If the user wants to transact with Bitcoins, they need to install wallet software either on their mobile phone or computer, where they can control as an owner by having access to their key. When the wallet software is downloaded, it should sync with the Bitcoin network that uses blockchain and help execute the transactions quickly. The user should know about the public key for receiving bitcoins and their recipient’s public access for sending the Bitcoins. This article can read about Bitcoin wallets and how it has become an integral part of Bitcoin transactions.
What is Bitcoin Wallet?
Bitcoin wallet is also known as a cryptocurrency or virtual wallet, and it is often referred to as a tool used for storing bitcoins. The Bitcoin wallet has two keys, namely a private key and a public key, to receive and send Bitcoins. Bitcoin is one of the most popular digital currencies where it can neither be physically seen nor hoarded. The user needs to have a bitcoin wallet to store their bitcoins or other cryptocurrencies. The security of the wallet is based on the security of the computer where the software is installed. If the computer security is compromised, there is a risk for the private key that can be accessed or stolen by a third party.
Working of Bitcoin Wallet
Bitcoins and Bitcoin wallets are virtual, and when compared with physical wallets, they are intangible assets. The Bitcoin wallet helps in sending and receiving Bitcoins or other supported cryptocurrencies through blockchain transactions. As Bitcoins are virtual, the record of bitcoin transactions executed is stored in a public distributed ledger known as the blockchain. Further, the bitcoin wallet interacts with the blockchain to manage Bitcoins. To confirm that the user is the actual Bitcoin wallet owner, they need to enter their private key. In this way, they can transfer the Bitcoins to another person quickly; but this can be done only if the user knows the receiver’s public key.
How to Open a Bitcoin Wallet?
To find out which wallet is the best depends upon various factors like the buying needs of the user and how they would like to use their bitcoins. When the user buys Bitcoin, one of the easiest ways to manage the bitcoins is through an online wallet –
Here are the few steps to open a Bitcoin wallet –
- The user needs to go to Google play store or Apple app store and download Coinomi.
- Click the app and note the 24-words recovery phrase, which is the back up to the wallet.
- After adding a solid password, add bitcoins to the wallet.
- To receive the bitcoins, use the receiving address.
How to use a Bitcoin Wallet?
Here are a few steps about how to use a bitcoin wallet –
- The first step is to open an account and add a strong password. It is highly recommended that the user add an email address to the store solely for backup purposes.
- After having the bitcoin address, it can be used for receiving payments. For this purpose, the user needs to email their Bitcoin address to the sender and ask them to send the bitcoins directly to their bitcoin address.
- The user should know that the wallet typically contains several Bitcoin addresses. It is always good to generate new receiving addresses for every incoming transaction for anonymity.
- If the user wants to own more Bitcoins, they can proceed with purchasing Bitcoins directly.
How to Keep Your Bitcoin Wallet Secure?
There are two methods to keep the Bitcoin wallet secure.
- Offline hardware wallets can offer the users more security; they can be used as an alternative to online software-based wallets. Also, hardware wallets are known as cold wallets. These are physical, electronic devices that use RNG (random number generator) for generating private and public keys. These keys are stored within the device.
- Another popular and most secure way of storing cryptocurrencies is using paper wallets. Paper wallets are printed on a piece of paper; it is a software program that generates a set of private and public keys. These keys are printed on paper along with QR codes and stored offline. If the user loses the paper, consequently, they lose access to their wallet containing bitcoins.
Bitcoin wallets are a safe place to store digital currencies without any problems. Storing cryptocurrencies in a personal wallet guarantees that the user controls their private keys to secure their funds. Also, users can save funds in case the exchange is hacked. Even though buying Bitcoin is becoming accessible, storing those coins is a complicated process. Using wallets to store Bitcoins becomes a secure way to safeguard cryptocurrencies. Apart from you are more concerned about security and still want to make a good profit from Bitcoin then Bitcoin Pro is the perfect platform for you. Check Bitcoin Pro Reviews to get more details and know more about this amazing Bitcoin bot.