How are Bitcoins stored? This is one of the first questions people new to Bitcoin ask. Bitcoins are stored in digital wallets that you have access to and no one else. This is similar to carrying around a wallet in your back pocket. Your everyday wallet lets you carry cash more efficiently than having a wad of money in your pocket.
Bitcoin wallets are cryptographically protected to allow you to store your Bitcoin on your phone, on a hardware wallet, or even on a piece of paper!
Bitcoin wallets come in two styles. Hot or cold. Let me break down the difference real quick.
A hot wallet is a Bitcoin wallet that is always connected to the internet. Bitcoin wallet apps can be found in your favorite app stores, web browser, or desktop. These wallets are typically geared towards ease of use. Hot wallets allow you quick access to your Bitcoin on the go. Hot wallets are ideal for spending small amounts of Bitcoin but may not be suitable for storing large amounts of your wealth on a hot wallet. Here are a few wallets I recommend using for people new to Bitcoin.
Having a large amount of your Bitcoin wallet connected to the internet 24/7 could increase the chance of being targeted by people who want to steal your Bitcoin. The likelihood is very low but never say never these days. This brings me to your next option.
On the other hand, a cold wallet is a hardware device that stores your Bitcoin offline and is not connected to the internet. This makes your Bitcoin impossible to steal and is an excellent way to securely store large amounts of Bitcoin. There are plenty of options to choose from, each with its pros and cons. I would suggest going with a company that has a solid reputation and several years in the industry to be on the safe side. Check out what these companies have to offer:
Once you understand how to store your Bitcoin safely, it is not as scary as it may seem. Adopting this new form of many will take time, but I am confident that we can do it and create a better world from the ashes of fiat currency!