Bitcoins are stored in special wallets that consist of private and public keys (see above). There’s a huge number of cryptocurrency wallets with different features and it’s hard to recommend one that would cover all your needs. Let’s see the major differences between various wallets.
You can download and install these on your computer. They will only work and be accessible on this single computer. They are among the most secure wallets, unless your computer gets hacked or attacked by a virus.
Online wallets run on a server and can be accessed from any device at any location. They are the most convenient to use, but remember that your private keys are stored online and with a third-party - the probability of hackers’ attacks and theft is higher.
Don’t offer as much functionality compared to desktop wallets, however their convenience lies in the fact that you always have the wallet with you and can use it anywhere, e.g. to pay at a retail store.
They represent the so-called cold wallets, meaning they operate offline - unless a payment needs to be made. Hardware wallets store your private keys on a storage medium, and usually connect to a computer via USB to make a payment transaction, after entering a pin. Easy to use with a high level of security.
Although it sounds strange or even funny to talk about paper wallets in connection with a digital currency, they exist - in the form of printed-out private and public keys. Because of their physical (and offline) nature, they provide a very high level of online security.
Which Bitcoin Wallet Should I Use?
There’s no single answer. It is best to realize what is the desired purpose of the wallet. If you want to use it to regularly pay and receive small amounts of Bitcoin, then mobile or online wallet makes sense due to their ease of use. If however, you want to use the wallet to hold a small Bitcoin fortune then security should be your priority.
It is best to approach Bitcoin wallets as you would your regular money - cash and credit card is used for small payments, while your savings sit securely in a saving account, or spread out in several investments.