What is a bitcoin wallet public key? How do I get a bitcoin public key?
Getting started with Bitcoin may seem a bit overwhelming if you are someone who worries about the security of your money. Or maybe, you just don't know where to begin. It is common for new users to feel a certain level of anxiety at first. If you are in that headspace, don't worry! It is totally understandable, but more importantly, it's easier to overcome than you may feel. There's a whole lot of information out there about Bitcoin and it can be hard to put time aside to sift through it all. One of the first questions you probably asked yourself was, "How much of this do I need to know to get started?" The answer: less than you think.
You do not need to be a numbers whiz to understand the fundamentals of cryptocurrency usage. There are a few important buzzwords that you'll need to know if you are going to get started successfully. By the end of this article, I will have laid out the interworkings of
- private keys (private addresses)
- public keys (public addresses)
- how to safely store and use your Bitcoin with Bitcoin wallets
The ability to maintain ownership of your coins securely is one of Bitcoin's biggest draws. It may even be the reason you began this venture. So, how do you keep your Bitcoin Account safe? Before I answer that, I am going to break down a few basic principles and make a key distinction between having and owning Bitcoins.
Think of your Bitcoin account as an email address, as it functions very similarly in the sense that sending and receiving Bitcoins is like sending and receiving emails.
First, I'll explain private addresses and public addresses. These are also referred to as private keys and public keys. Each serves its purpose in the world of Bitcoin.
Private Key/Address: "Key" and "Address" are interchangeable here. They are one in the same. Your private key is comparable to a password to an email address that you use to receive and send Bitcoin. It is a combination of 64 characters which are made up of numbers 1–9 and letters A-Z. This combination acts as a code that allows you to prove that you own the address. Think of this as your Gmail password.
Public Key/Address: Your public address, or key, is your account identifier on the blockchain. It is unique to you, but it can be seen by anyone if they look it up with a block explorer. Hence the name, public key.
The stigma surrounding bitcoin as this shady, anonymous online way of hiding money begins to fall apart once you begin to learn more about it. Anyone can view your address whenever they want. It is not hidden, people are just unaware of how accessible user information is.
However, this is where the Private Key comes in. Without this, your address is pretty much useless, as you need your code (think Gmail password) to confirm that you are the owner of the account/bitcoin. If you cannot confirm ownership, good luck sending or receiving any payments. This means keeping your Private Key safe should be one of your top priorities. If someone gains access to that, they can access your Bitcoin.
How do I Keep my Private Key Secure?
For the sake of keeping things simple, keep in mind the comparison of your Bitcoin account as an email address.
Setting up a Bitcoin Wallet is the first step in securing your private key, as keys (think email passwords) are not stored on the Bitcoin Network. Keys are created and kept by the software of whichever Bitcoin wallet you choose. To not overcomplicate things, think of the wallet as whichever email client you prefer (Outlook, Gmail, Yahoo, etc.) The wallet is a third party that can be of your choosing that will generate your private key.
Keep in mind that wallets have different levels of security and some are safer to use than others. There are a couple of roads you can go down:
The first being that you outsource the protection of your Private Key to someone else to store and guard. This would be referred to as a "Custodial Wallet." Think of this as you giving money to your bank to hold. It is still yours, but they are in possession of it.
Here are several examples of Custodial Exchanges. These are companies that provide a wallet for you to store your coin on their platform.
Bitfinex - considered to be one of the biggest cryptocurrency-related companies. However, in 2016 they lost roughly 120,000 user coins which they, in turn, had to provide compensation for.
Bithumb - is out of South Korea, and they support 10 other currencies including bitcoin. While it was a major leader in the volume of trades per day, it also suffered a major hack in 2017 similar to what happened with Bitfinex.
Coinbase - is the largest exchange when it comes to trading cryptocurrencies. Luckily for them, they have not had any major hacking incidents.
Mt.Gox - gained its infamy in the crypto-exchange world by being one of the first to open and for being highly susceptible to hacking. They lost roughly $8 million in user coin.
The second allows the user to be in possession of their funds. This is referred to as a "Non-Custodial Wallet." There are mobile, web, desktop, hardware, and paper wallets. The custodial wallets can be broken down into these types as well, the only difference being who is in possession of the coin. Finding a reliable one can be tough as there are many links that will try to scam you. I'd advise visiting either the company website or the app store to find a proper download link to avoid any of that nonsense.
Here are just a few examples of Non-Custodial Wallets that I'd recommend:
Bitgo - is a leading company in the cryptocurrency world and offers a number of services to its clients. They pride themselves on the security of their systems and strive to "deliver trust in digital assets."
DropBit - In the top 5 as a global leader for cryptocurrency wallets they allow users to send cryptocurrency to one another using phone numbers and twitter handles. You can purchase Bitcoin on the Dropbit platform, although they only support Bitcoin.
Coinpay - is a company out of the U.S. that functions as a mobile wallet that allows the user to transfer Bitcoin in the same fashion that a Venmo user transfers money. They are trusted in over 45 countries worldwide and are an easy way to get started and acquainted with the world of crypto. They sell Bitcoin and Ethereum and also provide support for other coins as well.
Guarda - is a wallet that caters to over 45 cryptocurrencies. They are a well-established wallet with a solid background in providing secure ways to spend, send, receive, and sell your digital funds.
Owning Vs Having
The distinction I wanted to make between having and owning Bitcoin is in reference to who stores your Private Key. It is Non-custodial vs. Custodial Wallets. Whoever is guarding the Key is technically the owner because they are the ones with access to the account. There are third parties that can properly store your Private Key securely, but they can quickly become targets for hackers. If your Private Key is stolen, all of your Bitcoins will be gone. This can be a scary reality, but there are measures you can take to eliminate some of the risks.
I have found though that it can be reassuring to be in control of your own Private Key. When you give the third party control of your Key, they become the owner of it. This does not mean they have control over your account, it only means that they give you the password (your key) to your account anytime you are trying to access it.
Making a decision on which wallet to choose comes down to preference and who you trust to watch over your funds. Once you've selected which wallet to use you are ready to set up your account. Once that's done, you'll be assigned your Private Key for your Public Address. Whichever wallet you choose will determine how that private key is stored, so it is important to keep that in mind as you move forward.