Want to know how to store Bitcoin?
Bitcoins are stored on the blockchain network. However, you need a wallet to have access to and use the coin. This guide will show you how you can store Bitcoin as securely as possible.
What is a Bitcoin Wallet?
A Bitcoin wallet secures the secret code that you need to have access to your Bitcoins. It manages transactions. The code is referred to as a ‘private key.’ It serves as a password and it is important for securing your money. If you lose your key, there’s no way you can retrieve your Bitcoin. So, it is very important to protect your private keys from loss by backing them up.
We also have another key called a ‘public key;’ this is the address that others can send you Bitcoins.
Read Also: The Easy 3-Step Bitcoin Buying Guide
Types of Bitcoin Wallets
Bitcoin wallets are divided into hot and cold wallets.
These are also known as online wallets. They are wallets where the private key is stored either online or on devices that are connected to the internet. Examples include exchanges or other sites, tablets, computers, or smartphones.
These are also known as offline wallets. In this case, the private key is stored either on paper or on offline hardware such as password-protected USB, or in one’s brain (i.e. you memorize a phrase to have access to your Bitcoin).
Hot wallets are less secure than cold wallets because they are prone to be hacked. Websites are vulnerable because you need to reveal your private key to a third party.
However, hot wallets are very convenient for day-to-day use.
It is recommended to use both types of wallets. You can use hot wallets to store small amounts of Bitcoin for daily use, and cold wallets for storing huge amounts of Bitcoin.
In addition, hot and cold Bitcoin wallets are categorized into hardware, desktop, web, mobile, and paper wallets.
They are external devices, like encrypted USB sticks. The commonest brands of these wallets are made by Ledger and Trezor.
These are physical copies or paper prints of your private and public keys. Here’s a guide by Cryptonews on how you can generate a paper wallet.
These are software installed on laptops or computers. The security of these wallets depends on how secure your laptop or computer is.
Just like desktop wallets, mobile wallets are also software wallets but they are smaller and simpler.
These include browser plugins, exchange wallets, website wallets, and other forms of hot wallets.
It is easy to store Bitcoin but you need to plan and must take your time to do so securely. You need to find the best combination of storage for your coins. If you intend to use Bitcoin every day, you may need to opt for a mobile or web wallet because these are convenient. If you have a huge amount of Bitcoin for long-term storage, you should use a cold wallet to store them.
Now that you understand how to store Bitcoin and the different types of wallet options, it is left to you to choose the method that is ideal for protecting your private keys.
Read Also: Simple Ways To Buy and Invest in Bitcoin