Hey guys and girls!
Welcome back to the Bitcoin series where we try to find a way to make a passive income
through digital currency mining.
In this episode, we ask the question "What Is A Bitcoin Wallet And How Does It Work?"
to give you guys a better understanding of where to put your precious coins when you
buy them.
My name is Jake Owens and this is Millionaire Mindset Hub.
Alright, let's get into it.
If you have a credit card or use cash in the real world then you probably own a wallet.
They're traditionally leather which you flip open to reveal pockets to hold your credit
and identification cards, maybe keys and a space to hold your cash or other long and
thin paper items.
So, you already know what a wallet is an essentially what a Bitcoin wallet is, sometimes referred
to as a digital wallet is because it's the exact same concept.
However, instead of being a physical product that you keep in your pocket, it's a very
sophisticated software that stores your cryptocurrency virtually.
Now, before we delve into the various wallet types, it's important to tell you guys what
a public and private key are as this can determine what wallet you choose.
A public key is in the name, it's an alphanumeric address that you provide to the public which
they can use to send you coins.
Whereas a private key is the opposite, it's the key which you need to keep safe and secure
as it's the alphanumeric code which allows you to send coins to other people.
So if someone else gets their hands on it they could send themselves all of your coins.
To own Bitcoins, or any cryptocurrency you need a digital wallet.
Which there are five types to choose from.
A desktop wallet, a mobile wallet, a web wallet, a hardware wallet and a cold wallet.
Desktop wallets as you'd imagine are installed on a desktop computer giving you, the user,
the ability of complete control over that wallet enabling you to create a Bitcoin address
for sending and receiving cryptocurrencies.
Mobile wallets can be seen as a step up from desktop wallets in the fact that they aren't
fixed to a single location.
So unless you're one of those people in the habit of carrying their desktop around everywhere
they go, a mobile wallet allows you to send and receive Bitcoins and other digital currencies
anywhere you are in the world as long as you have an internet connection.
Once you get the wallet app working on your phone properly it works just the same as the
desktop wallet where you're able to comepletely control that wallet and all of your coins
inside.
The mobile wallet also allows for a touch to pay payment method by scanning a QR code
which allows you to pay for things similarly to 'Apple Pay'.
Then there are web wallets.
These are online wallets you access through a desktop or mobile on a browser like Chrome,
Firefox or Safari.
These are the same as a mobile or desktop wallet where you have control over your coins
and can send or receive money at any time and from anywhere as long as you're logged
into your account using that same QR code or through account transactions.
Then there are hardware wallets.
These are basically devices that can hold private keys electronically and create payments
but are still in the development phase and have not been released just yet.
And lastly, there is cold storage.
Which essentially is an offline method of safeguarding your coins.
This is where your coins are on a platform that is never connected to the internet, protecting
it from unauthorised access, cyberattacks and other abilities that come with online
access.
These could be things like a USB stick that is never connected to a computer that is online
or it could be a piece of paper.
The desktop and mobile wallets are relatively safe since the key is stored on the actual
device.
So someone would have to physically steal your computer or phone to have access to that
private key.
Cold storage is a method allowing you to keep your private key completely offline so there's
no chance or ability for outsiders to remotely access your private key.
They would have to physically take the device where the key is stored.
Even on desktop and mobile, there are threats of hackers being able to log into your computer
or mobile remotely and have access to your wallet that way.
You can do cold storage by filing your private key on a USD stick, CD, Hard Drive, Paper
or a computer that never goes online.
Because the key would never have access to the internet, your key would therefore be
100% safe unless someone physically stole that device that you had your private key
on.
And the least secure way to store your private key is using an online wallet because anyone
in the world is able to gain access to your wallet souley through a username and password.
So taking all factors into consideration, what I would recommend, is using a mobile
wallet if you're intending to spend your coins.
But if you're not it's best to use a cold storage method for maximum security.
Even having a piece of paper and filing it away into a bank vault could be your best
option.
So, taking all factors into consideration what I would recommend is using a mobile wallet
if you're intending to spend your coins, if you're not it's best to use a cold storage
method for maximum security.
Even having a piece of paper and filing it away into a bank vault could be your best
option.
So in conclusion, when you have a wallet you have two keys, a public key and a private
key.
A public key is the key you give people so that they can send you money, whereas a private
key is your key you use to send other people money.
There are multiple ways to store your keys, you can use a desktop wallet, a mobile wallet,
a web based wallet, a hardware wallet and finally cold storage.
Cold storage is the most secure way to store your currency from hackers as your wallet
never touches the internet.
The web based wallet is the least secure method as it can be quite easy to figure out someones
username and password.
So I would suggest something in the middle, like a mobile wallet so it gives you the freedom
to be able to make transactions from anywhere in the world that you have an internet connection.
Hey guys and girls!
Thanks for watching, I hope you enjoyed the episode.
If it provided you with any value and you feel that way inclined feel free to hit that
subscribe button and like the video.
If you've got any questions or would just like to reach out and say "Hi!" feel free
to do so in the comment section below or feel free to PM me.
In the next episode, I'll be doing some reviews of wallets that you can use.
Again, thanks a ton for watching.
I'll see you guys in the next episode!
Cheers! :D
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