How to Create a Bitcoin Wallet
What is a Bitcoin Wallet? A Bitcoin Wallet is the most important thing you need to use Bitcoins.
It is basically something like a bank account. It allows you to receive, store or send Bitcoins to others. A wallet is your personal connection to the Bitcoin network. Wallets contain private keys. These are secret codes with which you can access your coins.
In reality, it’s not the coins that need to be kept safe, but the private keys that give you access to your coins. You could also say that a Bitcoin Wallet is an app, website or device that manages your private keys for you. The following instructions will show you how to create a Bitcoin Wallet and how to select the best one.
A hardware wallet is a physical electronic device. It was developed exclusively for securing crypto coins. The Ledger Nano S is an example of a hardware wallet. It must be connected to your computer. Only then you can send your coins to other wallets. Hardware wallets are a good choice when it comes to secure and reliable Bitcoin storage. You keep your private keys separate from devices connected to the Internet. Your important private keys are securely created and stored offline.
The offline creation and storage of private keys with a hardware wallet ensures that criminal hackers have no way to steal your coins online. To get your coins, thieves would have to steal your hardware wallet. But even in such a case there are ways to protect yourself. Define a PIN code for your wallet. Don’t worry that your hardware wallet will be stolen, lost or damaged. If you create a secret backup code, you can always access your bitcoins.
Ledger – Market leader in the field of Hadware Wallets. This hardware wallet supports a large number of different crypto currencies and has many security features.
Create Hot Wallets
Hot Wallets are software wallets that run on Internet-enabled devices such as a computer or mobile phone. Because Hot Wallets create your private keys on an Internet-enabled device, these private keys cannot be considered 100% secure. But Hot Wallets also have advantages. They are the easiest way to store small amounts of Bitcoin. Sending and receiving payments is very easy and fast.
Electrum – is a popular software wallet. It has a very high level of security. The installation process is very simple. You will receive a twelve word phrase. These words allow you to restore your Bitcoins in case your computer should fail. Your wallet is also encrypted. This protects your coins from hackers.
Create Bitcoin Web Wallets
In order to create a Bitcoin Wallet with your computer, you do not necessarily have to install any software. Wallets are also offered on many websites and can be created there for free. All you need to do is create a user account and confirm your email address.
Web Wallets store your private keys online. You are given access through a password of your choice. Web Wallets offer the lowest level of security in comparison. However, they have the advantage that they can be accessed from any Internet-enabled device.
Coinbase – Create free online wallets for Bitcoin and various other coins. A web wallet with a simple design and many useful features. This makes Coinbase ideal for beginners. You can create a Bitcoin Wallet and buy the currency directly from Coinbase.
Which wallet is best for you?
Each wallet has advantages and disadvantages. Some wallets are specially designed for safety. Other wallets protect your privacy particularly well. So the best wallet for you depends on your own needs. Are you more of an investor and rarely send coins to other wallets? Then a hardware wallet will keep your Bitcoins safe.
If you send coins more often, a software wallet is better suited for you. The advantage of this is that software wallets are free of charge. However, if you do not have your own computer or want it to be as easy as possible, you should create a Bitcoin Web Wallet.
Frequently asked questions about Wallets
What are Bitcoin Wallets? | With a Bitcoin Wallet you can send, receive and store Bitcoin. You don’t have to send or receive a whole Bitcoin. You can also own a small part of a Bitcoin.
What is a Bitcoin address? | A Bitcoin address is like the account number of your bank account. It has 34 characters, consisting of numbers and letters. Each address starts with either a 1 or a 3. To avoid confusion, the characters “0, O, l” and “I” do not exist.
How do I get Bitcoins into my wallet? | Someone must send Bitcoin to your wallet address. So buy some Bitcoins first. You can use a Bitcoin exchange for this. Then have the Bitcoins paid out to your own wallet address.
What is two-factor authentication (2FA)? | This function is intended to increase security. It is often used by websites and is very useful. With 2FA you need a second means of confirmation when logging in. This proves that you are who you say you are. These are the most common options:
Google Authenticator – An app that resides on your mobile device. The app generates security codes that are only valid for a short time. During this period, the displayed code must be entered on the website. The first time you install it, you will receive a security code. You must keep this code. This code is used to restore your settings in case your phone gets lost.
SMS – These are codes that are sent to your phone by SMS.
Your bitcoins are only secure if your private key is securely created. It must remain secret and may only be controlled by you. Here are two examples where Bitcoin users have been cheated. Unfortunately, they did not follow the security tips. They left their Bitcoins in the care of a third party. In a hack on the Bitcoin exchange Bitfinex, users lost a total of 70 million dollars. The sinking of Mt Gox even led to losses of 450 million dollars.
Theft and fraud can be avoided. Just follow these rules. Create your private keys offline. Use Hot Wallets or Web Wallets only for small amounts. Make backup copies of your private keys. This way you avoid losses if your hard drive fails or your computer breaks down.
What is a Crypto-Wallet?
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