Today we have decided to have a small crash course for those who are new at the market of cryptocurrencies. And we’re going to start from the very basics.
The most important point that one has to understand, is that to keep cryptocurrency you have to have a wallet’s address and there are three ways how you can create one:
- Use online wallets
- Download a program to your PC
- Buy a hardware wallet
We will quickly go through pros and cons of each way. But let’s start by telling a few words about what a wallet for cryptocurrencies is using bitcoin as a sample. Bitcoin, as any other cryptocurrency, is kept only in a form of a blockchain. Anybody can view a transaction in the net, check the balance of any wallet. This information is open for everyone. But it is impossible to tell who the owner of the wallet is.
Bitcoin wallet has two parts:
• Open key. It is the address of the bitcoin wallet, it is not a secret. It has 32-34 symbols of Latin letters and numbers. All addresses always start with the number “1” or “3”.
• Private key (sometimes called as a secret key). It is a longer sequence of letters and numbers of the Latin alphabet. You mustn’t tell it to anyone, because it is an access to the wallet.
Transaction in bitcoin network means that cryptocoins go from one wallet’s address to another. The speed of transaction is equal to emerging of a new block in blockchain (10 minutes on average).
Transaction is subject to a small fee. Depending on the network loading, its amount can change. The sender specifies its amount. By the way, commission does not depend on the amount of transaction. You can transfer amount equaling to $10, $10000 or $1 billion and still pay the same commission.
- Online wallets
There are lots of sites which offer services for creation and keeping online-wallets. They are called “cryptowallets”. The service takes on all the issues of keeping funds safe. There are pros in that, since you don’t need to think about computer safety, plus reliability of the service is usually much better that that of a simple computer.
We would like to personally recommend the service blockchain.com
- Program on your PC
You can download programs for bitcoin wallet on the official website bitcoin.org. Here you can choose from lots of wallets supported by community: Bitcoin Core, MultiBit, Armory and Electrum. Also, you can learn the features of each of them. They slightly differ from each other. For example, Electrum does not keep all the history of transactions (blockchain) on computer, but it refers to randomly selected network nodes. Bitcoin Core, on the opposite, keeps the full history on your PC and computer must always be online for checking if the data is accurate. Today the blockchain size for bitcoin is about 200 Gigabytes. Many people recommend taking the security of a computer with bitcoin-wallet seriously. This is because in case fraudsters steal the wallet file, all your funds there will disappear. As nobody wants this to happen, you need to follow the basic rules of computer usage safety.
- Hardware wallets
Hardware wallets are a device that keeps the private key. Their advantage is that it is switched off the Internet and there is no way anybody can hack this wallet. If the device breaks or you lose access to it, you can restore it by entering 24 random words (so-called seed words).
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We wish you reliable and profitable exchanges!