THE SAFEST WALLETS ARE THE WALLETS YOU INSTALL ON YOUR COMPUTER WITH YOUR CHOICE OF SOFTWARE. I RECOMMEND ELECTRUM.
There are four types of wallets:
- Web wallets
- These are the kind of wallets that only exist on a website and must be accessed through your browser or app.
- THE LEAST SAFE
- Mobile wallets
- 'Mobile' is just another name for a web wallet on your phone or tablet or device. They are pure web wallets too.
- So what about Android wallets?
- They will not be covered here, since this blog is also about NOT getting ripped off; I do not consider them appropriate for newbies. Although if you want to use your phone to use Bitcoin then you must use an Android phone and the Android App or Electrum. I will add this to the 'advanced' section at a later date.
- Apple has kicked the app from their store! Shame on you Apple!
- THE LEAST SAFE
- Desktop wallets
- Are 'native' or onboard wallets on your computer that you must install with the relative software.
- SAFEST ELECTRONIC WALLET!
- Paper wallets or 'Physical' wallets.
- Paper wallets are wallets that consist only of the public and private keys.
- Actually you can make a wallet out of anything once you know the private and public keys!
- This is really cool and hard to understand at first but it's like this:
- A Bitcoin is really just a number or code which can only be accessed with the private key, anyone who has or knows this number can use/spend the relative Bitcoin.
- Some people actually 'store' their bitcoins in this way but since you cannot use a paper or physical wallet to send money and use it like paypal I do not recommend it for Newbies. Paper wallets are only good for storing your bitcoins - not using or sending them.
- Paper Wallet Tutorial 1
- Tutorial 2
- Paper Wallet Wiki
- Paper Wallet Generator
- My favorite paper wallet generator.
- ABSOLUTELY SAFE - HIGHEST SAFETY FACTOR OF ALL WALLETS!
Now listen to me, I am going to save you a lot of time here, instead of combing the internet and researching the various wallet providers and software, DON'T BOTHER, I already researched them for you and the best wallet for newbies as well as advanced users is ELECTRUM.
Go to their website (linked above) and download the software installer for your computer.
If you are a Linux user guess what - YOU ARE EVEN MORE AWESOME! -- because most Linuxes based on Debian already have Electrum in their package manager! So go to your APT, or Synaptic or whatever your manager is called and type in 'electrum' in the search field - boom! It's there innit? Install it. Thank you, I just saved you some serious time and headaches. You can tip me with bitcoins please (more on that later).
Why Electrum?
Full disclosure -- NO I do not work for them and I am not getting one red cent for this. I have tested them and other wallets and have found Electrum simply the best, for the following reasons:
- It is definitely the easiest to back-up for newbies, actually for anyone.
- This is the most magnificent part; your wallet generates a 'seed', which is a long string of words. If your computer ever breaks, you just re-install the wallet and input your seed - Voila! Everything backed up! I have tested this and it works perfectly. This is the huge advantage of a hybrid wallet. It goes without saying NEVER reveal your seed to anyone! NEVER store it on the web or in emails, dropbox, googledocs. etc. It is the key to your entire wallet and all bitcoin addresses therein!
- It is the fastest.
- Electrum is actually a 'hybrid' wallet, which means the block chain resides on Electrum's server, while on your computer is only your wallet and the user interface. This means your computer doesn't have to load and calculate the block chain -which is now over 15gb! If you use the other wallets, you may find that it takes literally hours for the wallet to load and sync the blockchain if you have not used your wallet for a couple of days. And when you first install your wallet it will take HOURS to load the blockchain for the first time. This really sucks. This means you just can't turn your computer on and start sending/receiving coins -- you have to wait for however long it takes, depending on how long it's been since you last synced. See screenshot below of a newly installed Mintcoin wallet. 97,636 blocks remaining. Those 'blocks' are the blocks of the blockchain that all have to load before you can use your wallet. This means you should 'turn on' your wallet at least once a day, otherwise you will be waiting a long time everytime you don't use it for a couple of days.
- This does not happen with the Electrum wallet - it's instantly on:
- I know what you are saying now; "That means my bitcoins are on their server like a web wallet!" Relax ... no... it doesn't. It means the Blockchain is on their server, the bitcoins and the private keys (remember that is what matters) are on your computer.
- It is overall the most user friendly:
- I could install it and use it as a newbie with a minimal learning curve.
- More feedback from the community.
- It has a function known as 'import private keys'.
- This is how you import a paper wallet or other wallet to your Electrum Wallet.
- Some wallets don't have this function! Or you have to google it and find out the answer in the forums. For example in the Litecoin wallet you have to open the debugging console and enter a specific scrypt -- NOT user friendly and certainly NOT newbie friendly!
Using your Electrum wallet:
- After downloading and installing the software, start your Electrum Wallet. You should see something like this:
- Of course yours will not have a history like the one above but that's OK.
- You will notice the little green light in the lower right hand corner - that means you are synced to the network.
- BACK UP YOUR WALLET:
- Go to tab Wallet » Show » Seed
- Write down your 'SEED' somewhere safe, you can get creative about this, you can store one of the twelve words in a totally different place or inscribe them under your table, or highlight them in a book in a way that only you can understand. There is a story of one of the Bitcoin Billionaires who has his seed or private key on the inside of his wedding ring.
- But NEVER store them in a word file, email, or .txt file on the internet. If you want to store your seed this way, do so on a USB stick and put that stick in a safe -- lock the safe (duh).
- Go to 'RECEIVE' tab. Now look at the Bitcoin address in the middle - that I have not blurred out. This is 'it' - a bitcoin address. You can send bitcoins to this address and this is what you must give to people if you want to receive bitcoins. This is the public address, so it is OK to give it out to people once you have decided they meet your safety requirements.
- ACHTUNG!
- Make sure you are in the 'RECEIVE' tab to see only your Bitcoin addresses.
- The 'HISTORY' tab shows all transactions and therefore also Bitcoin addresses not belonging to you.
- This is a Bitcoin address, you can click on it to see its history in Blockchain.info:
- You can copy and paste ANY Bitcoin address in https://blockchain.info/ and see its entire history.
- Explore this website a bit, you can do no wrong. As mentioned in the 'NEVER' section, you can see that all Bitcoin Addresses are public, and hyperlinked! All you have to do is click on them and you will see ALL transactions of this address forever in the Blockchain.info website. This is full transparency, and it is called the 'Public Ledger'.
- Sending Bitcoins:
- Simply go to tab 'SEND'.
- Input a bitcoin address.
- Enter amount.
- Enter a 'DESCRIPTION' if you want - REMEMBER - never put personal details in this note - it will appear in the blockchain forever and eternity +1.
- Hit the Send button.
- See example screenshot below:
- Receiving Bitcoins:
- So what about those QR codes?
- The QR codes are those funny boxes that you can scan - for example with your celphone - to input or read the bitcoin address.
- In your electrum wallet go to 'Receive' tab and right click on one of your Bitcoin addresses, you get the QR code for that bitcoin address:
This is a very handy tool that you can integrate into your website or shop window, or even a T-shirt!
- It is just as easy to add your Bitcoin address and hyperlink it, the QR code is mainly for celphone users and their respective apps.
- You can read a QR code with a web based app and there are many of them, my favorite is ZXing.
- The QR code is also easier to read from a distance, for example if you have a poster or T-shirt. Check this out; a kid made 24,000 dollars just by waving his QR code at the right place at the right time! Now that's the magic of Bitcoin!
- Here is one example of how you could display your Bitcoin address to receive funds: 1JXMPrDYvs3WmBsHpKrnV1Q5Lkc2tgLoY5
- But that's not very 'sleek' is it? A less obtrusive way is with the handy widget below from coinwidget.com. It will even open your bitcoin wallet on your computer if the wallet is installed correctly.
- The best wallet is Electrum.
- In order to receive Bitcoins, just go to tab 'Receive', right click on one of your addresses and you can copy the address to your clipboard and send it to the person you want to receive Bitcoins from.
- Alternatively right click and show QR code - make a screenshot of it. Send it, paste it in a website, make a T-shirt or poster of it, make it visible!
- Giving out your Bitcoin address is entirely 'SAFE', there is absolutely no way someone can 'reverse engineer' and crack your wallet with it or find out your private keys or seed.
- The only risk you run when giving out your Bitcoin address is that ANYONE can see its history in Blockchain.info. This is the nature of Bitcoin and the public ledger. You have to get used to it and learn the proper etiquette, think of it like a public Facebook profile. It is only anonymous as long as nobody makes a comment on your post with specific information.
- To send Bitcoins just copy and paste a Bitcoin address in the 'Send to' field.
- Paper wallets are considered the safest, however you cannot send BTC from a paper wallet, you can only store or receive BTC.
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