What Is A Bitcoin Wallet And How Do You Use It?

What Is A Bitcoin Wallet?

A bitcoin wallet is a online or offline way of storing your bitcoin. Anybody who wishes to own bitcoin first needs to have a bitcoin wallet.

A bitcoin wallet is very similar an online account you may have at your local bank. What makes a bitcoin wallet unique is that it holds and tracks your available bitcoins through a system call blockchain technology.

What Is An Online Wallet?

An online wallet (which is also called a hot wallet) is an online storage for your bitcoin that is being hosted online with a bitcoin exchange like Coinbase or others.

What is An Offline Wallet?

An offline wallet or “cold storage” for your bitcoin is by far the safest way to store your crypto. Similar to a flash drive, a cold storage wallet creates an encrypted way to store your bitcoin offline and away from hackers.

When first getting started with bitcoin, it is natural to want to use the online wallet provided by the bitcoin exchange service you are using. This ok to start, but it is very important for you to consider offline storage of your bitcoin as well.

What Makes A Bitcoin Wallet Secure?

There a few key characteristics that make bitcoin wallet secure and somewhat anonymous. The first is the blockchain technology and the security, encryption and redundancy it provides. The next is the unique 13 digit wallet address that correspond to very specific part of your wallet. Usually you have one string of digits for your incoming deposits while having another one associated with your withdrawals.

Each code directly connected to you while also allowing your transactions to remain anonymous to anyone monitoring the network.

How Do You Use Your Bitcoin Wallet?

You use your bitcoin wallet the exact same way you would use any account you use to store your funds and investments. Because bitcoin is considered a decentralized currency for peer to peer transactions. No one can tell you how to spend your bitcoin.

Bitcoin wallets can be used to store purchased and accumulated bitcoins for use wherever bitcoin is accepted. A bitcoin wallet can also be used to store funds for other crypto currency investments.

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