Bitcoin Wallets

What Is A Bitcoin Wallet? – The Best Explanation EVER

[Music] so a Bitcoin wallet is a piece of software that you use to communicate with the Bitcoin network and then you can tell the Bitcoin network when you want to send and receive transactions now the best way to understand a Bitcoin wallet is by comparing it to email once you’ve set up an email address you need some kind of software to allow you to send a receive emails to that new address now this software may be an app on your phone it may be an app on your laptop or it could even be an app online that you log into now with email you enter the username and the password for your email address and you enter that into the app and that’s how the internet knows that it is really you that wants to send and receive emails to that address now of course you tell everybody the email address and you have to do that in order for anyone to be able to send you a message but just because someone knows your email address that doesn’t allow them to send email from that address does it if they could that would be bad because then they could send emails pretending to be you and cause all kinds of problems in order to be allowed to send email from a particular email address you have to know the password and if someone finds out your email password then there’s nothing stopping them from logging into your email app and then sending messages and this is very similar to how Bitcoin wallets work every Bitcoin account has two elements to it one of them is called your public address which is kind of like your email address and one of them is called your private key which is like your password so just like email you can give anyone your Bitcoin public address and then anyone anywhere in the world can send you some Bitcoin they don’t need to know anything else about you all they need to know is the public address and they can send the money to you now your Bitcoin private key on the other hand is the one thing that you must protect it’s called your private key for a reason because you should never reveal this to anybody now if someone gets your email password that’s pretty bad because they can start sending emails from your address but that’s not quite as bad as someone getting your Bitcoin private key because they can actually then steal all of your bitcoins by sending them somewhere else and just like email once a Bitcoin transaction had been sent it’s a one-way trip the only way to get it back will be for that person to send it back to you voluntarily so Bitcoin literally works like digital cash once you’ve handed over the Bitcoin belongs to that other person and the same goes when you receive Bitcoin if someone sends it to you it’s yours and no one can take it away from you the only way they could do that is if they knew your private key and of course now you know never to give this or reveal it to anyone you

Facebook Comments