INTRODUCTION TO BITCOINS.
A bitcoin wallet is the same as a personal bank account. This wallet helps you to buy bitcoins, receive them and store them for future use e.g. sending to others. In regards to bitcoins we have two major types of wallets. This include:
• Hosted Wallet/Web wallet – This are the easiest to use. This kind of wallet is normally hosted by a third party. However, for this kind of wallets you have to have choose the best provider in terms of maintaining security of your coins. E.g. coinbase.
• Software Wallet – This gives you total control over your coins and their security. Its referred to as software wallet as you will have to install it on your phone/tablet or a computer.
HOW TO SET UP A BITCOIN ACCOUNT.
In this article we shall use Coinbase as our main source of reference. A coinbase bitcoin wallet is easy to setup. The first thing you will do is visit they main website. Then follow this three simple steps.
1. Sign Up: This will be a step by step guided sign up. You will be required to create a digital currency wallet. This wallet will help you store your digital currency securely.
2. Link your Bank Account:The second step is linking your bank account, credit card or debit card to your bitcoin wallet. This will help you exchange digital currency in and out of your local currencies.
3. Purchase Bitcoins.The final step is buying bitcoins and ethereum and you are good to go.
STEPS TO FOLLOW IN SECURING YOUR WALLET.
After setting up your wallet, the next main challenge is ensuring the safety of your bitcoins. It is always your responsibility to choose wisely good security measures. We have discussed some of the measures to follow below.
a) Keep small amounts of bitcoins in your wallet.Just like a normal wallet, it is always advisable to keep only what you might need for a day and keep the rest in a safer place. This will greatly help in avoiding huge losses in case your account is breached.
b) Backup your Wallet.You should always backup your bitcoin wallet. This greatly helps when your mobile or computer is stolen or broken down as you will be able to recover your wallet from the back up. Always ensure you do regular backs and store them in safe locations.
c) Encrypt your wallet.Encrypting your wallet helps you set strong passwords which will be needed when withdrawing your funds. This will help in keeping at bay thieves. Always use strong passwords and never forget your password.
d) Use the Multi-signature feature.This is a feature that requires a transaction multiple independent approvals. This helps to protect against theft as no one person will be able to withdraw the money.
e) Always keep your software up to date.Keeping your software to date, helps you to have important updates on bug fixes and security fixes. You will also get access to new features helping you keep your wallet safe.