Bitcoins are stored in a digital wallet that makes use of the blockchain network. You can make transactions and access your bitcoins from this wallet. This guide is tailored to show the various ways of securely storing your bitcoin.
All wallets give its users a code called a private key which is important for the security o the coin stored in the wallet. The wallet is used for managing transactions as well as storing the Bitcoin. If anyone gains access to your private key, the coins stored in your wallet are in jeopardy of being stolen. On the other hand, if you lose your private key, you cannot ever gain access to your funds stored. For this reason, it is important to back up your private key. The public key, however, is the address where people can send bitcoin to you.
Types of Wallets
Online Wallets for store bitcoin
These are also referred to as Hot wallets and here, the private key is stored on internet-connected devices or online. These wallets are not as secure as they are prone to hacking due to the fact that the private key must be revealed to the third party. To reduce this risk, hot wallets should hold minimal amounts of bitcoin meant for daily business transactions. They are however very appropriate for day to day use.
These are called Cold wallets and the private key is stored offline on paper, on a hard drive or one’s memory. Cold wallets are less susceptible to hacking and it is recommended that larger amounts of bitcoin be stored here for safe keeping.