A digital wallet is needed if you want to trade or invest bitcoin, it is essentially a wallet that enables you to store, receive and send cryptocurrency. Unlike regular wallets, this one requires a private key which is like a password which helps you to keep your currency safe while managing your transaction. Outlined below are the three ways of setting up a bitcoin wallet.
- Setting Up a Software Wallet
This wallet stores both private and public keys which help to in storing bitcoin, sending and receiving it as well as observing the balance after transactions. Setting up this wallet involves downloading it and installing it per instructions that are given.
- Setting Up a Web Wallet
With web wallets, your private key is stored by a third-party server controlled by an administration group. This wallet can be accessed with internet connection which is why it is favorable. It is however unsafe as the third part website can take charge of your bitcoin or it might be subject to hacking.
- Setting Up a Hardware Wallet
Hardware wallets are wallets on devices that electronically hold the private keys. This is a very safe option as there is no need for third-party storage and you can carry it around. All you need to do is buy it and set it up per the instructions of the manufacturer.