What is an Online Coin Wallet?

What is an Online Coin Wallet?

What is an Online Coin Wallet?

In order to store cash safely, you’d deposit it in a bank. It’s pretty much the same for Bitcoin; in order to keep your bitcoins safe, you need an online coin wallet.

A bitcoin wallet is a software that can be stored on your computer or on a USB-drive. The software stores your private key and provides security whilst carrying out transactions on the internet.

If you’re new to the bitcoin world, you might want to get an online coin wallet, it’s pretty much the only way to receive the bitcoins that you buy on the internet.

You can either choose a third-party online coin wallet, which is a great option if you’d like to use your bitcoins to pay different merchants. Otherwise, there’s a few platforms that offer free wallet to every user that purchases bitcoin for the first time.

These wallets are great if you want to keep your bitcoins as an investment, which are stored on the website. And these wallets aren’t just for bitcoin, they can be used to store other cryptocurrencies as well; like Litecoin or Ethereum.

How does it work?

An Online Coin Wallet simply stores your bitcoins, but the technology and mathematics behind it is pretty impressive. In order to understand an online coin wallet, we can compare it to just regular email.

When you open a Gmail account, you receive an email address and a password. Similarly in bitcoin, you receive a Bitcoin address which everybody can see and send money to. You also receive the password, a private key.

When you want to send an email, you’ll log into the Gmail website. For bitcoin, you’d log into a Bitcoin Client. In order to log into it, you’ll use your Bitcoin address and your private key.

An Online Coin Wallet simply stores this information safely for you. Technically, if you were to memorize your Bitcoin address and Private Key, your brain would be a coin wallet.

An online coin wallet is usually connected to various blockchains, which lets you to send and receive payments, monitor your balance and buy bitcoins online. It’s as simple as that!

What can I do with an Online Coin Wallet?

Just like you receive emails on your Gmail account, Online Coin Wallets let users transfer money and monitor their balances. Usually an online wallet is connected to various blockchains, which make it easier for users to store several different cryptocurrency in one place.

Since Bitcoin has been gaining a lot of traction, companies such as Microsoft have started accepting Bitcoin payments for online gaming accessories and functionalities. This isn’t the only example, there’s Zynga gaming, Virgin Atlantic and the list is ever growing.

A few years ago, there was some interesting websites which started accepting bitcoin, such as pizzaforcoins.com. They’re a platform that allows people to pay in bitcoins, after which the company relays the information to Dominoes and the pizza is delivered. That’s how you might buy pizza in the future.

The functionalities that bitcoin offers companies is quite attractive and leads to a lot of saving in the long run. Since bitcoins gain value over time, companies’ assets in bitcoin will keep growing in the future.

That’s why the uses and functionalities of cryptocurrency are always growing, it has had significant impact in the banking and healthcare industry.

Which platforms offer free Online Coin Wallets?

Coinbase offers free Online Coin Wallets for all users. It’s the world’s most popular digital currency exchange, over $6 Billion worth of digital currencies have been exchanged on the platform. The exchange provides many advantages such as low fees, secure storage and faster transactions. You could use this wallet to buy or sell bitcoins and carry out transactions online.

LocalBitcoins also offers free Online Coin Wallets for all users. LocalBitcoins is one of the world’s most popular P2P Bitcoin exchange and marketplace, it’s used in over 250 countries by over 110,000 active merchants. It’s a global platform which is used by beginners who are getting introduced to bitcoin as well as professionals investing into Bitcoin.

These two platforms are pretty well known and can be the best wallet for beginners who are getting introduced to the bitcoin world. On these platforms, you can sign up, create a wallet and buy bitcoins instantly.

Are Online Coin Wallets safe?

Companies like Coinbase and LocalBitcoins make sure that their Online Coin Wallets are as secure as they can be. Since they’re online, you can access them from anywhere in the world; but what if it gets hacked?

You can be pretty sure a major hack can’t really happen because of the encryption technology that these platforms use. Your bitcoin address and private key are encrypted and then stored, to make sure that there’s very less chances of getting hacked.

Some websites go further and add layers of security to their wallets. For example, Blockchain.info is a popular online coin wallet which boasts its security standards.

Blockchain.info doesn’t store your bitcoin address and private key, it actually never receives them in their original form. Your browser encrypts the data before sending it to the server, which means no hacker can decrypt your information and steal your coins.

So you can be safe whilst using an Online Coin Wallet.

Which Online Coin Wallet should I get?

If you’re a beginner who wants to buy bitcoins as an investment, you should probably sign up to one of the two platforms above, Coinbase or LocalBitcoins. That’s because it’s much easier to buy bitcoins on those platforms if you have a local wallet. So you’ll be able to buy it from the platform and keep them on the online wallet till whenever you want. However, people have reported that these wallets have certain restrictions in terms of what websites you can pay on.

If you’re a beginner who wants to buy bitcoins to use them and carry out transactions online, it’s best to use a free online wallet such as Copay. It’s an online wallet that is pretty secure and has iOS and Android apps so that you can manage your wallet on the go. You can use Copay if you’d like to buy something online and the transaction speeds are faster compared to the online coin wallet that platforms offer.

If you’re looking for a very secure wallet, you can try Blockchain.info’s online coin wallet. It’s one of the most secure wallets available out there, and it’s free! I think this wallet is mostly great for storing bitcoins as an investment for the long term, with the benefit of added security. You can also buy bitcoins from their website, which is great for beginners as well as seasoned investors.

If you’re looking to store much higher funds in Bitcoins, you might want to look at Hardware Wallets. They’re more secure, they’re not connected to the internet and therefore there’s no ways to hack into it. It’s as secure as you can be. Here’s a comparison of some Hardware Wallets on the market today.

Now go get your Online Coin Wallet!

We hope that this guide has been informative and has been able to give you more information into the world of bitcoin. Understanding wallets and how they function is a crucial part of understanding how the industry works.

If you’re interested in investing in Bitcoin for short term profits, check out our guide to investing in Bitcoin on Plus500

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About Article Author

Michael Serrano
Michael Serrano

Michael is an engineer and a bitcoin evangelist. He has been involved in cryptocurrencies since 2013. His biggest wish? 1 billion users of bitcoin, ether and litecoin by 2020. In the last 10 years he has worked for various early-stage start-up as a back-end developer.

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