How To Store Bitcoins
While it is important to understand what is Bitcoin, it is also essential to know how to store bitcoins. Having a Bitcoin wallet is the only way of storing your stash of bitcoins. They keep the private keys needed for you to access your Bitcoin address and to use your funds. There are various types of wallets designed for different types of device, so don’t rush into selecting one and not know about the other types. You have to consider some factors in choosing which wallet best fits you.
If you have installed the original Bitcoin client, then you already have a Desktop wallet and you have no clue you already know how to store bitcoins. It processes all blockchain network transactions such as Bitcoin addresses for sending and receiving the virtual currency and to keep the private key for it. The most basic one is the core wallet. There are a lot of other desktop wallets and they are linked to one exchange or the other. There are different desktop wallets having distinct features. Multibit runs on Windows, Mac OSX and Linux. Hive is an OX-based wallet which has its own app store that directly connects to Bitcoin’s services. Desktop wallets like Armory, which uses a lightweight browser plug-in to provide services preventing people from being able to track them, are made for enhanced security. Other wallets like DarkWallet focus on anonymity.
Desktop wallets are a good choice of how to store bitcoins, but what if you have to pay in Bitcoin at a physical store? In cases like that, mobile wallets come in handy. It is in the form of an app on your mobile phone where it stores your Bitcoin addresses’ private keys and allows you to pay for things you like using your phone directly. Your smartphone’s near-field communication (NFC) feature enables you to pay with bitcoins just by simply tapping the phone against a reader and you don’t have to input any information at all.
One of the major characteristics of mobile wallets is that they are not full Bitcoin clients. Unlike desktop wallets, mobile wallets do not download the entire Bitcoin blockchain. Mobile wallet uses instead simplified payment verification (SPV) which just downloads a portion of the blockchain for the transaction.
In online wallets, your private keys are stored online. A big advantage of using an online wallet is that you can open it on any device. Unlike laptop and mobile wallets which only allow you to store the wallet in one device, online wallets are not dependent on one device. You could even open it at an Internet cafe. The problem with this type of wallet is that you are giving access to your private keys to the organization running the website. It is quite risky, especially if you have a lot of bitcoins stored in your wallet. But cases like that could be prevented if you use trusted providers like Coinbase.
If you want to maintain a big amount of bitcoins but do not want a third party involved, you could try using a hardware wallet. Limited in number, hardware wallets are devices that hold private keys electronically and organize payments. Additionally, hardware wallets offer unsurpassed security when it comes to storing your digital coins, which is useful for those who want complete peace of mind.
For more questions with regard to storing of bitcoins, feel free to contact us and our team is happy to help you out with your concerns.