Bitcoin is an electronic form of money that cannot be stored in physical wallets; it is a digital currency that can only exist and is stored digitally.
Users don’t have to visit banks to deposit or withdraw bitcoins as these exist in the virtual cloud. But how would you use this digital currency? If you are excited to learn about buying, spending, and storing bitcoins, you’re not alone.
You need to know that bitcoins can be stored and managed from digital storage spaces known as digital wallet, which allow users to make transfers directly from one wallet to another without the permission of the government or banks.
How to send bitcoins?
If you have already purchased bitcoin via a crypto exchange, you are now the owner of a digital currency. To send and receive bitcoins, you need to own a bitcoin address. A bitcoin address is a unique address in the format of a long string of characters and numerals generated randomly. When using a bitcoin wallet, users receive a private key. Through this key, users can send and access bitcoins from their wallets and prevent hackers from hacking your coins. Each wallet has a bitcoin address, and each address has a private key that is used to access it.
Bitcoin wallets use the private key to restrict the access of bitcoins only to the owner so that no other person can access and attack your coins. Private keys must be kept confidential, or else the wallet owner will lose all their coins.
How to store and manage your bitcoins in the digital wallet?
For newbies and even for expert crypto users, it is time-consuming to track the bitcoin addresses and keys all by you, and therefore, bitcoin wallets are used. The wallet is software designed to store your digital tokens and keep track of wallets and addresses so you don’t have to maintain a book or list. A bitcoin wallet is required for easy storage and management.
Bitcoin transactions are recorded on the blockchain ledger, and your wallet updates the balance and knows that you have unspent bitcoins is because all computers on blockchain agree to this thing. The status of your wallet and all the wallets of the bitcoin network are recorded in a large distributed ledger, known as a “blockchain.” When you initiate a transaction or the transaction gets completed, the digital wallet updates the ledger about the same. It shows the record of all transactions or bitcoins sent from your wallet address to other addresses. Everything is written on the ledger when all the computers agreed on a similar thing.
Digital wallets enable you to access your bitcoins, and handle the cryptocurrency addresses according to payments that you want to make to others.
How to pay with a bitcoin wallet?
There is a wide range of bitcoin wallets that can be used on mobile devices and laptops. Some of the wallets are software-based that only run-on computers; some wallets are in the form of an app that can be downloaded on a mobile device; some wallets have a website that can be accessed on a web browser, and more. Software-based wallets store wallet addresses and private keys on a hard drive. Wallets in the format of apps can be carried and used anywhere as you can pay bitcoins by scanning QR code by hitting the scan button and entering the amount, and hitting the send button. In addition, you can pay with them at shopping malls, coffee shops, grocery stores, and other places that accept bitcoin payments.
These are the online wallets that only require an internet connection and store your private keys and wallet addresses on servers. Once the setup is done, you can then use your bitcoins almost anywhere. Just remember to secure your mobile or desktop where your wallet is stored by taking the appropriate precautionary measures.
Photo Credit: stock photo