Bitcoin was launched in 2009 when its software was launched. Nobody knows for sure who is the Bitcoin funder. It is believed that Bitcoin was founded by someone Satoshi Nakamoto who may be a person or a group of people.
Bitcoin has always been known for its extreme volatility. The BTC price changes constantly.
So, what is Bitcoin?
Bitcoin is a cryptocurrency. It runs on a decentralized computer network that uses blockchain technology. This system acts as a huge public record of all transactions in the blockchain. The computers that build the network (nodes) verify these transactions and make sure that coins are spent correctly. These transactions are collected in blocks, and blocks are added to the blockchain.
Each time when nodes create a new block, they receive Bitcoins for their work. The process of creating new Bitcoins is called mining, and rewards are called mining rewards.
Bitcoin is so popular because its decentralized. It means that users can send BTC directly one to another, without sending money to a bank or another central authority. This is why Bitcoin offers people a good level of autonomy and doesn’t depend on banks and traditional financial institutions.
Bitcoin is also anonymous. You can see all transactions on the blockchain, but you don’t know who made them. Even though transactions in Bitcoin can be traced, it is very difficult to do it, and this is one more reason for Bitcoin’s popularity.
How to Get Bitcoins?
If you buy Bitcoin, you will need a secure place to store it.
Bitcoin storage comes in two types: hot wallets and cold wallets. Hot wallets allow faster transactions and cold wallets add extra security but may take longer to use.
Hot Wallet
A hot crypto wallet usually belongs to an exchange or service provider, and it stores your Bitcoin online. You can access it via an app or web browser. Most cryptocurrency exchanges provide free hot wallets, and they store all your Bitcoins there. However, many users prefer to transfer their Bitcoin to third-party hot wallet providers, which are also free to set up and use.
Why use a wallet outside of an exchange?
Hot wallets are often targeted by hackers because they are online. Many exchanges and hot wallets were hacked in the past. They do not offer any specific insurance like a bank, and this is why we do not recommend using them for long-term storage.
Cold Wallet
A cold crypto wallet is a portable, encrypted device that stores Bitcoin offline. It costs less than $100, but its security level is much higher than the security level of any hot wallet. It is not connected to the internet, this is why it is difficult for hackers to access it.
Tips for Cryptocurrency Wallet Security
When you create a crypto wallet and set it up, always use a strong password enable two-factor authentication.
What Is a Bitcoin Address?
A Bitcoin address is a unique identifier that you can use for sending and receiving Bitcoin (BTC). It works like an account number for cryptocurrency transactions. You share your Bitcoin address with others to receive funds, and it ensures the transaction happens securely on the Bitcoin network.
What a typical Bitcoin address looks like?
A Bitcoin address is a string of letters and numbers, usually between 26 and 35 characters long. Most addresses start with “1,” “3,” or “bc1.” It is derived from your Bitcoin wallet and acts as a secure, public-facing destination for receiving BTC. These addresses can also appear as QR codes for easier sharing.
How Bitcoin Addresses Work
Bitcoin wallets generate Bitcoin addresses. A wallet can create multiple unique addresses for better privacy. These addresses come from public keys, which are compressed into shorter, shareable versions using cryptographic processes.
- Private key: Kept secret and used to approve transactions.
- Public key: Shared with others to receive BTC.
- Bitcoin address: A shorter, hashed version of the public key.
The address functions like an email address: you share it to receive BTC. Bitcoin wallets verify addresses with a checksum to ensure they are correct. However, if a valid but incorrect address is used, the funds could go to the wrong recipient.
Types of Wallets for Bitcoin Addresses
You can get a Bitcoin address by using one of the following wallet types:
- Exchange wallets
- Most cryptocurrency exchanges, like Binance or AddUp, provide a Bitcoin address when you create an account.
- While convenient, exchange wallets are best for temporary storage since they are online and vulnerable to hacks.
- Online wallets
- Services like Exodus and Jaxx let you create Bitcoin addresses and store your coins.
- These wallets are easy to use but carry risks because they operate online.
- Offline wallets (recommended)
- Hardware wallets: Devices like Trezor or Ledger provide the safest option. They cost more but offer strong security and support multiple cryptocurrencies.
- Paper wallets: A free option where you print your Bitcoin address and private key on paper. Services like BitAddress.org help you create them.
Offline wallets are more secure since they keep your Bitcoin address and private key offline, reducing the risk of hacks.
How Do I Find out My Bitcoin Address?
Your Bitcoin address is available in your wallet. Most wallets have a “Receive” button that displays your address. Example of a Bitcoin Address
A typical Bitcoin address looks like this:
1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa
This address is safe to share with others, unlike your private key, which must remain confidential. Always use strong passwords and two-factor authentication with your wallet for added security.
How Can I Let People Know What My Bitcoin Address Is?
To share your Bitcoin address, press the “Receive” button in your wallet. Your address will be displayed. Copy the address or share it as a QR code for easier transactions.
Is It Safe to Give Out My Bitcoin Address?
Your Bitcoin address serves for receiving BTC, and thus, it is absolutely safe to give it. For additional security, it is recommended to generate a new address for every new operation. It will reduce the possibility of tracking your financial activities.