What is a Bit Wallet and How Does it Work?

A bit wallet is the Bitcoin equivalent of a bank account. It allows you to receive bitcoins, store then and to send them to others.

Bitcoin is an innovative payment method that allows users to complete financial transactions without revealing their identity or sensitive data.

It’s a form of digital currency that is created and held electronically. It can be used to buy things electronically and is decentralised, so no single institution controls the network.

As a form of digital currency, using Bitcoin offers faster transactions with anonymity and reduced costs. What makes Bitcoin quite popular is that bitcoins are faster and cheaper than other global transfer platforms. It allows fast peer-to-peer transactions and has low processing fees. Bitcoin can be stored offline and securely and it can be easily converted to other currencies. It can also be used for making global payments.

What is a bit wallet?

There are different types of bit wallets. Types of bit wallets include Software wallets, which you can install on your own computer or mobile device and web wallets, which are hosted by third party and are often much easier to use.

According to Luno, your Bitcoin wallet address is similar to a bank account number. By sharing your bit wallet address, other traders will be able to send you Bitcoin. This bit wallet address may also be represented as a QR code.

A bit wallet also stores a collection of Bitcoin private keys.

Typically a wallet is encrypted with a password or otherwise protected from unauthorised access and is controlled only by its owner.

Main categories of bit wallets:

  • Web wallets
  • Desktop wallets
  • Mobile wallets
  • Hardware wallets
  • Paper wallets
  • Brain wallets

Desktop wallets give users full control, while Mobile wallets were designed for a mobile device. Hardware wallets make it much more difficult for a malicious user to compromise.

 

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