A Bitcoin wallet is a software tool that allows the user to communicate with the Bitcoin network to send or receive money in Bitcoins (BTC). The use of purses or wallets is considered essential to carry out transactions with cryptocurrencies since the public and private keys are stored there to manage these assets’ balances. Unlike a bank account, in a wallet, the user has direct and total control of their cryptocurrencies since they do not have to ask for permission or authorization from third parties for their use.

Types of wallets

Most of the wallets allow their users to generate public Bitcoin addresses; those addresses become reference points used in the blockchain network to maintain the accounting of the network. When a user decides to use a wallet, it is recommended that it protect the private keys associated with each public address generated by the wallet.

This type of wallet is called “non-custodial-wallets” (purses or wallets without custody), in this case, the user must keep in their possession a copy of the seed of their Bitcoin wallet (seed is a series of words that, when entered in the established order generates an address), from this “seed” the private keys of the wallet are generated, due to this, its receipt must be in a safe place since no one should know it other than its holder if someone else knows it, could have access to the Bitcoins that are stored there and the wallet. Among the most popular types of wallets are the following: exchanges, hardware wallets, online wallets, mobile wallet, printed wallet, among others.

Can you know the owner of a wallet?

If a holder of a Bitcoin wallet is careful when using it, it will be tough to trace the owner of that public address; however, if the owner reveals his identity, for example, a person who generates the content and receives donations on his website in the form of BTC, then it will be easy to identify the owner of a wallet.

Another case is that someone mobilizes his Bitcoin wallet from a service in which his personal data is registered. For example, when a person sends Bitcoins from his account on an Exchange. Another alternative is to make a purchase in an online store that accepts Bitcoins and where the personal data has been left. There are also mathematical techniques that analyze transactions on the blockchain, and that can be compared with the personal data that “big data” allows to store, with which some data could be obtained. However, they will never be 100% accurate.

Taking care of our digital assets

Although the Bitcoin network is designed to protect the holders of a wallet, certain actions (external to the system and the user’s own) can reveal a holder’s data. As we can see, privacy depends a lot on the wallet holder’s behavior; there will always be people and companies who will be more careful with their digital assets, while others will be more trusting and careless.

What do you think about this topic? What do you think about the security of personal data in Bitcoin wallets?

If you still do not have the Mercury Cash mobile application, we invite you to download it; since it is one of the best applications in the cryptocurrency market, you can access it at the following links: Android version (Google Play) and iOS version ( App Store).

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