A wallet consists of a private key and address.
- Bitcoin address:
To receive Bitcoins from someone you need to give them your Bitcoin address. It consists of 26 or 35 numbers and letters, beginning with
1, 3 or bc1.
- Private key:
absorb recall shoe rather hotel shiver despair opera road again swamp become
Think of it like a password your Bitcoin “account”. With the private key you can spend your coins and load your Bitcoin “account” to many different wallets. The private key usually consists of 12 random words. It is also referred to as the seed phrase. Keep it a secret!
How to create a Bitcoin wallet?
There are several ways that you can create a Bitcoin wallet:
- With mobile wallet app
- Using desktop wallet program
- Online cryptocurrency exchange
- Hardware device Most secure
They all have their pluses and minuses. For example, Bitcoin wallets created on the internet are not secure because the private key might be exposed to website owners, internet providers, malware and more.
However, if the Bitcoin wallet is created on a device not connected to the internet it is much more secure. Hardware wallets are such example. They are the most secure and recommended way to create and store your Bitcoin’s and other cryptocurrency.
How to set up
Best mobile wallets:
How to set up
- Install a Bitcoin wallet program from the list below
- The program can automatically generate a Bitcoin address, or you can use an existing Bitcoin wallet by importing your wallet password.
- The application is ready to send and receive Bitcoins.
Best desktop wallets:
- Bitcoin core (Bitcoin only)
The Bitcoin core is the full program that downloads the whole blockchain, currently around 250GB. It takes 1-2 days until the program is installed and ready to run. However, by using Bitcoin core, you increase the security of the whole Bitcoin network, making it harder for attackers to damage. Bitcoin core is not the easiest program to use, and it takes up a lot of space, but it is what makes Bitcoin very secure.
Armory is a simple-to-use application designed for more advanced users, having lots of security features. It supports only Bitcoin.
- Electrum (Bitcoin only)
Electrum for desktop is a very lightweight, fast, and secure wallet. You don’t have to download the whole Bitcoin blockchain, which is around 250GB, to start using it.
Cryptocurrency Exchange wallet
How to set up
- Register to a cryptocurrency exchange website.
- The site creates Bitcoin and other cryptocurrency wallets automatically.
- Provide identity verification documents like ID card or passport.
- You are ready to trade, send, and receive Bitcoin and other cryptocurrencies.
Best cryptocurrency exchanges:You can check out this review of the top 10 cryptocurrency exchanges.
How to set up
- Buy a hardware wallet from the list below.
- Follow the instructions to set up the device.
- Write down the password that the device generated for you and hide it in a safe place.
- The hardware wallet is ready to send and receive Bitcoin or other cryptocurrencies.
Best hardware wallets:
- Trezor is a beginner-friendly hardware wallet that supports 1000+ cryptocurrencies. It has a lot of safety features.
Costs between $70 and $170 depending on your local currency.
- Ledger wallets support 1000+ cryptocurrencies and they are the most popular hardware wallet. Excellent security.
Costs between $60 and $120, depending on the model.
- Coldcard is an ultra-secure hardware wallet. You can create a backup using a microSD card. It has a special chip to protect your private keys (wallet passwords).
A Coldcard hardware wallet costs $99.
- KeepKey is a simple-to-operate hardware wallet that requires you to confirm all transactions by using the nice OLED screen and button.
- BitBoxBitBox is a very small hardware wallet with many privacy and security features.
Costs between $50 and $100.
Using paper wallets, You could potentially lose bitcoins due to the change of address feature that a lot of bitcoin wallets support.
How to set up
- Generate Bitcoin wallet address using BitAddress.org
- Write down the private key and Bitcoin address on a piece of paper or print the QR codes. Do not share them!
- Hide the piece of paper in a safe place.
- You are ready to receive Bitcoins by sharing your Bitcoin address. If you want to spend them, download another type of Bitcoin wallet and import your paper wallet into the program/app by scanning the QR codes or entering the private key.
- Not recommended for beginners!
How secure is Bitcoin?
Guessing a Bitcoin private key is technically possible, but the odds are extremely low:
1 in 115,792,089,237,316,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000.
Bitcoin can be very safe if used correctly. However, you are responsible for security. No one will be able to give your money back if you lose it or have it stolen.
When your Bitcoins are in an exchange, you rely on their website security. There is also risk of governments banning crypto exchanges, or a bankruptcy, either of which might make you unable to use or retrieve your Bitcoins.
Can I send Bitcoins from one type of wallet to another?
Yes, you can send from your cryptocurrency exchange site to your mobile/desktop wallet, hardware wallet and the other way around. No problems.
Advice for more security
- Never share your private key. “Not your keys, not your Bitcoin”
- Don’t keep big part of your bitcoins in exchanges because they can be hacked or banned.
- Hardware wallets are the most secure way to store Bitcoins.
There are many different ways in which you can store your Bitcoins, but remember, if you don’t own your private key, you don’t own your Bitcoins. For example, cryptocurrency exchanges, like Coinbase, store your private keys on their side, and do not share them with you. Therefore, they own these Bitcoins, not you.
All types of Bitcoin and cryptocurrency wallets have their advantages and disadvantages. Some have higher security, such as hardware wallets, but it is more complicated to use them. Others have lower security, like cryptocurrency exchanges, but they are much easier to use. Choose the wallet or combination of wallets that best fits your needs.