Even in 2022, Bitcoin is still one of the most popular cryptocurrencies. As its popularity has grown over the years, so has its value. As a result, investors worldwide have wanted to own a fraction of Bitcoin for themselves.
While it is certainly too late for most people to try to mine Bitcoin today, you can still trade it and try to make a profit. Investing in cryptocurrencies isn’t the same as purchasing stocks from your broker. All cryptocurrencies are a part of their blockchains and therefore need a crypto wallet for purchasing and storing them.
What is a Blockchain?
In simple words, a blockchain is a digital ledger shared among various computers connected to a network. It stores information such as transaction records to allow decentralized currencies to function easily.
What separates a blockchain from an ordinary database is that it stores information in various blocks that hold information linked to the block before them. This creates an irreversible chain of information that allows for a decentralized information storage system.
How Does a Crypto Wallet Work?
Since cryptocurrencies are a part of a blockchain, they cannot be stored in anyone’s crypto wallet. All that exists in your crypto wallet are the encryption and decryption keys that connect to the blockchain to show the record of your owned currency.
For instance, when you receive Bitcoin from someone, you’re really receiving access to a signature that says the Bitcoin belongs to your wallet. If you lose access to your wallet, you also permanently lose your cryptocurrencies.
How to Create a Crypto Wallet?
To create a trustworthy online bitcoin wallet, you first need to decide the kind of cryptocurrency wallet you need. We suggest going for an open-source bitcoin wallet since these are usually more secure and reliable than corporate ones. Once you’ve chosen the wallet you want, follow the following steps:
- Create an account by following the procedure on the screen. We recommend creating a new email address for this since the chances of getting hacked would be reduced.
- After setting up your account, you must launch the wallet.
- Once your wallet is launched, visit the crypto exchange of your choice to purchase a fraction of Bitcoin. Coinbase and eToro are popular crypto exchanges.
- Create an account with the exchange and link it to your crypto wallet. Once you’ve linked them, you can buy and sell Bitcoin whenever you desire.
While it is easy to create a Bitcoin wallet, it is important to choose a trustable one. Doing so will help ensure the safety of your Bitcoin and prevent loss from hacks in the future.