Last updated on July 24th, 2016 at 04:35 pm
Looking to buy some Bitcoins? If so, you’re going to need a wallet to hold them in. So how does a Bitcoin Wallet work and where can you get one? There’s a lot to understand and you’ll have several options when choosing your wallet, but we will provide you with some insights and tips for selecting and using the right wallet.
Bitcoins use digital signatures, or readable strings of numbers and letters, to make payments. These digital signatures are called “public keys” or “addresses”. These addresses can then be transferred back and forth through the public ledger that tracks all exchanges (but protects your identity). In order to keep track of how many Bitcoins you have, you need a wallet, which is a program or online service that stores your coins.
There are numerous Bitcoin wallets available. In order to find a good wallet, you should head to the web and start searching. As Bitcoin is an all-digital currency, the Internet is absolutely essential. Some wallets are paid services that charge a fee for each transactions, while others are completely free, open source applications.
While there are far too many options to list them all in this article, we will go over two of the more popular programs and outline their strengths and weaknesses. This process should also help you learn what to look for when evaluating other wallets.
You can use paid Bitcoin programs like Coinbase. This platform is very easy to use and can be accessed through the Internet or your mobile device, such as a smartphone. You can also call in a payment by phone. With Coinbase, transactions occur within a matter of seconds. The system is highly secure, efficient, intuitive, and can be accessed from just about any type of internet enabled device. Still, while this system is very easy to use, it charges a 1 percent fee for each transaction.
Don’t want to pay fees? You can use BitCoin QT instead. This free, open source program does not charge any fees. You should be warned, however, that it can take up to a day to install, because it must verify the entire Bitcoin ledger, and is known for being cumbersome. Not only that, but transactions take a long time to verify. Further, you can only support one wallet at a time, and due to some features of the software, it is difficult to place Bitcoin QT on an encrypted hard drive. With Bitcoin QT you can add additional software, such as Armory, to add extra layers of cryptology but this can cost money.
Further, you should understand that open source programs have their upsides and downsides. All open source software is open to the public, meaning that people can take the code and develop software and new versions of software with it. Because open source software is readily available to the public, hackers can search through the code to try and find weaknesses to exploit. On the other hand, computer programmers and the community as a whole can search through the code and continue to strengthen it.
There are a few things you need to understand about your Bitcoin wallet. First off, you should always back up your wallet. Most programs allow you to back it up either through printing it out on a piece of paper, using a USB drive, or both. You should also try to encrypt your information and use other security measures to protect your wallet. Take a moment to search the internet and map out all of your options.
You also need to pick a very secure password. Don’t just go with the normal “Password11” or something that someone else will be able to crack. Remember, Bitcoin is a decentralized system and if someone should hijack your identity it can be difficult, if not impossible, to recover your data and money.
When choosing a program, you should take time to decide on your needs. If you can afford it, paid programs often offer a better experience than most of the open source software currently available on the market. Most likely, open source versions will improve over time and may eventually rival the premium aid programs. If you want to save on money, open source programs should fit your needs, just be prepared to spend time learning the system and all of its kinks!
Latest posts by Ofir Beigel (see all)
- “JPMorgan CEO Jamie Dimon says bitcoin is a ‘fraud’ that will eventually blow up” – CNBC | $4,367.12 - September 12, 2017
- How to Buy Bitcoins if You’re a Noob – Bitcoin Whiteboard Tuesday - September 12, 2017
- “Why China Crushed Bitcoin” – Forbes | $4,450.15 - September 9, 2017