Welcome to Brave New Coin’s Bitcoin 101. First-timers, we’d like to introduce you to the wonderful world of cryptocurrency; where payment is frictionless, free and instantaneous, and pizza could cost you $5 million dollars (more on that later). Sections 1-6 will cover the essential things you need to know about Bitcoin.
To our experienced readers, welcome back. Sections 7-10 contain some more advanced ideas and fun trivia. Read up, get to know Bitcoin better, and discover how cryptocurrency could change the world. Let’s get started.
How Do I Store Them?
Bitcoins are kept in a bitcoin wallet. This is where the “keys” which allow you to spend your bitcoin are stored, and since the security of your bitcoins is so important, these wallets must be strong enough to stop attackers. Many different types of wallet exist, each offer their advantages and disadvantages. Let’s take a look at the options:
Desktop wallets: The original bitcoin client, Bitcoin QT is an example of a desktop wallet. These wallets store private keys locally on your computer, and some, such as Armory and DarkWallet, offer additional features like improved security and anonymity.
Online Wallets: These wallets are web based, with your private keys stored online. These wallets allow users to access their bitcoin anywhere, however they entrust the wallet provider with the private keys, which can be risky. Coinbase, Xapo and Coinjar are reputable examples of online wallet providers.
Mobile Wallets: These wallet apps allow you to pay on the go with a smartphone or tablet. People can use their phone’s camera or NFC capabilities to pay in bitcoin, using QR codes or simply tapping a payment terminal. These wallets are often liked to an online wallet provider who create the mobile app as an extension of their online wallet.
Paper Wallets: The paper wallet offers one of the easiest, most secure storage methods for your bitcoin. When done properly, a paper wallet’s private key will only be accessible by taking physical possession of the wallet, nothing is left online. Store your bitcoins in safes and other secure locations, as long as no one steals your paper wallet, the bitcoins it can spend are safe.
Find the wallet that’s right for you: choose-your-wallet
Make Your Wallet Bulletproof
Here are some straightforward steps to make sure your bitcoin will survive anything. Regardless of whatever wallet you’re using, one of these steps can help you:
Back it up: If you lose a computer with a bitcoin wallet, those private keys, and the bitcoins they have access to, are lost forever. Avoid this by making a copy of your wallet and storing it safely somewhere else, so if something does happen, you still have access to your bitcoins.
Encrypt it: Using a strong password to encrypt your wallets data makes it much more difficult for attackers to gain access to a wallet.
Go Offline: This is known as “cold storage”, and is a very safe way to store bitcoins. A paper wallet is an example of a “cold wallet”. By having your bitcoin wallet’s private keys offline, hackers cannot access your wallet.
Always remember, a bitcoin wallet is only as safe as your cyber security. A perfectly managed wallet is useless on an unsecured device or computer.