What is a bitcoin wallet?
A bitcoin wallet is software or a hardware device that allows you to manage your bitcoin. It creates and stores your bitcoin address, which you can use to send and receive bitcoin. You can think of a bitcoin wallet as a bank account. It does not store bitcoins themselves, but the keys that grant access to them. In a bitcoin wallet, there are two types of keys:
- Public key: The public key is used as your bitcoin adress, similar to an email address, and is used to receive bitcoin. You can share this with people without risk.
- Private key: The key you use to prove ownership of your bitcoin. This key must be kept secret.
Different types of bitcoin wallets
There are several types of bitcoin wallets. Your choice should be based on your specific needs regarding security and user-friendliness. Below you can see the most common types:
- Hardware wallets: Physical devices that store your private keys offline. This is the most secure option. An example of such is Trezor, a popular hardware wallet that offers high security.
- Mobile and web wallets: Web- or mobile-based services where security is managed by a company. They are easy and quick to use. You don't risk losing your private keys, but it requires you to trust the company handling your keys. These are suitable for smaller and daily transactions. An example of a mobile wallet is Wallet of Satoshi.
- Hybrid wallets: Combines local and cloud storage. The keys are encrypted first so that no one else can access them. This is a good compromise if you want access to your bitcoin everywhere without giving up all security to a company. An example of a hybrid wallet is Exodus Wallet.
How to get a bitcoin wallet?
Opening a bitcoin wallet is a simple process and can be done in just a few minutes.
- Choose a type of bitcoin wallet: Based on the options outlined above, choose the wallet that suits you best.
- Download or order the wallet: Depending on the wallet you've chosen, you'll need to either download or order it. Follow the instructions provided for obtaining the wallet.
- Create a new wallet: You will receive a private key or master key, called a "seed phrase." Write this down and store it in a safe place.
- Backup: If you are using a mobile wallet, back it up to prevent loss in case of technical issues.
Our advice when choosing your bitcoin wallet
At BTCX, we want you to make an informed and secure choice when getting a bitcoin wallet. Here are our best tips:
- Prioritize your security: If you have bitcoin, it is more important to choose a secure wallet than one that is easy to use. Hardware wallets such as Trezor are the most secure options.
- Always backup your private key: No matter which wallet you use, always backup your private keys. If you lose the information in your private keys, you cannot recover your bitcoin.
- Avoid cloud and exchange wallets: Cloud and exchange wallets are more vulnerable to hacking and breaches. If you plan to trade larger amounts, choose another option to maximize the security around your private keys.