Create an Online Bitcoin Wallet

A wallet in the realm of bitcoins is equivalent to a bank account. Your wallet is where you receive, store, and send bitcoins. There is essentially two types of bitcoin wallets: a software wallet and a web wallet. Both wallets have their pros and cons, and the decision will depend on your needs for a bit coin wallet.

Steps

Creating a Software Wallet

1. Research your options. The software wallet was the original bitcoin wallet created. There are different types of software wallets. You're in complete control over the security of your coins with the software. The bigger hassles of the software wallet is installing and maintaining it.
   • The block chain is a public database of all the transactions participating in the server. It is used for almost all servers for history and verification purposes.
2. Download the original. Some people claim that the original bitcoin wallet, Bitcoin Core, is the best. It has been scrutinized and evolved since its creation. Visit Bitcoin's website, bitcoin.org, to download the application. This program will work on Mac, PC, and Linux servers. Once you install the software, the bitcoin client will attempt to establish a network and begin downloading the bitcoin block chain.
   • You'll need all the blocks in chain before you can send or receive any transactions.
3. Use alternative wallets. There are plenty of similar wallets that all have their own drawbacks and specific functions. Hive, for example, is only available for Macs and includes an app store that connects to other bitcoin services. Armory is a wallet that is designed specifically for enhanced security.
   • Each have their own installation quirks.
   • Hive is specially designed for beginners.
4. Use a lightweight wallet. There are a few wallets that take up less space on your hard drive. These work at a faster speed because they don't download the entire block chain. Only a small part of the block chain is used at a time, making it faster. Some popular lightweight wallets are Multibit and Electrum.
   • These wallets are less secure than the wallets that require the full chain blocks.

Setting up a Web Wallet

1. Understand web wallets. Web-based wallets store your private keys online on a server controlled by an admin group. Some wallets conveniently link between your mobile and software wallets. You can access this wallet anywhere, making it a popular choice. The website is in charge of your keys and can take your bitcoins out of your control.
   • Many web wallets suffered from security breaches in the past. Be aware of the risks before investing.
2. Pick a web based wallet. There are plenty of wallets that claim security for their customers. Some of the popular servers that have been active for a while now are: Coinbase, Circle, and Xapo.
   • Coinbase operates worldwide and offers exchange services between US and Europe.
   • Circle only lets US citizens to link their bank accounts to deposit money. Debit or credit cards are options for users in other countries.
   • Xapo is a very simple wallet that is easy to use and includes an extra security method called a cold-storage vault.
3. Use an anonymous wallet. The world of bitcoin often draws anonymous users for various reasons. Some of these types of wallets are less secure and don’t offer much in the means of insurance. Dark Wallet operates as a chrome extension and is the most popular anonymous wallet. These types of servers fluctuate in stability for your coins. At any moment the server could become vulnerable to becoming hacked.
   • Some of the features of anonymous wallets are appealing like the fast cash out module.

Using a Hardware Wallet

1. Understand hardware wallets. For those who are overly secure and protective of their finances, a hardware wallet could be for you. Hardware wallets are physical devices that hold private keys electronically and facilitate payments. These wallets can be carried on your person and don’t rely on you keeping funds in a third-party's storage.
   • These wallets are immune to viruses and types of Trojans that infect software wallets.
2. Purchase a hardware wallet. There are many different hardware wallets that range in price range and quality. Take a look at some of the premier hardware wallets:
   • Pi Wallet uses cold storage and does not have wireless capabilities. It uses Armory’s client which makes it secure while not requiring you to set everything up by yourself. This is a safe and easy hardware device.
   • Trezor is similar to Pi, but uses a small screen to interact with. The private keys are generated by the device and can’t leave it, making it immune to malware.
   • USB wallets are pretty popular and more affordable devices. These devices protect your data and use similar micro-processor chips that credit cards use. These typically allow you to go between a variety of computers and your device will establish a secure connection.
3. Encrypt your device. Most devices require an encryption code or password upon initializing. If your device doesn’t, you can always add an encryption to secure your wallet. Each hardware wallet has a different protocol for establishing a secure encryption.

Tips

• Keep your password safe and stored separately from your wallet identifier!
• Always download a backup whenever you login or receive a transaction, and keep it safe.
• A minimum of 0.01 BTC fee is recommended for new transactions.
• If you're tech-savvy, look into building your own hardware wallet.

Warnings

• Do not use bitcoins as a savings account. The currency rate fluctuates too frequently.
• Bitcoin is still in its early years and might not be the best investment.

Related Articles

• Buy Bitcoins
• Use Bitcoin
• Create a Bitcoin Wallet at Blockchain.Info

Sources and Citations

See also

• Use Bitcoin
• Buy Bitcoins
• Mine Bitcoins