Where to store bitcoins?
When using any type of Bitcoin Wallet, you actually do not store bitcoin itself. Because Bitcoin is not an object, it is a coded address in a blockchain. A wallet is a unique access key that unlocks a specific location of Bitcoin, and this is what you need to protect by storing it in your wallet. There are several options for storing your bitcoin, depending on the security and how regularly you plan to use it.
Where to store bitcoins?
There are several ways to store bitcoins:
- Exchange — if you are planning to trade bitcoin, the exchange will be a convenient way to store them, but do not forget that exchanges are prone to hacker attacks and it is recommended to distribute your cryptocurrency portfolio among several exchanges in order to reduce the risk of losing everything.
- Exchanger — a place where a buyer and a seller meet to buy bitcoin or sell it. It is also considered an unreliable storage place, since all exchangers are centralized and also susceptible to attacks by hackers, but in this case you will not have to pay a commission for withdrawing funds.
- The most reliable method of storing bitcoin is a wallet https://bitcoinofficial.org . There are many types of wallets, but more on that below.
How to choose a Bitcoin wallet?
Today, hardware wallets and official bitcoin wallet are the most reliable. Most hardware wallets look like USB sticks and plug into the computer’s USB port. You create a PIN code for subsequent access to your bitcoins, and save the so-called SEED, if you forget the PIN code, you enter SEED and restore access to the wallet. An additional advantage of a hardware wallet is the complete anonymity with which you can make transactions. Hardware wallets are resistant to malware, and if you lose your wallet, you can recover funds by purchasing a new hardware wallet and restoring data on it that was lost using SEED. Therefore, we recommend that you purchase 2 wallets at once. One to access the second to recover in case of loss of the first.
There are many reliable hardware wallets for under $ 100. We recommend Trezor or Ledger Nano S. They need to be ordered only on official sites, do not buy used devices.
A paper wallet is also considered safe for storing Bitcoin but less convenient. Using it requires a slightly deeper understanding of how cryptocurrencies work. Create a paper wallet online using any special program, for example: WalletGenerator.net. You don’t need to be a programmer, the program will generate a sequence of characters and display 2 QR codes with private and public keys. You will need to print these keys on the printer for subsequent access to the wallet.
Most users choose a software or mobile wallet for bitcoin.
Installing a wallet directly on your computer or phone gives you security that you control with your keys. Most of them have a relatively light configuration. The disadvantage is that they require more maintenance in the form of backups. If your computer or phone is stolen or damaged, and your private keys are not stored elsewhere, you will lose bitcoins.
They also require great precautions. If your computer or phone is hacked and the thief gets access to your wallet or private keys, he will also receive your bitcoin.
The original software wallet is the Bitcoin Core protocol, which runs the Bitcoin network. You can download it (this does not mean that you must become a fully functional node), but you will also need to download the book of all transactions from the very beginning of the time of bitcoin (2009). As you can guess, this takes up a lot of memory — at the time of writing, more than 145 GB.
Most of the wallets used today are “light” or SPV (simplified payment), which do not download the entire book, but synchronize with the real one. Electrum is the well-known SPV desktop bitcoin wallet that also offers “cold storage” (a fully standalone option for added security). Exodus can track multiple assets with a sophisticated user interface. Some (for example, Jaxx) are considered multi-currency wallets and you can store a large number of different cryptocurrencies on them, and some (for example, BitPay) offer the ability to use shared accounts. The best wallet in our opinion is an online bitcoin wallet https://bitcoinofficial.org