Bitcoin exchange rates are frequently in flux, but a decentralised system to manage transactions ensures cryptocurrency as a trusted service. If you’re new to investing in cryptocurrency, you might be wondering what’s the fastest way to get into it and how to operate a Bitcoin wallet.
In this guide, we’ll cover the basics of how Bitcoin works and where to get an instant Bitcoin wallet to store cryptocurrency for later.
Basics – What Is a Bitcoin Wallet
A Bitcoinor another cryptocurrency, wallet works much like a safety deposit box. It securely stores your Bitcoin and allows you to transfer that cryptocurrency to an exchange (to withdraw fiat currency to use) or use it to pay for services.
While there are a few types of Bitcoin wallets, there are three main types to consider:
- Exchange wallets: You need an exchange wallet to obtain BTC in the first place. Exchanges allow you to connect your bank account and deposit and withdraw fiat currency. Exchange wallets aren’t private, and you don’t own the data in them.
- Hot wallets: These wallet types are always connected to the internet, and are most useful to conduct regular transactions in small cryptocurrency amounts. They have increased security compared to exchange wallets, but need a third-party client (like an ATM or an exchange wallet), to change the crypto into fiat currency.
- Cold wallets: The safest storage types: cold wallets store your coin offline. However, they need a third-party client to conduct crypto transactions, and some become less secure when used this way.
Getting an Instant Bitcoin Wallet
Depending on the type of investment and transactions you want to use, you’ll need different wallet types.
Opening an Exchange Wallet
Since you’ll invariably need an exchange wallet to obtain Bitcoin (other than using a Bitcoin ATM), the first step is to open an exchange account. Online crypto exchanges pop up regularly, so make sure to do research on which one can be trusted with your money.
Once you open an exchange account with an exchange service, you’ll receive an exchange wallet almost instantly, although you should keep in mind not to use this as long-term storage.
Since your new wallet is empty, one of the best ways to put some crypto in it is to exchange your fiat currency, and you’ll receive Bitcoin of the same value (once fees are deducted). You can then use the exchange wallet as an intermediary for private wallets.
Opening a Hot Wallet
Hot wallets come in few different types, but they share a principle. They are a part of a client that operates BTC transactions, and the wallet is (almost) always connected to the internet.
Opening a hot wallet is similar to signing up with an exchange service. While there might be a few more steps involved, you should be able to grab your wallet’s public and private keys within minutes of opening an account.
You should always research hot wallets, as, fraudulent ones frequently appear on app stores or as websites that imitate old, established wallets. Hot wallet services used by more people are more likely to be legitimate, and the oldest wallets that are still operating have gone through many changes and implemented strict security measures to protect your information.
Opening a Cold Wallet
Some types of cold wallets are hardware-based, such as USB devices, which need to be shipped by default and can’t really be obtained instantly. However, there is always an option to create an instant Bitcoin wallet in paper form:
- Navigate to a wallet generator. We’ll use BitAddress.org as an example.
- Save the URL in a bookmark. You can also download a ZIP of the generator to use instead.
- Disconnect your device from the internet.
- Open the saved URL or the generator’s file.
- Follow the instructions on the page. BitAddress introduces entropy into key creation via input from your mouse or keyboard.
- Once you reach 100%, you’ll receive the private key, public key, and a QR code corresponding to each.
- Choose the “Paper Wallet” option to display the data in a printable manner.
- (Optional) Add a password to protect the wallet further.
- Print out the wallet(s).
- Remove as much of the memory trail as possible before reconnecting the device to the internet again.
Paper wallets have a significant downside in that they are made of paper, and you can lose the wallet due to fire or water damage. Laminating it might help prolong its life span.
To use the paper wallet you’ve created, you’ll need a separate Bitcoin transaction client or a block explorer to check up on the wallet’s balance.
Using Bitcoin in an Instant
Once you’ve made your exchange and private wallets, you can move Bitcoin between them and use them as you please. Whatever option you choose, creating a new wallet can be easy, but always be careful to use trusted services, or your investment might fall into the wrong hands.
Author Bio: Hitesh is a digital marketing strategist and entrepreneur with more than 15 years of experience in digital marketing, start-ups, branding, and customer acquisition strategies. Hitesh is the CEO and Founder of Reposition Group, which specialises in digital growth strategies for companies in the cryptocurrency market such as Bitamp.com.