupta

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


A Bitcoin wallet is a bank account for transacting in crypto-currencies. Without a Bitcoin wallet, you cannot send or receive Bitcoin payments. Therefore, before you get bitcoins, you will need to buy, download, or create a Bitcoin wallet.

The Bitcoin wallet is a combination of public and private key technology. The public key indicates the amount payable/receivable and the private key tied with the public key establishes the ownership. There are many different types of Bitcoin wallets but the wallets can be divided into two main categories; Hot Wallet and Cold Storage Wallet.

Hot Wallet v/s Cold Storage Wallet

A Hot Wallet in Bitcoin parlance indicates online storage wallet. Hot storage wallets are accessible from any web portal. These wallets are not recommended as they are susceptible to hacking. A cold storage wallet, on the other hand, is stored offline and is not accessible to hackers.

Here are the four different types of Bitcoin wallets that you need to know about: -

Software Wallet

Software wallets require applications to be downloaded on a computer to create and access a Bitcoin wallet. Software clients are available for both desktop and mobile platforms. Some desktop clients such as Bitcoin Core require the entire Blockchain to be downloaded onto the computer, and run into sizes upwards of 100 GB. However, MultiBit is a lighter software wallet which does not require the Blockchain to be downloaded.

Among mobile-based software clients, MyCelium offers a robust software wallet for Android and iOS platforms. There's also Copay offers mobile as well as desktop online wallets.

Note: Software wallets are only as secure as the computer/mobile they are stored on. It isn't impossible for a malware to steal information. And desktop based software require technical know-how before you can operate them.

Online Wallet

Online wallets are the easiest to use among all different types of Hot Wallets. Creating an online wallet is as simple as signing up for a new account on BlockChain. This wallet can be accessed from any computing device connected to the Internet.

Note: Your private key is stored on another server when using the online wallet. This makes online wallets vulnerable to theft. For instance, back in 2014, hackers stole Bitcoins worth $460 million from Mt. Gox, a popular Bitcoin exchange site. Online wallets hence should be used only for small, everyday transactions.

Paper Wallets

Paper wallet is a fancy name for printing your public and private key on a piece of paper. Paper wallets are highly secure as they are offline and is in your physical custody.

Most online/software wallet services allow you to print your existing wallet keys. In case your wallet does not allow, go to BitAddress and print the public private key combination.

Note: Make sure you have multiple copies of your paper wallet and keep them in a secure location.

Hardware Wallets

Hardware wallets are cold storage wallets that generate keys on demand while making transactions. These USB shaped devices need to be plugged into your computing device while transacting.

Hardware wallets are secure from computer malware since they are offline and generate the keys on the device. Extremely convenient to use, hardware wallets do not require technical knowhow to operate. They have sturdy backup options so that you do not lose access to your wallet. They can also be secured with a password to combat theft.

Note: If you deal in Bitcoins regularly, invest in Hardware wallets such as TREZOR or Ledger Wallet. Ultimately, the safety and security of your Bitcoins is your responsibility. Hence, choose your wallet after carefully weighing your options.

Vishal Gupta

CEO, SearchTrade

Vishal Gupta is the Co-founder and CEO of Searchtrade.com, a disruptive search platform which allows its users to ‘own’ keywords and earn in Bitcoins while they search on the internet. Vishal aims to bring about a paradigm shift in the way people search on the internet. He sees great potential in Bitcoins or cryptocurrencies as an alternative transaction system and believes in the opportunities that it can bring to the internet economy. He also holds a patent in Computer Implemented Methods and System for Trading Keyword(s) in a Search Network.

Prior to SearchTrade, Vishal co-founded Bitcoin Alliance India in 2014 - a non-profit organization, encouraging the Indian market towards bitcoins and related services. Today BAI engages with various law firms and government departments to help them understand Bitcoin or Crypto currencies in order to help them come up or frame laws to legitimize use of bitcoins in India.

Related Topics

Starting a Business

7 Lessons I Learned From Selling a 6-Figure Blogging Business

Here are a few critical lessons from my experience building and selling a successful blogging business.


The Coolest Way to Commute Is Less Expensive Than Ever

Gift yourself a better commute with $1,500 off this eBike.

Business Ideas

55 Small Business Ideas to Start in 2023

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2023.

Side Hustle

Anyone Can Start a Passive Income Side Hustle For Easy Money — But Only If You Know These 5 Essential Tips First.

The rise of digital automation technology has made starting a passive income side hustle easier and more accessible than ever before.


If You Want People to Follow You, Stop Being a Boss — 8 Steps to Truly Effective Leadership

Understand the key differences and embark on the journey from boss to leader with these eight vital steps. This article unveils how to inspire and lead teams with passion and purpose.