What is a Bitcoin wallet ?
A bitcoin wallet is a software where you can manage your bitcoins easily. But in reality there are no such thing a Bitcoin Wallet. Just like there are no coins in Bitcoin, this might be confusing to you. In this article, we will explain what is it.
There are no Coins in Bitcoin
You might have seen theses pictures of a physical coin with the Bitcoin logo on it, but theses are not Bitcoins. It’s just a piece of metal with a logo on it. In reality Bitcoins are purely digital, they do not exist in the physical despite the fact that to be created, a certain amount of real energy (electricity) needs to be spend. All there is is the Bitcoin blockchain, which is basically a database of all the adresses with their amounts.
Public and Private Keys
To receive bitcoin, you need to give your public key so that the person sending money to you actually can. You can give this public key to anyone without any risk, just like when you give your email adress, it does not give access to your email adress. But if you want to spend your bitcoin, you will need your private key to sign the transaction. And your wallet only does that. It manages your keys for you in a nice user interface, so that you can receive and spend bitcoin easily.
There are different kinds of bitcoin wallet: Desktop, Mobile, Web, Paper and Hardware.
Web & Mobile Wallets :
Theses are wallets where your keys are stored online, just like Coinbase and Blockchain. It really easy to get started, but it is not secured because you don’t have access to your keys.
This is straightforward, it’s simply a physical paper with your private and public keys printed on it. This has good security since your keys are not stored on a computer, but the paper can be damaged, lost or destroyed.
This is by far the best way to store and secure your bitcoin and other cryptocurrencies. There are several company that manufactures hardware wallet, the best on the market is Ledger. Starting at 59$, you can have a hardware wallet (basically a usb drive) where you can store your assets in a very secure way, because the keys are store on the device, and they never touch the internet. So you can’t get hacked.
As we’ve seen last week, a growing narrative within the ecosystem is pushing the idea that Proof-Of-Work is a bad system that will inevitably fail in time. The most common proposed alternative is Proof-Of-Stake or PoS [...]