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Carteiras/ Wallets What is

Crypto wallet: what’s it, what is it for and how to use it?

A crypto wallet is a wallet where you store, receive and transfer your Bitcoins and altcoins. It is made up of a private key that only the owner can know. And one or more public keys, which can be shared. This wallet can be found as hardware, software or paper […]

If you read the post “What is Bitcoin?“, maybe you are now wondering how to use it. The answer is: through a cryptocurrency wallet!

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We are migrating the Wix site to WordPress for a better experience for our readers. So be patient with poorly formatted texts without images or with crooked images! We will leave everything tidy for you! 😉

What is a crypto wallet?

The cryptocurrency wallet is a wallet where you store, receive and transfer your Bitcoins and altcoins. It is made up of a private key that only the owner can know. And one or more public keys, which can be shared. This wallet can be found as hardware, software or paper. Each model has its usability, but in the end, the mechanism is the same.

I need to highlight here at the beginning of the text that:

  • If you are going to send Bitcoins, send only to a Bitcoin wallet;
  • If you are sending Ethereum, send only to Ethereum wallet;
  • Never send tokens or cryptocurrencies to a wallet that belongs to another Blockchain;
  • If you send Bitcoin to a Litecoin wallet, for example, you will lose all your coins!
Black leather wallet with Bitcoin coins sticking out of it to illustrate a cryptocurrency wallet

How does a Bitcoin wallet work?

The wallet is a way to interact with Blockchain. That is, it is the “bridges” between us and the Blockchain. It consists of a private key and a public key. The combination of these keys reveals the exact location on the Blockchain where the cryptocurrencies or token are.

Private key of a digital currency wallet

The private key of a crypto wallet is the primary key. As if it were the “password” to be able to access the wallet. So it must be a secret that only the owner knows. Anyone with access to the private key, will be able to locate the wallet and transfer the funds to other person.

🚨 Granny WARNING

Do not write down your private key on the computer. Not in an online notepad or in your email box. Much less smartphone apps. Anything that can connect to the Internet can be attacked and stolen! So let go the laziness and write down your private key on paper and keep it in secret very well!

The private key is unique for each wallet and is an alphanumeric code that looks like this:

Private key represented by a secret lock.

e9873D79c6D87DC0FB6a5778633389f4453213303dA61F20Bd67Fc233aA33262

Remember that in the text “What is Blockchain?” I said that before data is written on Blockchain, it needs to be validated? And that this validation occurs through mathematical calculations? It is from this sequence of numbers and letters that your wallet gets the ability to send your Bitcoins to other people. After those calculations, your transaction is validated.

You can also think of your private key as the secret coordinates for locating your Bitcoins. In other words, anyone who knows your private key has complete control over the cryptocurrencies contained there!

Simulation of a key opening the Blockchain, just like the private key of a wallet can find the location of Bitcoins and open the cryptocurrency wallet

What is the private key for?

“Jessica, when am I going to use the private key?”

Well, now that you understand what a private key is, I’ll tell you when you’re going to use it. You understand that you open your wallet with it, right? Anywhere in the world, on any device.

Let’s suppose you have a wallet on your smartphone, which, like me, uses Coinomi, for example. And then, on a beautiful sunny day, your cell phone falls on the toilet (it happens right? 🤷🏻‍♀️). Even more when you are taking that beer on Friday and forget your cell phone on the bar table.

Anyway, lost your smartphone? And your cryptocurrency fortune in the wallet? Lost all your fortune? Didn’t your parents warn you that this Bitcoin business was a bubble? They told you!

Lost your cell phone and now do you lose wallet cryptocurrencies too? How to recover?

Just as Bitcoin is not a bubble, you don’t lose your crypto just because you lost your device! That is, as long as you write down your private key!

In this case, just insert your private key into another wallet, from any device and wait a few minutes. There, your funds will be there again!

The private key is also used to generate your wallet address, which we will now see as the public key.

Crypto wallet address or public key

This address is something that you share with people who want to send you Bitcoins. It’s like your deposit account.

The wallet address is very similar to the private key. But it should not be confused! It is also an alphanumeric address and is usually smaller than the private key. It will look like this (below the QR code):

Binance, the largest exchange in the world. How to find the wallet address

This address is the address of my Binance account. And see that it’s okay to share this public key here on the site. The most that will happen is that you look at my transactions or send me Bitcoins 💁‍♀️

These wallet addresses are generated from the private key. However, there is no way to find your private key just by looking at a wallet address.

In fact, it is often difficult for us to find our own private key. Good! So we don’t run the risk of sending the private key instead of the address!

What is an crypto wallet for?

When I talk about Bitcoin wallets, cryptocurrency wallets, altcoins, virtual or digital currencies, I’m talking about the same thing. After all, the wallet mechanism will be the same for any cryptocurrency!

In short, the main function of the wallet is:

  • Create one or more public addresses;
  • Crypto storage;
  • Send and receive cryptocurrencies by combining and using a private key with a public key (wallet address).

In other words, the cryptocurrency wallet automates the complex cryptography of Bitcoin and other altcoins, for you! That is, it facilitates the use of Blockchain, transforming the computer language into something that humans can understand.

In this tutorial on Coinomi, I explain step by step how to create the wallet, receive crypto, store and send them. So you will see in practice everything I just said here. I even think it should be a text to read along with this one, lol

What is a Hierarchical Deterministic wallet?

Well, let’s agree that having to write down that huge alphanumeric address for your private key is a pain, right? A little letter, an “A” that you miss there… you’re lost! The code must be IDENTICAL!

Also, what if you don’t want to write down the private key but rather memorize it? Think about it, then no one can steal you!

GIF representing the memorization of the private key of a cryptocurrency wallet (brain wallet)

What is the cryptocurrency wallet seed?

As Bitcoin wallets evolved, HD (hierarchical deterministic) wallets were created. HD wallets turn the private key into a string of words. This sequence of words is known as “seed”. Which is just a mnemonic phrase.

“Mne… what?!”

Mnemonic! It is a phrase created with a set of memorization techniques. Exactly to make it easier for you to remember! This seed (wallet seed) is a series of common words that you can memorize instead of the confidential, long and confusing alphanumeric key.

If you’ve tried to create a wallet, you’ve certainly noticed that you’re always asked to save at least 12 random words.

Example of a wallet seed. What is the seed? HD Hierarchical deterministic wallet

Hierarchical Deterministic cryptocurrency wallet addresses

An HD wallet can create many public addresses in the same seed. So even if you have 10 public addresses, all Bitcoins will be within the same private key.

In particular, I love being able to do this division within the portfolio. For example, I create an address where I only store cryptocurrencies that I receive for payment from my customers. At another address, I place virtual currencies that I am doing HODL (I explain this term in this text). In another portfolio, I leave the crypts that will be destined for some project and so on.

Ultimately, all cryptocurrencies are within the same wallet. Just use my seed to open it.

What is an HD (Hierarchical Deterministic wallet) wallet. Private key generates several public keys.

Different types of wallets

Although the mechanism of Bitcoin wallets is similar, there are several types of wallets. I’m creating a unique post for each type of wallet – and a tutorial on security tips as well. Soon, you can click on the links to see new content.

9 types of cryptocurrency wallets

  • SPV – simple payment verification;
  • Hot wallets;
  • Cold wallets;
  • Desktop wallets;
  • Mobile wallets;
  • Paper wallets;
  • Brain wallet;
  • Hardware wallets;
  • Multi-signature wallets.

Soon we will have a post here explaining how to choose the right type of wallet for each profile and situation.

If you have any questions about your cryptocurrency wallet, contact us on social media or right here, in the comments.

This post was written with great love in 2017 and updated with fresh content for you! <3

JG

Categorias
Cryptocurrencies

Do you know what it is the future of Bitcoin?

After posting the article “What is Bitcoin? Complete Guide 2020“, I was left with a doubt. Do people know – or imagine – what the future of Bitcoin is? Have you ever stopped to think about it?

This is a more fundamental analysis. I will talk about the evolution of money over time. The way it was changing. And how we are on the way to change the face of money once again.

People may find it difficult – even impossible – but the future is virtual currencies, yes! Of course it is difficult, there is always a lot of resistance from the most conservative when we want to change their money!

In this text, you will see how it has always been “difficult” to change. And yet, we changed! From seashells to coins today, we’ve changed!

A turn in time

Before you start to understand the future of Bitcoin as money, you need to think … First of all, what is money?

Do you know what money is?

What is money?

In short, money is a way to exchange value! We have used many things like money, ranging from sea shells to precious metals! The most popular money in history was gold. And there are good reasons why gold acts like money:

  1. Gold is rare;
  2. It is scarce;
  3. It is tangible. So, if you have gold in your hand, it’s yours.

Pretty simple isn’t it? And it worked for thousands of years, no matter what the government, king, president or dictator was. The gold just … ruled!

What is Bitcoin? What is Bitcoin for? Guide updated. Bitcoin origin. What is the difference between Bitcoin, cryptocurrencies and altcoin? What is Blockchain? Bitcoin as a form of payment. Bitcoin investment. Holding Bitcoin HODL investment in Bitcoin in the long run. Bitcoin trading Digital money era, will Bitcoin replace money? Decentralization, point to point. The Internet is decentralized. Bitcoin's ledger. What does Bitcoin mean to the world?

From paper money to the future of Bitcoin

And then a new invention came: paper money! Now imagine someone who has used gold as a form of money their entire lives and suddenly hears:

Forget your gold, keep it in a safe that this paper here is the same thing, it’s worth the same! “

It must have been very difficult to convince people to leave the precious stones and start using paper money. That’s because at the time, people didn’t even imagine that in the future, it would be Bitcoin! I even imagine the people of that time:

“Trust paper instead of metal? Are you kidding me, right? It can only be!”

Gold Certificate

Paper money started only as a way of representing gold. For example, the dollar paper was in fact a “gold certificate”. That is, a piece of paper that guarantees your gold reserves. Above all, it ensures that it is kept in a safe in the central treasure.

In other words, we can say that people never trusted paper money. Rather, the government kept their gold and in return, they gave this “gold certificate”.

What is Bitcoin? What is Bitcoin for? Guide updated. Bitcoin origin. What is the difference between Bitcoin, cryptocurrencies and altcoin? What is Blockchain? Bitcoin as a form of payment. Bitcoin investment. Holding Bitcoin HODL investment in Bitcoin in the long run. Bitcoin trading Digital money era, will Bitcoin replace money? Decentralization, peer-to-peer. The Internet is decentralized. Bitcoin's ledger. What does Bitcoin mean to the world?

The introduction of FIAT money

Over time, the US stopped using the “gold standard” during the 1970s. Today, the US dollar is really “fiat” money.

“Whoa, wait a minute! ‘Fiat’ money, but what is this about ‘Fiat’ money?”

“Fiat” is a Latin word for “must be”, which is actually another way of saying:

“Guys, let’s forget about gold. Starting today, this paper you have in your hand is the same as gold. In other words, your paper that says $ 100.00 is really worth $ 100.00, with gold in the safe or not, ok?”

This seems to have worked! Especially because we are using FIAT money every day until today. And we don’t even need to have another type of currency behind it or a precious metal. Fiat money is all the currencies we have today, such as the Dollar, the Euro, the Real, etc.

These days, you have Reais or Euros. However, you don’t need to have gold in the vault to ensure your banknotes have the same value, right?

Advantage of paper money

Fiat money is already a form of digital money. That is, we are seeing numbers, not metals anymore. This makes money much easier to count, manage and move. Banknotes are just to represent money, believe it or not!

What about credit and debit cards? That are so common that we are not even taking notes. We don’t even see the money.

So comes digital money

Money is already digital, many people don’t even remember what a $ 20 bill smells like. But how do banks control it?

The solution that banks use today is a “centralized” solution. That is, they keep a ledger on their computers, which records who owns what. This book makes a record of each operation of each person.

What is Bitcoin? What is Bitcoin for? Guide updated. Bitcoin origin. What is the difference between Bitcoin, cryptocurrencies and altcoin? What is Blockchain? Bitcoin as a form of payment. Bitcoin investment. Holding Bitcoin HODL investment in Bitcoin in the long run. Bitcoin trading Digital money era, will Bitcoin replace money? Decentralization, peer-to-peer. The Internet is decentralized. Bitcoin's ledger. What does Bitcoin mean to the world?

People trust the bank and the bank trusts their machine. Thus, the solution is all in that ledger, inside that bank’s computer.

And Bitcoin? Hey, Bitcoin is DECENTRALIZED!

What is Bitcoin? What is Bitcoin for? Guide updated. Bitcoin origin. What is the difference between Bitcoin, cryptocurrencies and altcoin? What is Blockchain? Bitcoin as a form of payment. Bitcoin investment. Holding Bitcoin HODL investment in Bitcoin in the long run. Bitcoin trading Digital money era, will Bitcoin replace money? Decentralization, peer-to-peer. The Internet is decentralized. Bitcoin's ledger. What does Bitcoin mean to the world?

BITCOIN AND IT’S LEDGER

In 2008, Bitcoin came to claim that a value exists for real. And that it belongs to a person just like banks do – only without having an “owner”. That is: without a bank, without government, without a center.

With his invention, Satoshi showed how you can create a ledger. As long as you don’t have a center or an owner. This ledger for virtual currencies is called: Blockchain. To know more about Blockchain, please read: “What is Blockchain? Explaining this technology“.

This can be confusing or, at best, like Hollywood fiction. How does something that works in thousands of places around the world work at the same time?

You already know the answer to that. And you’re using a solution like this every day, right now to read this text: the Internet. And you didn’t even notice, did you ?!

What is Bitcoin? What is Bitcoin for? Guide updated. Bitcoin origin. What is the difference between Bitcoin, cryptocurrencies and altcoin? What is Blockchain? Bitcoin as a form of payment. Bitcoin investment. Holding Bitcoin HODL investment in Bitcoin in the long run. Bitcoin trading Digital money era, will Bitcoin replace money? Decentralization, peer-to-peer. The Internet is decentralized. Bitcoin's ledger. What does Bitcoin mean to the world?

There are those who find Bitcoin a “madness” or a “bubble” for not having a center or owner. But for these people, suffice it to say that the Internet is like that too. And today we no longer live without our connection.

The Internet is one of the greatest proofs that something distributed and without an owner can work!

WHAT DOES BITCOIN MEAN FOR THE WORLD?

Here, I leave the opinion and vision of Pedro, founder of this site. Your opinion is not about what Bitcoin is, as we already know that. But it’s about what Bitcoin means to the world! And about what the future of Bitcoin will be!


  1. Bitcoin is not geographic. If economies fall or governments change, Bitcoin will not be affected like fiat currencies.
  2. It is also much more user friendly on the Internet, which means that global online commerce can improve.
  3. The biggest point here are the billions of people in Asia, Africa and other places in the world. Who have an internet connection, but who don’t have a bank account or who have horrible banks!

Did you know that more than half of the people in the world do not have a bank account?

In much of Brazil, we can buy online and send money worldwide with the bank. Even though it is very slow and expensive. But in Kenya, for example, people live in great poverty! Banks are not accessible to everyone.

In Argentina and Venezuela, people exchange money on the black market because of inflation! Which makes it impossible to save for a bad day or a nest egg.

Virtual money has no borders. This is what these people need. It works even if your government or banks don’t work.

Bitcoin not only offers a chance to grow the economy, but also in technology. After all, fiat money is just a number in a bank. And it operates in the same way, in the same laws, as it did hundreds of years ago.

Bitcoin was born in the 21st century, which is why it is capable of doing many things. What makes people call Bitcoin “smart money”. And that is why we have “smartphones”! Because they have more features than cell phones a decade ago!


The future of Bitcoin has begun!

We are moving towards the introduction of Bitcoin and cryptocurrencies in the economy. However, people don’t suddenly accept big changes. You have to start putting the news little by little.

Our economy is very old, with very old laws. We need something new. If you think about it, virtual currencies are already being inserted. But as I said, it can’t be all at once!

Take a look at PIX*. Is the Central Bank of Brazil trying to prepare us for digital currencies? You need to create a key to use PIX. It works every day, hour, weekends and holidays, just like the crypto world.

We are being prepared. One change at a time, very small, until we reach the future goal. Then, when everyone is familiar with the PIX, will there not be another change? Like:

“Here we have the cryptocurrency Tether (USDT), which is equal to 1 dollar. You use it just like PIX”.

You see? PIX is a preparation for the future. It is being the middle ground for the future that has started now!

* PIX: in Brazil, it is a new tool for payments and transfers between banks, which works 24/7, even on holidays. Before PIX, all bank transactions were made during business hours, Monday through Friday, except on holidays. This made transactions slow and expensive.

Do you agree with the line of thought of this article? Tell us on social media or here in the comments.

JG