Unlike all other traditional currencies, bitcoin is a digital currency. Therefore, when it comes to acquiring or storing the currency, it is a whole different story. They cannot be technically stored anywhere considering that it lacks any physical shape or form. Therefore, for access or transaction of the currency, you need a private key which gives you access to your public bitcoin address. Transaction of this currency between you and the recipient is their public key and your private key. The differences between bitcoin wallets are their security features, accessibility, and convenience.
1. Paper wallet
A paper wallet is a document containing public address often used to obtain bitcoins and private keys essential for transferring bitcoins available in your wallet. In most cases, they are printed in the form of QR-codes which make it possible to quickly scan the keys and transfer the currency to your bitcoin wallet. There are services such as the “bitcoinpaperwallet” or the “bitaddress” which are responsible for generating services that allow you to create random bitcoin addresses and a private key to it. The paper wallet has an advantage because its keys are not stored in digital form. Therefore, they are almost entirely prone to fraud.
2. Physical wallet
On the other hand, physical bitcoins are preloaded with a fixed amount of bitcoin. The purpose of doing this is to ensure that the currency cannot be spent as long as the private key is hidden. To make this possible, they have been fixed with a tamper-evident seal. The latter is so far the best and safest way of storing and trading your bitcoins offline. To add on to the list bitcoins have recently become a prized collector’s item. However, the authorities later came to label this as counterfeit money even though its use was later approved.
3. Mobile wallet
A mobile wallet is an essential tool especially for those who trade them on a day to day basis. Mobile wallet gives you the opportunity to gain access to your funds and even transfer them to an app while at the same time storing your private keys. Despite their convenience in transactions, the mobile wallet is prone to hacking and fraud unlike the other forms of bitcoin wallet. If someone gains access to your mobile phone, they can gain full access to your bitcoin wallet.
However, every mobile wallet has been installed with different security measures. Some can be more prone to hacking than others. The only way to know which one is the best is to read through reviews of each one of the wallets.