Cryptocurrency or bitcoin is a digital currency. It does not have any physical existence. A bitcoin wallet or account stores the private key required to access the bitcoin address. The bitcoin itself is not there in the account. This secret key allows you to access every bitcoin address of yours. This private key stored in the bitcoin account can be used to send, receive and buy bitcoins. The bitcoin is stored and maintained in a publicly available ledger called blockchain.
Types of accounts
There are several ways of setting up an account. To create an account it is necessary to understand the types of accounts available. The different types of accounts are discussed below:
- Paper bitcoin account is resistant to hacking. Some websites allow the users to create a random public address or private key which can be used immediately.
- Commonest is the online accounts which store the private key in a server. The advantage is that the account can be accessed 24×7 and from anywhere.
- Mobile-based accounts are apps that can be downloaded on your smartphone. The private key is stored using the app. This is a very convenient method and easy to use.
- A hardware-based account stores the private key in secure hardware. However, this is not a free account like the other. It needs to be purchased from a manufacturer.
To buy an account you need to keep in mind your purpose, budget and the level of security that you require. For beginners, an app-based account is the best while a pro can always go for hardware-based one.