In the modern world, online transfers have become an important component of cashless payments. One of the innovative ways to make such payments is Bitcoin cryptocurrency, which is stored on special virtual wallets. How to create a Bitcoin wallet we will describe in this article.
Bitcoin wallet – a service, program or device for storing cryptocurrency Bitcoin, with which you can transfer and store your virtual money. This wallet contains private keys – secret digital codes that allow you to manage bitcoins. They serve to identify the senders and recipients of funds in transactions, as well as to prevent the transfer of money on behalf of others. These keys are generated by the wallet application itself or by the corresponding online service. The difference is in the place of their storage in the first case – this is your computer, and in the second – the online wallet server.
Please note that the Bitcoin wallet address consists of 34 characters (letters and numbers), so be sure to copy it and take care not to lose.
To create a wallet you do not need to scan or photograph documents, since all calculations with Bitcoin are anonymous. It will be enough to specify the active email address and come up with a complex password.
So how do you create a bitcoin wallet? First of all you need to go to the official Bitcoin website bitcoin.org. After clicking on the “Wallet” button, you must select the desired type of wallet.
Bitcoin wallet as a computer program
For this species there are several possible options. Modern HD Wallet (the current generation of wallets, which appeared in 2011) represents two possibilities, called the “thick” and “thin” wallet.
“Thick” Bitcoin wallet is a type of storage that involves downloading all the blocks and checking their reliability. Blocks are the individual components of the blockchain chain, in which information about completed transactions is stored, i.e. transfer funds from one user to another. Each new block contains a link to the previous one. This is a prerequisite, since there is no center that controls the turnover of bitcoins, so all transactions are recorded in blocks to ensure the transparency of calculations in the network, since information about them will not be stored on one computer, but on many.
This type of storage is one of the most reliable, since all private keys are not stored on third-party services, but exclusively on your computer.
A proven tool for using the thick wallet is the Bitcoin Core app. Stable work and high level of privacy make it one of the best in this area. The used wallet.dat file can be protected with a personal password. Since this is an official Bitcoin wallet, all updates are installed immediately after their introduction by the developers. The only drawback is resource consumption, since it requires 50 GB of free hard disk space.
Strengthen the protection of this wallet will help the application Armory, which is installed on top of Bitcoin Core and expands its functions. Its specificity is to enhance confidentiality, additional storage options and a multi-level allocation of rights to use bitcoins.
A thin wallet is distinguished by the fact that it has a simplified system of interconnection with blocks — through the TCP server of the wallet developers. This implies the main advantage of such wallets – speed in work. But at the same time, security suffers a bit, since such wallets do not download the whole chain of blocks, but take information from the developer’s servers, which creates dependence on the latter.
The most popular thin wallet applications are MultiBit and Electrum. The first is an easy-to-use application that quickly connects to the network and has one of the most intuitive interfaces from all wallets. The second application speeds up the workflow even more and at the same time consumes less computer power.
Bitcoin Wallet as an online service
These means of storing cryptocurrencies are better suited for operations with small amounts, because they are fast, but have a weak point – the keys to such wallet are stored online. You can manage such a wallet from any device, it does not need to download blocks, which significantly speeds up its use.
There is also a wide range of wallets, among which, among others, are decent services with support for the Russian language – for example, Green Address.
Access to such a wallet is easier to restore than computer counterparts. During registration, you will be shown a long sentence that you need to copy and never delete. This offer will be used to restore access to the wallet in case the user forgets or loses access.
The most popular wallet in this segment is the BitGo service, which has a simple beginner-friendly interface, because when creating and using it requires filling out intuitive forms, like email registration.
Bitcoin Wallet as a mobile application
An application is also downloaded for a mobile device, which helps to carry out calculations by reading QR codes in which the recipient’s address can be encrypted, or using NFC (wireless data transmission technology, Bluetooth analog), as with other contactless payments.
It is necessary to distinguish between applications for the use of bitcoins and wallet, which involves storage. For the latter, one of the best options is Bitcoin Wallet and Mycelium Wallet. Both are distributed free through the Google Play store.
In the first application, the emphasis is on usability, for which the developers even implemented a navigator that allows you to quickly find the places where Bitcoins are received as a means of payment. Also, a special cryptocurrency news collector is built into the application.
Mycelium Wallet cannot boast of such broad functions, but here the emphasis is placed on the security of the wallet, which makes it possible to make a backup copy of it and put it in “cold” (that is, offline) storage.
Hardware Bitcoin Wallet
The best option for storing cryptocurrency, since it is impossible to access it remotely. He most resembles an ordinary wallet – to use it, you need to own it. You can steal funds from it only if you steal the device itself from the house, which looks like a flash card or portable hard disk, so these wallets are best suited for storing large amounts of bitcoins.
Managing transactions in modern wallets of this type, equipped with a screen, is quite simple. By connecting the device to the computer via a USB adapter, the user enters a PIN code and can manage the contents of the wallet already through the PC screen.
The only relative disadvantage of such device is the price from $ 58 (Ledger Nano S) to $ 99 (Trezor and KeepKey). It is easier to perform daily operations from mobile or online wallets, and hardware will become a reliable storage of your savings, since private keys are only stored in the device’s memory, which makes it almost impossible to break them.
How does bitcoin wallet and its security work?
During a transaction, an application or service debits a certain amount of cryptocurrency from the account and rewrites it to another account. Further, information about the operation goes into the open registry, the so-called “blockchain”, i.e. chain of blocks.
For each transaction, two parameters are written – “input” and “output”. If you are going to transfer funds, so they are designated as “input” for your wallet, and to the account of the user to whom they are sent, designated as “output”. Each “input” is a send to the previous “output”. This was done in order to not be able to simultaneously send funds to two accounts, as well as to control the turnover of bitcoins. The rest of the principle is similar to a bank transfer.
Since the transfer of Bitcoins can not be canceled, you should seriously consider the security of access to your wallet. If the criminals manage to steal a wallet file from your computer or online service (when hacked), then the money will naturally disappear.
To prevent the online wallet from being hacked, use the services provided, for example, in the Blockchain.info wallet, through the “Security Center” section, where you need to fill in the fields of the special questionnaire. In turn, the Green Address wallet can boast of generating two keys instead of one, which complicates its hacking.
Summing up, we note that there is no universal Bitcoin wallet, and it is necessary to choose, analyzing your needs and clearly understanding how to create a Bitcoin wallet that is most suitable for the tasks.
The best option would be the presence of two wallets, one used to store cryptocurrency, and the other – for regular transfers. Small amounts can be stored on Bitcoin wallets, which are distinguished by speed, and large amounts – on those where the emphasis is on security.