The last time Techzim wrote about Bitcoin basics, we got a request from Intrigued asking for a follow up article on ‘how to set up Bitcoin for personal use’. The best way way I figured to attack this is by talking about Bitcoin wallets and most importantly how to set it up.
We briefly talked about wallets in the last article, so will just take it from there. There are 4 main types of Bitcoin wallets; Online, Paper, Software and Hardware wallets.
We will focus on Online wallets which are also known as Web wallets.
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Online wallets as the name suggests, are those that are connected to the internet. Therefore, they can be accessed from any device that has internet connection. While this is an advantage in terms of accessibility, it presents a security issue.
Online wallets are also easy to set up and are often linked with cryptocurrency exchanges and in this case Bitcoin exchanges which makes them easier to access. However, as we all know once something is online, it can be hacked. Also, the problem with such wallets is that they are under the control of the wallet provider which means if anything happens to the website or if it shuts down, you might just lose everything.
Nonetheless, wallets like Mycelium try to counter that problem by giving the wallet owner their private keys. A Bitcoin private key is basically a key (think physical) that allows one to access his/her bitcoin. The key is usually in form of a 256 bit number e.g. 16qY2iLQ7d4MiEkKWYau6mfRNHUGZ3NzHz.
Now I’m sure you’re wondering how some wallets then do it considering how vital the private keys are. Well, with other wallets such as the Blockchain wallet, they give you a wallet to keep track of your Bitcoin, meaning you still can send, receive, sell or buy Bitcoin but not necessarily the full access. This means that you will always need them (the wallet provider) to access your Bitcoins hence the disadvantages I mentioned earlier of losing everything if the wallet fails.
Now that we have an idea of what a wallet is, let’s learn how one can install and use it. We will just focus on one wallet for now, the Mycelium Bitcoin Wallet. I’ll explain how to get it on Google Play Store only for now because I don’t have access to an Apple device. (and yes I didn’t mention Windows Store for a reason – you can choose whatever you want to do with the pun).
Here are the steps to follow:
Launch Google Play Store
Search for Mycelium Bitcoin Wallet and install
Open the installed app
Select create a new wallet
Go to Settings and select backup
Get a pen and a piece of paper then click Master seed backup
Start verification (follow instructions there)
Select Set pin code and enter your 6 digit pin
Now that you’ve set your account, you can now scroll through the app and familiarise yourself with the wallet. To send, receive, buy or sell Bitcoin, tap on balance tab then select the action of your choice.
Just in case you need this:
To Receive: Select receive. Now depending on where you’re receiving the Bitcoin from, if the sender is within your vicinity, you can either scan the QR code or just call out the number (address) shown on your screen. If they are not close by, then you can either select copy to clipboard, then paste and send it to sender or select share address via then choose your method of preference.
To Send: Select send. Now, you can either choose to Scan QR code or to manual enter the address. Before entering the amount be sure that you select the correct option between USD and BTC (bitcoin) though it will likely be obvious once you enter the amount. You can choose by taping USD or BTC sign on the top right corner of your phone.
Also, you need to select the miner fee which is the transaction fee. The miner fee is determined by the speed at which the Bitcoin gets to the recipient. The faster you want it to to be transferred, the higher the charge. So it’s a trade-off between time and cost.
I believe it’s a learn as you go process, however, if you encounter any challenges feel free to reach out to us… till then, happy transacting!