Bitcoin, the cryptocurrency of choice, is only gaining in popularity and worth. Although it fluctuates daily - and sometimes widely - the digital currency is worth somewhere in the vicinity of $500.
If you have them, want them, or plan to start accepting them for payment, youll need to get yourself a bitcoin wallet. As the name implies, its a secure place to store the bits of code that prove you own x number of bitcoins. The bitcoins themselves never really separate from the public ledger. Your wallet simply contains digital keys to the bitcoins you own.
There are many different options, including desktop and hardware versions, but most people prefer to go the online route.
Your Choice of Providers
There are a great number of bitcoin sites available online. Before choosing one, be sure and do some background research on them. Bitcoins are worth a lot of money, and before you virtually hand them over to any service provider, you need to be sure they are legitimate. There is no way to recover bitcoins should some shady online wallet steal them from you. Poof! Theyre gone.
Instead, check online forums for complaints. Google the company name and see what comes up. Read reviews. Many online wallets are safe, strong, and secure. Others arent. Be 100% certain which one you are setting up shop with.
Creating a Wallet
A bitcoin wallet stores the pieces of code (think of them as keys) that lead to your coins on the public ledger. You want to protect that information as though it were currency, because it essentially is. Your keys are the only proof that you own any bitcoins. Dont take chances with them. Dont lose them.
Creating a bitcoin wallet is very easy. With either Blockchain or Coinbase, the steps are roughly the same. Click on Start/Create a New Wallet.
Step 1: Email and Password
Enter your preferred email address, and create a secure password. This password should follow the recent suggestions for strong online security (dont use words, include letters, numbers, and symbols, upper and lower case, avoid names and dates that are important to you or easily discoverable by others). Blockchain, for example, requires a password of at least ten characters in length (they state it would take 1000 years for someone to decrypt). Enter your details and hit Continue or Create.
Step 2: Verify
Coinbase will immediately send you an email to the address you provided. Click the link to verify your account. Click the link, and youll be taken to the Coinbase User Agreement. Read through it, sign the bottom, and hit continue.
Blockchain does send a verification email, but your wallet is created before you actually click the link. This email contains your login link and verification code...be sure and save it. Blockchain will immediately give you a Wallet Recovery Mnemonic, a long series of words and phrases that could be used to recover your wallet if you lose the password. Write it down by hand and keep it somewhere safe. Use the login link and youll be taken to the sign in page, your wallet identifier already inputted. Just enter your strong password and hit Open Wallet.
Step 3: Personalize and Improve
For all intents and purposes, thats it. Your wallet is ready. You should take a few moments and familiarize yourself with your specific provider. Click through and see whats there, what you can do, and the settings you can adjust.
In Coinbase, click on SETTINGS on the top-right under your name. Here, you can tweak your user settings (password, time zone, notifications...its a good idea to set up notifications for ALL activity, so youll be aware instantly if anything strange is happening), personal information, and look up and generate your wallet addresses.
In Blockchain, after youre logged in, youll see your transactions and activity listed, as well as your wallet address. On the right-hand side, youll see links to Account Settings, and Backup. It is a wide and prudent habit to backup your wallet frequently. Blockchain and Coinbase and both reliable providers, but the unthinkable can and does sometimes happen. With Blockchain, you can download a backup, or save one to Dropbox or Google Drive, email it to yourself (or someone else), or print a paper copy. Whichever you select, just make sure you do it. Under Account Settings (after re-entering your password), youll see much the same options. Personal information, logout protocol (set it to log you out automatically after a set period of time), notifications (do it!), passwords, and additional security. Blockchain allows you to set up two-factor authentication under SECURITY. This is a very good idea for everyone, as it creates a second layer of security for anyone attempting to access your wallet. Once enabled, anyone logging in will need both the password, and a second code (generated by email or Google Authenticator). Two-factor authentication makes it virtually impossible for someone to hack into your account.
Once youve tweaked your user settings and added additional layers of security, youre ready to start sending and receiving bitcoins. Your wallet is ready, willing, and able. Both Blockchain (Bitcoin Wallet by Blockchain) and Coinbase (Bitcoin Wallet by Coinbase) have mobile apps available for Android, allowing you to keep tabs and use your wallet on the go. It’s easy to forget sometimes that bitcoins are real, despite being only digital, so take all the same security precautions with your new bitcoin wallet that you would take for any other online banking. Be careful, and never share your password and login credentials with anyone. And remember to backup frequently...you’ll thank me.
Photo by Antana