Bitcoin Tutorial – Part 2

How To Open An Account To Invest

To start investing in cryptocurrencies, the first thing you would need is to set up your digital wallet. In the cryptocurrency realm, the term used is “wallet.” The wallet can be likened to a bank account, which can be stored in different devices.

A cryptocurrency wallet is a software program that functions to store private and public keys and interacts with various blockchains. It enables users to send and receive cryptocurrencies as well as tracking their balance. Once you have set up your wallet, you can then proceed to purchase and exchange the digital currency of your choice on many platforms.

There are many wallets out there for you to choose from, which is all dependent on your security needs as well as whether you wish to be an active trader or a more passive buy-and-hold investor.

To asses which user you are, you need to answer the following questions:
1. Do you need a wallet for everyday purchases, or just buying and holding your digital currency?
2. Do you plan to use several currencies or just one single currency?
3. Do you require access to your digital wallet wherever you are, even when you are on the go or only from home?

For instance, if you are the type of user who constantly spends your crypto funds to purchase daily necessities, you may want to store your wallet in your mobile device or cloud.

However, if you plan to buy and hold your currencies for future investments, it is best for you to store your wallet on a hardware or paper wallet.

Once you have chosen the best platform to hold your currencies, you can now proceed to the many digital currency exchanges to purchase your cryptocurrency and kick start your investment!

Firstly, let’s explore the top 5 wallets for you to choose from to hold your crypto funds. The top 5 wallets that you can choose from to store your cryptocurrencies are as follows:

1. breadwallet.com
2. Blockchain.info
3. MyEtherWallet
4. Jaxx Wallet
5. Trezor

Firstly, let’s examine breadwallet.

Breadwallet is now breadapp.com. Before they could only receive Bitcoin to store in their digital wallets. Now you can buy, save, send and receive. This wallet is great for Bitcoin beginners as it is very user friendly and simple to use. Most importantly, the tool is free to use.

All you need to do is to download the app, choose a PIN and write down your Paper Key for safe keeping. There are no login names or passwords and no complicated cryptographic keys or configuring any settings. However, the downside of this wallet is that it can only be downloaded to your mobile device and there is no web or desktop interfaces. It also lacks features and it is a hot wallet, which means it has less security and other parties may access your private keys easier.

Next is Blockchain.info

The Blockchain is catered towards Bitcoins only. It is both a web-based wallet and a mobile-based app for both iOS and Android. most distinguished feature of the Blockchain wallet is the newly developed payment channel for the Bitcoin network, known as “Thunder.”

The technology enables users to send and receive Bitcoins without touching the main blockchain. This results in a very secure transaction and instant payments. The Blockchain wallet is also free.

The third wallet is MyEtherWallet.com

This wallet caters specifically to Ethereum currency. This wallet is user friendly as it allows you to create a new wallet without having to download the blockchain as you can simply use the web-based application.

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MyEtherWallet is not your standard web wallet. You do not have to create an account on their server. You just simply create a wallet which is yours to keep, where you may broadcast your transactions on the blockchain through their full node.

Next is Jaxx Wallet at jaxx.io

The biggest advantage of Jaxx is that it supports many of the leading cryptocurrency platforms such as Bitcoin, Ethereum, Litecoin, Dash and many more. It is both available to be downloaded on the mobile device or you can open it on the web. They run on  iOS, Android, Windows, Mac and other platforms.

It also has one of the best user interface as when you login to the system you know how to navigate yourself and it is pretty straightforward. They prioritize user experience.

Jaxx also has very good security and privacy settings as your private keys are sent to your local device and never to any servers. This simply means you have full access to your crypto funds and Jaxx does not hold or have access to any of your funds. However, as the code is not an open source, the system sometimes can be quite slow to load.

Last but not least is Trezor.io

Trezor is a hardware Bitcoin wallet ideal for storing large amounts of Bitcoin. It is also suitable for beginners and very user friendly and has very good security and privacy settings. The web interface is easy to use and the device comes with a built in screen. Most importantly, it is open source software.

As it is a very secure and practical device, the cost is a little bit pricey at average cost of $200. You must also have a device to send your bitcoins.

We’ve already discussed the platforms where you can hold your cryptocurrencies. As mentioned previously, the wallets can be stored in different devices. In addition, there are 5 types of devices where you can download and store your wallets to hold your cryptocurrencies:

1. Desktop
2. Cloud
3. Mobile Devices
4. Hardware
5. Paper

Firstly, is your desktop.

Your wallets can be downloaded on a PC or laptop. They are only accessible from the single computer in which they are downloaded. It offers very good security but the drawback is you are only able to access your wallet on the desktop and nowhere else.

The second drawback is when your PC is attacked by virus, the virus may also affect your cryptocurrency wallet and your wallet may get hacked. The virus may also access your private keys and your funds.

Secondly, your wallet can be downloaded and stored in cloud or online. The wallets run on the cloud and are accessible from any devices in any location.

They are very convenient to access unlike your wallets stored on the desktop. However, bear in mind that your private keys are stored online and other parties may potentially access your wallet easily.

The next wallet is your mobile wallet. You can download your wallet on your mobile device via the App Store or Google Playstore and others. Having your wallet on your mobile makes it very convenient as you have access to it anywhere you go.

A lot of them are quite secure as they have multiple signature accesses as well as backup features in case you lose your phone. This way you would not risk losing your crypto funds as the backup feature has backed up your private key to unlock your wallet.

The fourth wallet is your hardware wallet. A hardware wallet means you store your crypto funds on a USB or hard drive. Although hardware wallets complete their transactions online, they are stored offline and this enhances the security.

Last but not least is you can store your wallet on paper. Paper wallets are wallets printed out on a piece of paper. They are very easy to use as you have the option to carry it wherever you go, or you can even store it somewhere safe.

Because they are printed out, they provide a very high level of security. While the term paper wallet can refer to a physical copy or printout of your public and private keys, it can also refer to a piece of software used to securely generate a pair of keys which are then printed.

So, where should you store your wallet which contains your crypto funds? This all depends on whether you are an active or passive user of cryptocurrency.

For instance, if you are the type of user who constantly spends your crypto funds to purchase daily necessities, you may want to store your wallet in your mobile device or on cloud. However, if you plan to buy and hold your currencies for future investments, it is best for you to store your wallet on a hardware or paper wallet.

Once you have chosen the best platform to hold your currencies, you can now proceed to the many digital currency exchanges to purchase your cryptocurrency and kick start your investment!

To start investing, you have to firstly possess a digital wallet. Then, shop around for suitable exchange platforms according to your preferences.

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