A Bitcoin wallet at first glance may look complicated to a lot of people. In this article we dive into the bitcoin wallets and explain what it is.
Are you ready to join the world of Bitcoin and become a true crypto-treasure hunter? Then, you’ll need to get yourself a Bitcoin wallet!
Just like a regular wallet, you can store, view, send, and receive Bitcoins. But here’s the twist, unlike a regular wallet where you store cash, coins, or cards, Bitcoins aren’t physically stored in your wallet. Instead, your Bitcoin wallet holds your private key, the key that gives you access to your Bitcoins in the blockchain and the power to send them to other addresses.
And just like how a treasure map is your key to finding treasure, your private key is accessed through a 12-word code called a “seed phrase”. But beware, if you lose your device or forget your seed phrase, you’ll lose access to your Bitcoins forever. That’s why it’s important to write down your seed phrase and keep it in a safe place, or even better, turn it into a puzzle that only you can solve!
Pro Tip: Always back up your seed phrase immediately and never store it digitally or take a picture of it. Hackers are always on the lookout for seed phrases!
Are you ready to start your crypto-treasure hunting journey? Get yourself a Bitcoin wallet and let the adventure begin!
In short, Blockchain is the technology that records where every Bitcoin currently is. It is a growing distributed ledger (list of records), called blocks. These blocks are linked (chained) together and a new block containing transactions is added every 10 minutes. Hence the name Blockchain. In the case of Bitcoin, the ledger is shared and distributed between the miners so that no one can make fake changes in the blockchain.
Millions of miners worldwide are constantly confirming if the ledger is still correct and that makes the Bitcoin blockchain the least corruptible system on earth. To fake a transaction on the Bitcoin blockchain you would have to hack 51% off all miners worldwide, an almost impossible task as this would cost tens of billions of dollars and take many years to accomplish.
The best Bitcoin wallet does not exist. Every wallet has its benefits and drawbacks. What is the best wallet for you? That depends on what you value most from the wallet. Do you want ease of use? Or do you want to focus on maximum security?
An important distinction between Bitcoin wallets is where its private key is stored. The private key is a complex password you need to access your Bitcoins. So, whoever has this key has control over the Bitcoins. The private key is also used to generate a Bitcoin address.
With a Bitcoin address generated from your wallet you can receive Bitcoin on your wallet. Hierarchical Deterministic wallets generate an initial phrase also known as a seed. With the seed you can always reconstruct the privet key to access your Bitcoins. On most Bitcoin wallets, you can also see the current Bitcoin price and the value of your current holdings.
Further explanation about hardware wallets and the lighting network will follow in a later blog. And remember, back up you seed. Merry hodling and a happy new bull run!