Bitcoin storage is simple, but it also takes careful preparation and time to do so safely. If you want to know how to store bitcoin, the first thing you need to know is here – bitcoin is stored on the blockchain network of Bitcoin. To access and use one’s coins, a special application called a “wallet,” is necessary. If you want to learn not just how to store your bitcoin, but how to store it as safely as possible, you will understand how to store your bitcoin properly with the following details.
Why It Is Important?
The wallet protects the hidden code you need to use your Bitcoins, and as an internet banking account, it helps to handle transfers. The message, which acts as a password, is considered a “private key” and is important for the safety of your money. Bitcoins can be stolen by someone who has your private key. And if you miss the key, your Bitcoin is gone, too. So, it’s very important and essential to secure and back up private keys against accidental loss.
There is also another code named “public key,” which is the address where bitcoins can be sent to you from others.
Two types are categorized into all bitcoin wallets – hot and cold wallets.
The first type, online (‘hot’) wallets, where the private key is held online or on internet-linked devices, such as exchanges or other websites, laptops, tablets, or smartphones. For the second type, offline (“cold”) wallets, where the private key is held like a password-protected USB on paper or offline hardware, or actually in one’s brain (memorize a special phrase helps you to access your funds and it is important for the security of your funds)
Due to the possibility of hacking, online, or “hot,” wallets are less secure. Website wallets are extremely insecure when you have to show to a third party your private key. But for everyday use, hot wallets are more comfortable.
Therefore, it is recommended that all types of wallets be used: hot wallets to carry small quantities of bitcoin for regular transactions, and cold or offline wallets to store larger amounts. You should get as many wallet addresses as you want, in any case.
Bitcoin Wallet Categories
Furthermore, bitcoin wallets are classified into multiple categories, such as hardware, laptop, smartphone, online, and paper wallets, both hot and cold.
- Hardware wallets: Bitcoin wallets that hold private keys, such as encrypted USB sticks or on external computers. Hardware wallets by Trezor and Ledger are the most popular brands.
- Paper wallets: The word usually applies to your public and private keys in a hard copy or paper print. Here’s how one can be created.
- Desktop wallets: The software installed on computers or laptops is desktop wallets. Their security is dependent on your computer’s security.
- Mobile wallets: Mobile wallets are software wallets, like desktop wallets, but they are usually substantially smaller and simpler.
- Web wallets: Browser plugins, website wallets, exchange wallets, and other kinds of “hot” wallets include web wallets.
Now that you are familiar with all the various types of wallets and bitcoin storage methods, it is up to you to select the best method to secure your private keys.Share this article