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To create a Bitcoin Wallet, you need to install a secure mobile or desktop app or buy a hardware wallet, and then create a new account. The most important step is to safely write down and store your 12-24 word recovery phrase, as it gives you access to your assets.
Bitcoin and BTC: What Is the Difference?
Although Bitcoin and BTC are often used as the same thing, there is a small difference between them. Bitcoin refers to the entire ecosystem: the technology, decentralization principles, blockchain network, and community. BTC, on the other hand, is the ticker symbol for the currency within this system. Simply put, Bitcoin is the broader world, while BTC is the currency you use within it. To manage BTC and interact with the Bitcoin blockchain, you will need a Bitcoin Wallet.
What Is a Bitcoin Wallet?
A Bitcoin Wallet is an app or device that helps you manage your Bitcoins (BTC). Simply put, it’s your personal digital wallet that holds cryptocurrency instead of traditional money. A wallet makes it easy to store, send, and receive Bitcoins while keeping your crypto secure.
How a Bitcoin Wallet Works
A BTC Wallet does not store your coins. Instead, it manages public and private keys that give you access to your funds and let you send transactions through the blockchain (a shared digital system where all transfers are recorded). The public key is used to receive BTC, while the private key is used to confirm transactions and control your assets.
If you lose your recovery phrase or private key, you won’t be able to regain access to your Bitcoin. It’s crucial to store this information securely to protect your assets.
Public and private keys of a Bitcoin Wallet. Source: bitcoinmagazine.com
How to Store Bitcoin
To store Bitcoin safely, you need a secure wallet that lets you hold, send, and receive BTC. The right wallet depends on your needs, whether you care more about convenience, frequent access, or maximum security. Each type of wallet has its own features for different purposes. Let’s look at the main options to help you choose the best way to store your Bitcoin.
Types of Bitcoin Wallets
Bitcoin Wallets can be divided into two main types: custodial and self-custody wallets. These differ in who controls access to your crypto and the level of security provided.
1. Custodial Wallets
Custodial cryptocurrency wallets look like regular apps and are available on iOS, Android, and desktop. They support many blockchains, making them a convenient option for storing different cryptocurrencies. These wallets are easy to use for daily transactions and provide quick access to your assets. Plus, recovering access becomes much easier if you ever lose it.
However, this convenience comes with a cost. When using a custodial wallet, you give control of your private keys to the service provider. This means a third party, rather than you, manages your assets. Many platforms also ask for personal information, such as your ID or passport, which can compromise your privacy. Additionally, there is always a risk that the platform may not be trustworthy or could be hacked, putting your assets at risk.
2. Self-Custody Wallets
Self-custody wallets offer freedom and independence in the crypto world. They give you full control over your assets, without intermediaries or third-party services. Only you manage your private keys and make decisions. These wallets are divided into hot and cold types, each with its own unique advantages.
Hot Self-Custody Wallets
Hot self-custody wallets, like Gem Wallet, offer the perfect balance between convenience and security. Learn more about the advantages of using an open-source crypto wallet. These wallets are ideal for everyday use and for anyone who values independence in managing their crypto assets. With just a few clicks, you can download the wallet and take full control of your BTC and other cryptocurrencies anytime.
Benefits of hot self-custody wallets:
You are the sole owner of your assets, meaning no one can freeze or take your BTC.
There’s no need to share personal information, keeping your transactions private.
The user-friendly interface lets you send and receive crypto quickly, anytime.
You’re not tied to any platform - only you control your funds and decide how to use them.
With a self-custody wallet, only you decide the fate of your Bitcoin, and your assets are fully protected from outside interference.
Cold Self-Custody Wallets
Cold wallets are ideal for those who prioritize security. They operate offline, protecting your crypto assets from viruses, hackers, and other online threats. This makes them a great option for long-term storage of large amounts of Bitcoin.
However, this level of protection comes at a cost. Cold wallets are less convenient for everyday use, require time to set up, and hardware wallets can be expensive. Paper wallets are a simpler option, but they need to be stored carefully to avoid losing access to your assets.
Cold wallets are a solution for those willing to accept these trade-offs to ensure the security of their cryptocurrency.
How to Create a Bitcoin Wallet
After selecting the right type of wallet, the next step is its creation. The process is simple and includes a few easy steps:
Create a Bitcoin Wallet: Download Bitcoin Wallet for iOS or Android from the official website or app store.
Set Up Bitcoin Wallet: Open the app and carefully follow the on-screen instructions, paying special attention to security-related steps.
Save the Recovery Phrase: Write down the recovery phrase provided by the wallet and store it in a safe place. It is essential for regaining access to your wallet if you lose your device or forget your password.
Create a Password: Protect your wallet with a unique and secure password.
Generate a Public Address: Use the wallet to create a public address for receiving Bitcoin. This address can be safely shared with others.
Seed phrase confirmation process and Bitcoin Wallet interface. Source: Gem Wallet
When you’ve finished setting up your Bitcoin Wallet, secured your recovery phrase, and created a strong password, you’re ready to start using it. The next logical step is to add Bitcoin to your wallet balance so you can take advantage of its features and functionality.
How to Obtain BTC
There are several simple and convenient ways to get Bitcoin, depending on your situation:
Buying Inside Your Wallet: The easiest option, allowing you to purchase Bitcoin directly in the app. For example, Gem Wallet lets you buy crypto using a credit card. This automated process is fast, reduces the risk of mistakes, and is especially convenient for beginners.
Transferring From an Exchange: You can send BTC from your exchange account to your personal Bitcoin address.
Receiving From Other Users: You can get Bitcoin from friends, partners, or clients.
Buy and receive Bitcoin. Source: Gem Wallet
How to Swap Bitcoin
To swap BTC for another cryptocurrency (such as USDT, SOL, BNB, etc.), open the Swap feature in your wallet, select Bitcoin, choose the currency you want, and confirm the transaction. The swap is processed automatically through the built-in DEX aggregator inside Gem Wallet and usually takes only a few minutes. After that, you can use your new assets for investing, trading, or staking to earn passive income and manage your portfolio more easily.
Now that you’ve learned how to manage Bitcoin, you’re ready to make the most of your cryptocurrency wallet. It’s a reliable tool that simplifies managing digital assets, making their use convenient and secure. Confidently take control of your cryptocurrency and unlock new possibilities with your Bitcoin Wallet!
