How to Create a Bitcoin Wallet: a Beginner's Guide

Bitcoin is the first and foremost cryptocurrency. It has several essential characteristics that have made it so popular. First of all, bitcoin provides high anonymity. It is almost impossible to track who exactly carried out a financial transaction with this digital currency. In addition, bitcoin is a decentralized currency. It does not have a single emission center and is not issued by any national or interstate financial regulatory body. The maximum possible amount is 21 million coins. Narrow emission is one of the price growth factors.

Cryptocurrency cannot be arrested or debited from the account without the client's consent by a court decision. Furthermore, digital assets do not physically exist. Thus, if somebody moves from one country to another, their cryptocurrency will be stored in the wallet, and they can use it anywhere in the world.

However, there are also important nuances that are important to be aware of. For example, in the event of a technical failure, the only opportunity to remedy the situation is to contact the management of the cryptocurrency exchange or exchanger that made the transaction. There is no technical support for Bitcoin itself. If you are hacked, and your money is stolen, you will not be able to file a complaint with law enforcement. However, the advantages of bitcoin are still more significant, which is why millions of people worldwide want to register a bitcoin wallet and use the cryptocurrency for payments or investments to make a profit. Next, we will consider the main ways to store cryptocurrency and discuss each method's pros and cons.

A desktop wallet is a wallet that is installed on a PC or laptop. Its main advantage is a high degree of protection. The cryptocurrency that is stored in this type of wallet is located directly on the computer. This makes stealing more complicated because each wallet generates the private key separately. However, there are nuances. Dealing with such a wallet can be difficult.

Firstly, a computer must have an SSD drive to use this storage method. An HDD-type hard drive is not suitable since it processes information much longer. The speed of work for a desktop wallet is critical, given a large amount of data. Accordingly, it is necessary to use SSD drives.

Secondly, installing a desktop wallet actually means downloading the bitcoin blockchain. Some wallets can control the amount of downloaded information. For example, if you set a limit of 10 GB, the blockchain will be constantly overwritten in the amount of strictly 10 GB, no more. It is also important to know that it is possible to transfer information to any storage device, such as a USB flash drive.

To open such a wallet, you need to:

• Go to bitcoin.org to download wallet software (for example, Bitcoin Core).

• Download transactions (in whole or within the limit).

• Open the Wallet.dat file.

• Make a setting.

Before starting a desktop-type bitcoin wallet, you should decide which one suits you best. There are many applications, but Bitcoin Core remains the best option.

Before opening a bitcoin wallet online, it is crucial to know its features. It is not as secure as a desktop wallet. There is a risk that the wallet can be hacked, which means losing the cryptocurrency. History already knows the stories of hacking wallets and crypto exchanges, so the client needs to weigh all the risks before registering this type of cryptocurrency account.

Online wallets have simple features and are very easy to open. This can be done on any cryptocurrency exchange or by choosing a browser extension or a mobile wallet. No fee is charged for registration. To open a wallet on the exchange, you need:

• Go on the website.

• Pass verification.

• Select bitcoin in the list of cryptocurrencies and open an account.

After that, you can use your wallet. Although registration takes a little time, as a standard, you can open a wallet in just a few minutes. It can also be quickly replenished by buying cryptocurrency on the exchange.

In the case of a mobile online wallet, everything is even more straightforward: select the appropriate application, download it, and create an address. Immediately after that, you get a a bitcoin wallet that can replenish.

However, the key aspect in the case of online wallets is security. Are you ready to entrust your money to a crypto exchange or a mobile wallet? To some extent, two-factor authentication will help minimize the risks. You can generate a unique code using Google Authenticator or another program confirming that you are the wallet owner or use  SMS codes or email confirmation. The more security measures you use, the better. Before opening a bitcoin wallet, the manual must be studied in detail. So you can learn about the main protection methods provided by a particular crypto exchange, mobile or browser wallet.

Another way to store cryptocurrencies is through hardware wallets. Such a wallet is a particular device that looks like a flash drive. It stores all the data about your funds. A hardware wallet is the most secure option as it is not connected to the internet. Therefore, it is almost impossible to hack it or intercept a transaction. To conduct a financial transaction, you must enter a pin code; without it, transactions are impossible. The owner keeps part of the private key, and the second part is generated automatically. This provides additional protection for cryptocurrencies in such a wallet.

It is convenient to use such a wallet. All digital assets will be stored on the device. Even if you lose your hardware wallet, you won't lose your cryptocurrency. It is enough to buy a new device and specify the private key. Since the key to the previous device is unknown to anyone, it is impossible to steal cryptocurrency from there.

Instructions for creating a crypto wallet differ depending on which device you are using. For example, it can be Ledger, Trezor, CoolWallet, and others. Consider registration using the Ledger Nano S wallet as an example:

• Connect your wallet to your computer via a USB port. Wait for Configure as New Device to appear on the wallet screen. Then press the right button on the device to confirm.

• Set a pin code. It can be from 4 to 8 digits. To do this, use the left and right buttons. When the pin code is entered, you need to press two buttons simultaneously to save it.

• Code phrase. The wallet automatically generates a 24-word passphrase. It must be written down on paper. Scroll through the words with the left and right buttons.

After that, the wallet will be ready for usage. After that, you just need to replenish your account. The only drawback of a hardware wallet is that such a device must be purchased separately at a reasonably high cost.

When choosing a wallet for cryptocurrencies, decide how much you plan to store. If this is a small amount, you can choose an online wallet. This is a good option if you plan to trade cryptocurrencies, buy/sell bitcoins, or exchange for other types of coins.

If you are planning an impressive investment but are not ready to spend money on expensive equipment, a desktop wallet will be a suitable option. It will provide sufficient protection against possible hacking and theft, although it is more difficult to use.

A hardware wallet will be the best solution for investors who plan to store vast amounts of bitcoin. Mainly it is a good option if you want only to hold cryptocurrency but not trade or withdraw coins from your account. In this case, a hardware wallet will provide maximum protection and safety for your funds.

One way or another, the choice is yours. However, before opening a bitcoin wallet, we advise you to study the security issue, connect all available means of additional verification, and do not download applications from dubious sources.