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Learn about how bitcoin wallet works

John Williams

Nov 12, 2020 — 1 min read

It is easy to understand how bitcoin wallet works. Much like a physical wallet, a bitcoin wallet is where you keep your bitcoin. Unlike a physical wallet, a bitcoin wallet is 100% digital, at least for most people.

Bitcoin isn't a currency in the way you might think about the money you use everyday. Bitcoin is a blockchain that allows people to move around information with something called a 'private key'.

When a person says they own Bitcoin, really, what they have is private keys for the Bitcoin blockchain. When these private keys are used, the Bitcoins move from wallet to wallet on the Bitcoin blockchain.

A Bitcoin wallet stores the private keys, and allows a person to use their Bitcoin when they want. Instead of having to do a lot of very technical work, a Bitcoin wallet makes it easy to send and receive Bitcoin. There are many kinds of Bitcoin wallets, and they all have different advantages.

The cheapest kind of Bitcoin wallet is probably a hot wallet that operates on a PC or smartphone. There are loads of these hot wallets out there that are free to download and use. While they are cheap and easy to use, they don't have the security of a hardware wallet, which cost more money to obtain.

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