With all this bitcoin talk, we’ve barely discussed how or where you can store them. And despite having briefly reviewed the idea of storing Bitcoin, we’re not even sure about if we actually can do it!
Just like you normally would with cash, you can store Bitcoin in a virtual wallet. But unlike your physical wallet, this one comes with an address that shows up in a ledger search and is shareable, just so you can make transactions. While the address is similar to your public key, it is a shorter, usable version of it. This is quite obvious, but each of the alphanumeric characters is pivotal. So double-check before sending bitcoin to it.
While this is a key you can share with people, more private keys come attached to the wallet. What’s the difference? While the public key helps with transferring bitcoin to, the private key verifies your wallet and signs off on transactions. So what happens if you lose these keys? Some wallets, if not all, create a secure phrase or set of words that let you unlock your wallet. So make sure you keep this close to you!
And despite wallet apps being relatively safe, hardware wallets are the safest option. They’re offline and in a secure place. You will find special layers of security that make sure your bitcoin and keys are safe in the most popular hardware wallets. However, an online wallet can be the least secure option. Even though storing your bitcoin in exchange seems safe, the keys are held by a third party. But many find online wallets the easiest to set up and use, so you really have to pick between convenience and safety.
But you’ll find many serious investors using a hybrid approach. What does that entail? They utilize an offline “cold storage” to store a long-term amount of bitcoin. However, they store a spending balance on their mobile account.
You will find various types of bitcoin wallets that fit your bitcoin strategy or willingness to get technical like Cloud, Mobile, Hardware wallets and more. You can find out which wallet works best for you with Bitcoin.org and its helper.