A Security Focused Outline on Bitcoin Wallets

The famous electronic peer-to-peer cash system called Bitcoin is an open-source protocol allowing individuals to store and transact units of the same named currency.
Private and public key cryptography plays a central role in this value transfer system, which implies the importance of professionally managing the information about such keys.

This work elaborates on the essential prerequisites to understand this relatively new technology that combines elements from the fields of computer science, cryptography, mathematics, and game theory.
In doing so, crucial general and Bitcoin-specific terms are defined and contextually explained.

The central part of this work addresses the outline of different Bitcoin interaction means, commonly known as wallets.
The structure of the presented wallet types orients itself alongside a potential user's experience.
Besides defining explanations and examples of use cases, this work outlines advantages and disadvantages concerning security and privacy.

The start concerns two wallets that target beginners in the field of Bitcoin.
The concept of online accounts is elaborated and attention is drawn to the inherent need to trust when using them.
Also, the relatively primitive type of paper wallets is surveyed.

For a more intermediate interaction with this peer-to-peer cash system, the concept of software wallets, in general, is explained and examples are provided.
The bridge from single-address paper wallets will be drawn to the more sophisticated multi-address wallets enabled through rooted key derivation techniques.
Designated computer devices that solely serve the purpose of managing keying material, known as hardware wallets, represent another intermediate wallet type discussed in this work.

Last, advanced topics are discussed that further leverage the security and privacy of someone's interaction with Bitcoin.
One concerns the setup of a self-managed Bitcoin full node.
This undertaking not only harmonies with the concept of verification over trust but also allows for the complete exclusion of any third party between wallet communication.
Equally advanced is the concept of multi-signature wallets, which is discussed at the end of this work.