The first step in creating a Bitcoin account is creating a Bitcoin wallet. Creating one can be easy using free Bitcoin wallets that are offered by several companies. The tricky part is learning how it works and how to secure your account. Read on to learn about the best Bitcoin wallet for beginners, how to get one, and more.
Learning the Basics About Bitcoin Wallet
In This Article:
- What Is A Bitcoin Wallet?
- Why Are Private Keys Important?
- How Do I Keep My Bitcoin Wallet Safe and Secured?
- Where Can I Find the Best Type of Bitcoin Wallet?
- When Is the Best Time to Have a Bitcoin Wallet?
- Who Can Access my Bitcoin Wallet?
What Is A Bitcoin Wallet?
A Bitcoin wallet lets you access your personal Bitcoin account. It is a tool that allows you to manage your account securely using different platforms, such as desktop, mobile, web, or hardware. Similar to an online bank account, every wallet has an address, and it is where you manage the sending and receiving of Bitcoins.
Why Are Private Keys Important?
There are two things needed to make transactions in the Bitcoin network: public keys and private keys. Public keys can be shared with others, while private keys are kept for personal use only. Like usernames and passwords, digital message signatures created with private keys secure your Bitcoin account to prevent theft and scams.
How Do I Keep My Bitcoin Wallet Safe and Secured?
For every Bitcoin user, securing your wallet should be a top priority, similar to how you protect your regular wallet. Since a Bitcoin wallet is accessible virtually, there are added complexities every time you access it online. To keep your wallet secure, you must always keep the following in mind:
- Generate your private keys only in a secured location
- Use a strong wallet password
- Create a multi-signature to prevent against theft
- Backup your private keys
- Be aware of the online services you are using
- Keep the control to yourself
- Encrypt your wallet and your backups to provide additional security
- Keep your software updated
Where Can I Find the Best Type of Bitcoin Wallet?
There are two main types of a Bitcoin wallet, namely hardware wallets and hot wallets. A hardware wallet is a small physical device built for securing the storage and managing your transactions online. Hot wallets, on the other hand, are accessible via internet-connected devices, such as mobile or desktop. Hardware wallets are geared towards security, while hot wallets are more for expediency of transactions. So, depending on your preference, you can choose which type of wallet you need from tons of Bitcoin wallets.
One of the most popular Hardware Wallet is the Trezor Hardware Wallet. It provides ultimate security, password management, and second-factor authentication. It is easy to use and works on Windows, OS X, and Linus.
Another widely-used hardware wallet is the Ledger Nano S. This cryptocurrency hardware wallet is developed to protect your confidential data. This device is not just limited to Bitcoin, but can also be used for Litecoin and Ethereum, which is convenient when managing several cryptocurrency accounts.
GreenAddress is one of the most-used hot wallets. It comes with two-factor authentication, requires a multi-signature for every transaction, and gives you full control over your transactions. Accessing your account during emergencies via public wifi is also secure with its unique watch-only feature. This feature lets you quickly check your balance or receive funds without full access to your wallet. Additionally, it does not need your private keys, so no transactions can be made and your settings cannot be modified while in this mode.
Another popular hot wallet is the Mycelium. Designed especially for more skilled Bitcoin users, Mycelium wallet gives access mainly to Android mobile users. What makes this one of the greatest wallets is its quality integration with a range of services, including the hardware wallets Trezor and Ledger.
When Is the Best Time to Have a Bitcoin Wallet?
Bitcoin is relatively new compared to other types of investment. Considering how volatile this market is, not everyone is willing to take the risk. However, if you ask the ones who invested early on, they’d convince you to invest your money in Bitcoin. Why? Because over the past few years, there are relatively high profits among smart investors who have seen its potential. The demand has played a significant role in these profits. If you are looking to invest your money in Bitcoin, make sure that you understand the possible risks of investing in both Bitcoin and cryptocurrencies as a whole.
Who Can Access my Bitcoin Wallet?
You have sole access to your own wallet, unless you establish a joint or shared Bitcoin account with a trusted partner. This kind of account works with a multi-signature wallet and set-up where both individuals have to sign if either of you wants to spend any Bitcoin out of the wallet.
Investing certainly requires time, effort, lots of discipline, and proper study. Investing in Bitcoin requires all of these, especially since it is still relatively new to the market. Take some time to understand how it works before you decide on investing your money so your resources won’t go to waste.
Do you think bitcoin wallet is a wise investment to add to your portfolio? Share your thoughts with us in the comments section below.