Choosing a wallet type is one of the most important steps in buying Bitcoin for the first time. A Bitcoin wallet is any software program used to send and receive Bitcoin (BTC). There are five types of Bitcoin wallets: desktop, mobile, hardware, web and paper. The most important features of a wallet are the custody of the keys and its type of connection to the internet. Chances are good, one of these wallets will be appropriate for your needs.
Hot wallet refers to wallets that are connected to the internet, while cold storage refers to wallets that are offline. Cold storage is generally more secure, and hot wallets are faster and easier to use.
A desktop wallet is a product you download and execute locally on your PC and this enables you to access your crypto funds. Some examples of popular Desktop Wallets are Bitcoin Core, BitPay, Exodus and Bisq.
Mobile wallet describes any bitcoin wallet that saves software to a mobile device, usually comes in the form of an iOS or Android app. This mobile app gives you full access to your bitcoin. Some examples of popular mobile wallets are Bitcoin Wallet, BitPay and Trust Wallet.
Hardware wallets offer arguable the highest level of security for crypto assets by keeping the funds in cold storage on a hard drive or USB drive. Hardware wallets store private keys offline, rather than hot or software wallets. Some examples of popular hardware wallets are Trezor, Ledger and KeepKey.
Web wallets are perhaps the most popular of wallet types, but they are not the best for long-term storage of assets. A web wallet can be accessed through a browser in the same way you would access your email. Web wallets are more vulnerable to theft or cyber attacks than hardware wallets. Some examples of popular software wallets are Coinbase, Kraken and Redeeem.
Popular in the early days of Bitcoin, paper wallets work by having a single private key and Bitcoin address printed onto a piece of paper. However, exchanges today have stopped suggesting that users make paper wallets altogether. Paper wallets lack basic security features like two-factor authentication (2fa), seed phrases and other safety techniques.
Chances are good that one of these Bitcoin wallets will meet your needs. Some users prefer security, while others prefer usability. Some people like to create paper wallets out of curiosity or to send as gifts. Please make your own decision based on a careful evaluation of your needs.