Tag Archives: How-to

Get Familiar with Bitcoin Wallets

Bitcoin wallets are the key tool to start using the digital currency. Read this straight forward overview about (1) types of wallets, (2) best wallet services and (3) basic tips to better manage your wallet.

Bitcoin_wallet
Equipment for money transfer. Caricature by O. Schmerling in 1906.

> First of all, What is a Bitcoin Wallet?

A bitcoin wallet it’s like your physical wallet or your bank account (without all the paper work) but for the BTC network. It allows you to store, manage and control your transactions. Once created, the wallet generates two keys, one public, and one private. The public key or “address” is used to receive payments (or donations), and send payments. The private key (composed of fifty-one alphanumeric characters, starting with “5”)  guarantees that you have the right to use the bitcoins in that wallet. Important: never reveal this piece of data!

> Types of Bitcoin Wallets

There are two types: software and web wallets. Software wallets can be installed on your own computer or mobile device, providing you with a certain level of autonomy since you are the only responsible of keeping it safe. On the other hand, web wallets are hosted by a third party company. In this case you need to trust that they are doing their homework at keeping high security standards to protect users’ assets.

You can check Coinbase, Blockchain, Armory, Bitcoin-Qt and Electrum as good options in the market.

The tools mentioned above are supposed to provide a high level of security, which is recommended for investors adopting the usage of the digital currency. Learn how bitcoin transactions work (internal link) here!

> Recommendations for New Bitcoiners

Creating your first wallet is fairly easy and fast. Here are some key points that you should consider upfront:

1- Choose a password that contains letters, numbers, and symbols (#, %, $, @) to make it as strong as possible.

2- Don’t keep your private key and password data saved on any document on your computer, email client or web based third party apps you may use.

3- Web wallets are more vulnerable to attacks. We recommend a software wallet.

4- Create more than one address to manage your transactions and have specific purposes for each, say “Investments”, “Shopping”, “Savings”.

5- Learn more about how to generate a paper wallet to better protect your assets.

Maximiliano Garcia
Cryptor Trust Inc.