Topic: What are the differences between these wallets? (Read 355 times)

Everything the OP needs is quoted here. Thank you tranthidung for the work searching it and summarizing it here.

IMO, Electrum is the wallet to start with, while you think about purchasing a hardware wallet, but there are other good alternatives too if it was not enough.

Most of your comments are on point which deserved a merit, I'd just want to point out the correct terms here.

Electrum's default wallet types connect to the internet so it should be called "Hot Wallet" instead of online wallet.
"Online wallets" are mostly accessed though websites or even mobile apps connected to it, the core difference is the wallet file is saved online into the wallet provider's server.
For example: Blockchain(dot)com save their clients' "wallet.aes.json" in their server while Electrum saved the wallet files locally in the user's PC.

You can learn first before investing or invest while learning especially if what you're investing in is Bitcoin. Investing in Bitcoin is so simple that you don't need someone's to walk you through everything, all you need is where to get the Bitcoin, where to store them and  if you didn't use the right wallet in the beginning, you can always adjust to a more secured wallets as you gained knowledge on wallets. Nobody actually knew everything about bitcoin before they made their first investment. OP can learn gradually as he has registered on the forum and all the information are present here also when you don't find them through searching, OP you're free to asked questions as you did and good samaritans that are numerous on the forum will always help you out.


The meaning are directly in the names, (example, offline means offline and online means active on the internet). Seeing the posts above me have done justice to your questions I won't bother going into much details but just give you the simplest advice. No wallet is safe from hackers as it all depends on how secure you're because using a hardware wallets and still been careless with your private information can put your coins in the wallet at risk and the same goes for every other wallets. As you're a newbie I'll recommend you start with using Electrum Bitcoin Wallet, it ticks every box of been a perfect Bitcoin wallet except the fact that it isn't a hardware wallet but that's find.

Someone struggling to learn the basics of wallets will definitely be swallowed by the encyclopedia of Ratimov. What Op needs to do is to take a step at a time. Also they need to have a track of what they have learn and what they have to learn. Whenever newbies claim they have invested, you do not have any evidence or any reason to prove them wrong. So, we believe they have invested and learnt the basics of investment. So many of the newbies make hasty investment, but it pays to learn before investing to earn.

OP, how long have you been studying the forum? In your earlier posts, you wrote that you had already invested in Bitcoin and managed to lose part of it. If you don't understand the difference between wallets, why make quick decisions? It may be better to create a discussion with specific questions about what you have done before and what went wrong.
In addition, there is a good encyclopedia topic on the forum, which can be your help center.

https://bitcointalksearch.org/topic/--5277049

Well that's also true, as I also tried a offline key generator but from what I meant to say is, a wallet which is offline it means it is not connected to internet and opposite in online but I think I was at wrong and your statements makes more sense then I am agreed with you and thanks for the correction.

Have you mixed things up here? Well, Trust wallet is closed source and electrum is open source, not the other way round!
You should stop giving advice to users here, especially newcomers who are looking for the best sort of advice, that you were hacked doesn't mean every other newbie should experience that fate. OP don't keep any of your funds in a centralized exchange, be it binance or coinbase, neither of them is safe/trusted to store your funds for you, always use reputable non-custodial wallets to hodl your funds.
You've go it wrong here, online wallets are wallets that are connected to the internet, it doesn't mean you won't have access to your private keys, electrum is an online wallet, but you have access to your private keys when you use it.

Open and close source as you have been told already means if their source code is made available for the public it's open source while if the source code is not available, it's closee source.

Open Source Hardware Wallets

https://bitcointalksearch.org/topic/list-open-source-hardware-wallets-5288971

Online wallet are the least you could use or get as a recommendation for use because they are not safe for your advantage, you will not have access to the private keys because they are connected to the internet and mostly are mobile wallets, some some exchanges also have this kinds and any wallet that will not give you access to your private keys is a custodial wallet, no. Custodial wallets are best, such as you get with cold storage wallet like hardware wallets, you can also use a decentralized wallet like electrum or run of bitcoincore software for privacy. [/list]

You could easily find the definitions of these wallets, but if you are looking for a more easy way to understand them, then I would suggest you search for them and use them, which you could do for free. For example, to understand the concepts of open source and closed source wallets, you must know that open source means that it is open to everyone. It does not mean that everyone could use it; instead, everyone could see the code used to make it. While the opposite is true in close source, no one will suggest you use a close source wallet as it might contain flaws or codes that might be faulty.

Software and hardware Wallets are so easy to understand, which means that just like the simple difference between hardware and software, the same difference goes for wallets. There are many wallets, which are physical devices specially made to store assets. And the best way to store assets is with hardware wallets, which are open source.

Online are the ones that are active all the time on the internet, while offline are the opposite of online. There are more to wallets than you might expect. Which are custodial and non-custodial wallets and hot and cold wallets. So learn about them too. Learning such things will help you understand why people used to say ""Not your key, not your coin.

Being online or offline has nothing to do with how much you run your wallet.
A wallet is offline if your keys are generated and kept offline. Even if your hardware wallet is always connected to your computer and it's always running, your wallet is still offline. In the case you use electrum to generate a wallet on an online device, it can't be considered as a cold wallet even if you delete your wallet immediately and never use it again.

Open Wallet:
The wallet that is open source means the code of the wallet is open to the public. This wallet is known as an open source wallet. Any developer or person could observe the code and analyse it for any backdoors or observations. Open wallets are the most preferred wallets to use, such as the Electrum wallet.
Close Wallet:
The fact that the wallet is not open to observe and analyze the code means we do not have any access to the underlying code of the wallet, so we do not know if they are keeping track of our assets, keys, data, etc. These wallets are not preferred, as they could have accessed our wallet without our knowledge. An example is Trust Wallet.

Software and hardware wallets:
Software are the ones like Trust Wallet and Electrum Wallet, which act as software and could be used as programmes on your mobile or PC. Hardware wallets are most preferred for holding purposes or if the amount is huge.

Online and offline wallets (cold or hot wallets):
These terms are almost the same and could be used interchangeably. Let's say you are using a software wallet; thus, that wallet is also known as an online wallet and a hot wallet too. But if you are using a wallet like a hardware wallet, then you could call that wallet a cold wallet or offline wallet because it will not be running all the time, whereas Trust wallet will run as long as your phone or any other device is online. I hope you understand the meaning of all of them.

I also suggest that you also read https://glacierprotocol.org/ for a step-by-step guide to creating an offline wallet/cold wallet. It is considered one of the most complete guides on this argument, it deserves a look!

If you are a newbie, you don't need to know everything immediately. When i started, i was hacked, as many others.
Maybe it's not the best way but if you have under 1000$ in any crypto, i'd say to keep or buy them on binance/coinbase.
Why? Because those 2 are the most trusted, just turn on every 2FA they have and don't brag about it.

If you want more advanced security, find some tutorial how to make wallet safely, there are a lot of walkthroughs to do it.
I think other members explained everything so you should be good.

You have tried to explain what the differences are and I like how you explained it, but know that hardware wallets may not look like flashdrive, the only hardware wallet that I know that looks like flashdrive is Ledger Nano (S, X and S Plus) which is not a good hardware wallet. The new Ledger which is called Ledger Stax is not even looking like flashdrive. Trezor is not looking like a flashdrive. Passport and other hardware wallets that I know are not looking like a flashdrive.

A good question and I think everyone should know this to choose a perfect wallet and many new users mic up with these.

Open source wallets are some wallets which is the most secured online wallets than close source wallets because in open source Wallets everyone can see the source codes and modify it. But for close source wallets source codes aren't visible to all and you have to trust the developers blindly. So obviously you will prefer open source Wallets that close source wallets.

Some open source Wallets are Electrum ,Mycelium, Blue Wallet etc. Electrum is my choice and it's the most popular too.

Another question is Online wallets and offline wallets which are similar to software wallets and Hardware wallets. When you are using your internet connection to use it and another one is offline wallet which means hardware wallet where you have no need of internet. Obviously Hardware wallets are the safest crypto wallet and they are pretty expensive too. If someone is holding a huge amount of Bitcoin he must use Hardware Wallets which will ensure the best security of his funds.

In general, and because I love the watched content, and I think it is faster in delivering information to beginners, I advise you to watch the videos on Andreas M. Antonopoulos' YouTube channe^[1]l, as it is free and contains technical information in a simplified manner.

The difference between these wallets is simple. The wallet^[2] is a software that manages the private key. If the code of this software is open to all and can be reviewed, then it is open source, otherwise it is closed source. If the private key is generated in a separate environment and with secure elements, then it is a hardware wallet. If the private keys are located on a device connected to the Internet,  it is an online wallet

[1] https://www.youtube.com/channel/UCJWCJCWOxBYSi5DhCieLOLQ
[2] https://en.wikipedia.org/wiki/Cryptocurrency_wallet

they don't need explanation as they are what they are.

open wallet means if they are opensource which means the codes are open for everyone to see.
close wallet means, its not open for everyone to check whether there is a back door to it.

the rest of the wallet means it is what it is.

Open source wallets made their codes available for every developer to see while closed source wallets don't share their codes with outside developers to make changes or read. Trust wallet is open source and Electrum closed source.

Hardware wallets like Trezor store bitcoin on hardwares and can be accessible when inserted on a computer port. Software wallets can as well be application wallets downloaded on a system.

You don't have to go too far from Beginners & Help board, at top you have a sticky thread: Bitcoin wallets - Which, What and Why?

In short, you should use an open source, non custodial wallets. If you can not buy a hardware wallet, you can use free wallet software (should be open source, non custodial wallet) and set up your cold wallet or multisig wallet. Like you can do it with Electrum wallet.

• [GUIDE] How to Safely Download and Verify Electrum
• Cold storage / multisig wallets
  
  • Creating a cold storage wallet in Electrum
  • Creating a multisig wallet
• [LIST] Open source hardware wallets

Reminder: do not keep your money in online accounts

Aside learnmeabitcoin you can also read through this mastering bitcoin book


Open source wallets are wallets that there source code which they are built from are open to the public and also open to modify by developers, this way you know exactly everything about the wallet and also any future modifications. Closed source are those that hidden from the public and should any modifications are done you wouldn’t know, so that is why open source wallets like Electrum are mostly adviced to use and closed source like Trustwallet are adviced against

Hardware are physical wallets that are used to store bitcoin seeds and keys, they look just like your USB drive example is trezo wallet  while the software wallets just like the software name it’s self are wallets that are installed on computer and mobile devices, they also have there own private keys example is the electrum, BlueWallet and also trustwallet.

Online wallet are wallets that are connected to internet or on device that are connected to internet a clear example is the software wallet above. Offline wallet are wallets that off the internet and are on device that are not connected to it, they only come online just to sign or send a transaction.

The best wallet to use is an hardware wallet that is open source or an online wallet like electrum but airgapped

I was able to go through few books about bitcoin, articles and links sent here as guide in the forum. One of the best, I have come across is learnmeabitcoin.com. I don’t know if there is any easier one to learn from and understand than this. After all this, I am still yet to understand the concept of open/closed wallet, software/hardware wallet, online/offline wallet. I keep getting them mixed up whenever I try to have a grasp of them.