Whether you’re new to Bitcoin or just want to brush up on your knowledge, it all starts with a wallet. Without a Bitcoin wallet, there’s nowhere for you to keep your cryptocurrency.
In this guide, we’ll walk you through…
- What a Bitcoin wallet is and how it works.
- The different types of wallets you can use.
- What cold storage is and how it works.
- What multi-signature means and how it works.
- Where you can find the safest and most convenient Bitcoin wallet.
If you’d rather skip the intro and learn more about the best solution, then check out NordikCoin right now and find out how you can get a safe Bitcoin wallet and start trading in minutes.
What Is A Bitcoin Wallet?
A Bitcoin wallet is simply a place where you can store your Bitcoins. It’s made up of multiple public and private keys that are used to conduct transactions and access your money.
A public key is also known as a Bitcoin address, and it works like a bank account number and sort code for your wallet. People can use your public key to send you Bitcoins.
A private key is what you use to access your funds. It works like the PIN number for your bank account. Only you should have access to it, otherwise, you could lose your Bitcoins.
Since a Bitcoin wallet is simply strings of code, it comes in many shapes and sizes:
- Desktop wallets.
- Hardware wallets.
- Mobile wallets.
- Online wallets.
- Paper wallets.
- Steel wallets.
What Are the Different Types of Bitcoin Wallets?
There are many kinds of Bitcoin wallets and many brands that make them. Not all of them are equally safe, but the safest wallets typically come at the price of convenience.
It’s also worth noting that not all wallets support every type of cryptocurrency. Most wallets support Bitcoin, but it’s a good idea to shop around if you need to store other coins and tokens.
A desktop wallet is an app you can install and access on your desktop (or laptop) computer. You can use it to send and receive Bitcoin and can require different levels of passwords and security.
Here are some of the most popular desktop wallets:
A desktop wallet is one of the safer options when it comes to Bitcoin wallets since you can disconnect your computer from the Internet.
A hardware wallet is a real, physical device you can use to store your private keys. Many of them come with their own software and use two-factor authentication to protect your Bitcoins.
Here are some of the biggest hardware wallet brands:
Hardware wallets are often touted as the most secure way to store your Bitcoin because they’re not connected to the Internet.
An online wallet is any Bitcoin wallet that you can access via a web browser. Although some websites offer online Bitcoin storage, there’s rarely a need to use such third-party providers.
You’ll automatically be assigned an online wallet when you create a trading account on a cryptocurrency exchange or when you sign up for a Bitcoin debit card.
Online wallets are easy to set up and access, but they’re also the biggest security risk. That’s why many exchanges have been hacked and traders have lost their Bitcoin.
NordikCoin is one of the few Bitcoin exchanges that use a multi-signature cold storage system to keep your Bitcoin safe. That way, you can enjoy the convenience of an online wallet with the added security of a hardware wallet.
A mobile wallet is an app you can download to your phone or tablet. They’re pretty similar to desktop wallets, except they’re not as secure because smart devices usually are online.
Here are some popular mobile wallets to check out:
You can easily find a mobile Bitcoin wallet by searching for “Bitcoin wallet” on the App Store or Google Play.
Paper and Steel Wallets
Finally, it’s possible to keep your Bitcoins safe… on a piece of paper. You can write down your private key on a piece of paper and keep it safe there. Alternatively, you can use a service like BitAddress to generate a private key and print out as many copies as you want.
The problem with paper wallets is that paper can wear, tear, get wet or burn up.
That’s why steel and titanium wallets are becoming popular. With these wallets, your private keys are either etched, engraved, or hammered into a virtually indestructible material. Not only can they withstand the heat if your house burns down, but they’re also water- and corrosion-proof.
What Is the Best Bitcoin Wallet?
That depends on your individual needs. If you value convenience, then you should use an online or mobile wallet, since they’re easy to access and use to send and receive Bitcoins.
However, any wallet that is connected to the Internet is susceptible to attacks. If you’re very concerned about security, then your best bet is a hardware or steel wallet.
Fortunately, there is a third way.
NordikCoin is a Bitcoin exchange that combines convenience and security. When you use our exchange, you enjoy the benefits of an online wallet, which means you can access your funds quickly and easily. But you’re also protected by our multi-signature cold storage solution so hackers can’t get to your Bitcoin.
What Is Cold Storage?
Wallets that are connected to the Internet are usually referred to as “hot wallets,” because you’re able to send and receive funds instantly.
Cold storage is the practice of disconnecting your wallet from the Internet, which typically means the private keys to your Bitcoins are stored on a hardware device or physical objects like paper or steel.
Cold storage solutions are therefore the safest way to store your Bitcoins, which is why we’ve opted for that system at NordikCoin.
What Is A Multi-Signature System?
Cold storage solutions can still be accessed by third parties if they have the key, which is why it’s good to add a multi-signature system as an extra layer of protection.
So how does that work?
Imagine that you have three keys for your wallet instead of just one. You need two of the keys to access the Bitcoins in your wallet. One key is stored in your smartphone, another key is stored in your safe at home, and the third key is with your multi-signature provider.
When you head down to the store to make a purchase, you use the key on your phone by typing in your password. A message is sent to the multi-signature provider, who then checks that the password is correct, your location makes sense, and that it seems like a legitimate transaction.
In a way, it works similarly to when credit card companies verify transactions.
We use a multi-signature system along with cold storage to protect the Bitcoin you store with us at NordikCoin. That way, you’re sure that nothing can happen to your hard-earned cash.
Ready to Create A Bitcoin Wallet?
As you can see, the options are many when it comes to creating a Bitcoin wallet. We hope that you know have a better understanding of how it works and which option is the right one for you.
Here’s a quick recap of what we’ve covered:
- Bitcoins wallets consist of public and private keys.
- Public keys are used to receive Bitcoins.
- Private keys are used to send and spend Bitcoin.
- Desktop, online, and mobile wallets are convenient but less secure.
- Cold storage and multi-signature systems are the safest options.
- NordikCoin combines the convenience of online wallets with the security of cold storage and multi-signature systems.
If you can’t wait to get started with buying and selling Bitcoin, then head over to NordikCoin now and create an account in less than five minutes. Once you’re all set up, it’s just a matter of seconds before your first Bitcoins are in your secure wallet.