Two years after the creation of the Bitcoin network, you could purchase a single bitcoin for a little under $14. Bitcoin now commands a price approaching $30,000 after a significant crash.
This meteoric rise has gotten a lot of people interested in cryptocurrency. Whether it’s Bitcoin, Ethereum, or one of the dozens of altcoins, crypto has become a key part of lots of investment portfolios.
That may have you wondering how to create a Bitcoin wallet. You might have heard the term already but have no idea what it is or why you’d need one. Maybe you ran into the need for a wallet when looking to invest.
We’ll go over what a bitcoin wallet is, how to create one, and how to add bitcoin to a wallet.
What Is a Bitcoin Wallet?
A crypto wallet or bitcoin wallet stores your cryptocurrencies. You can store more than bitcoin in a crypto wallet. It can include any cryptocurrencies you own.
Any type of crypto wallet can perform transactions at a bitcoin ATM. If you want to learn more about bitcoin ATMs, this is a great resource.
Common types of wallets include hosted wallets, non-custodial wallets, and hardware wallets. Each of these differs in who handles the coins and how they’re used.
Hosted wallets exist on a service like Coinbase. Rather than having to deal with your wallet yourself, the service handles it for you.
You cannot lose a hosted wallet by losing a physical object. Some features of bitcoin cannot be used with hosted wallets, however.
Non-custodial wallets use software rather than hardware but have no service hosting the wallet. If you lose your passphrase or key, you lose access to your wallet and have no recourse.
These offer access to more features than hosted wallets but increase your risk.
Hardware wallets use a physical USB device to store cryptocurrencies. These add hassle but can keep crypto safe even if your computer gets hacked or a company faces a data breach.
How to Create a Bitcoin Wallet
Different types of wallets have different creation methods. For hosted and non-custodial wallets, you will get one as part of creating an account on the host’s service. Non-custodial wallets will also require you to download an application and write down a key.
Hardware wallets require you to purchase a hardware-based dongle. Once you have the dongle, you will need to install software to support it. Only then can you transfer crypto to your wallet.
How to Add Cryptocurrency to a Crypto Wallet
Once you create your wallet, you’ll see a “Receive” address for specific blockchains. This allows you to tell services that buy or sell crypto, such as online exchanges and bitcoin ATMs, where to send the coins.
Your address changes for each transaction. To get a new address, you will have to check your wallet again.
Your wallet also includes private and public keys, which form the basis of these transactions. Do not give out your private wallet key, as others can use it to steal your investments.
What’s In Your Wallet?
Now that you know the different types of Bitcoin wallets, how to create a bitcoin wallet of each type, and how to use it to get money, you can start investing in crypto. A lot of people have seen massive gains and losses in this new investment opportunity. Which will you be?
Looking for more on crypto? Check out our cryptocurrency and technology sections and try reading a few articles.