When you create your Bitcoin wallet, a seed is created. Seeds are displayed in the form of a series of words, known as a mnemonic phrase. This seed is used to derive every individual Bitcoin key that you’ll use to send and receive bitcoin. You should never share this seed with unknown parties.
This design is known as a Hierarchical Deterministic (HD) framework, which is an industry standard for Bitcoin key generation and management.
Note that a bitcoin exchange is different from a bitcoin wallet. While the former offers a platform through which bitcoin buyers and sellers can transact with each other, the latter is simply a digital storage service for bitcoin holders to store their coins securely. To be more technical, bitcoin wallets store private keys which are used…
As with physical wallets, Bitcoin wallets come in a range of styles, each offering a tradeoff between convenient access and security against theft. Mobile Mobile wallets, like WazirX multi-cryptocurrency wallet and Exodus bitcoin wallet are those that run as apps on phones, tablets and other mobile devices. Web Web-based wallets, like Guarda Bitcoin Wallet, store…
Public keys are often conflated with addresses. An address is derived directly from a public key through a hashing algorithm, and almost all wallets and transactions will display addresses rather than public keys. Behind every address is a public key. Addresses are shorter than public keys, and usually begin with a ‘1’, ‘3’, or ‘bc1’,…
As long as a user knows their recovery seed, typically a 12- or 24-word list that was initialized with their wallet, they will always be able to restore their wallet. A wallet will store many addresses and private keys as you send and receive bitcoin, but you only need to backup your wallet once. Because…
Physical Bitcoin coins tend to be preloaded with a fixed amount of BTC with the intention that its value cannot be spent as long as the private key remains hidden. This is usually achieved by using a tamper-evident seal. The first of its kind, Bitbill, was shaped like a credit card, but most alternatives that followed were…
Bitcoin wallets are lightweight pieces of software, and they do not usually store the entire blockchain. Thus, in order to keep track of a user’s balance and inform them of their transaction statuses, a Bitcoin wallet must query the blockchain. Some wallets query central servers run by the wallet provider, but the best wallets allow…
