You’ve just bought Bitcoin. What now?
Now that you have purchased your first bitcoin it’s a good time to review exactly what you’ve just bought, and how to safely store it.
To begin, consider that while it’s easier to think about a bitcoin as an object existing somewhere in cyberspace, this is not exactly the case. It’s more like a balance in an account, known as a wallet. The list of all wallets and their balances is called the blockchain.
Wallets can be thought of as the basic structure of Bitcoin. If you control a wallet, no one can take it away from you without your permission. It is the most secure way to hold a currency or asset in history. Controlling a wallet takes some work and knowledge, but as a Bitcoin user the option is always there for you.
An easier method for new users would be to trust a company like us to hold them for you. Here’s how that works.
You just bought bitcoin through Blockchain.com, or some other provider. That means you have an account with the service you used, and they show you the balance of bitcoins you have.
You own these coins, and we will be happy to send them wherever you like. But it is important to remember that we are holding your coins for you. You trust us. The wallet on the bitcoin blockchain that controls these coins is controlled by us, not you. When you ask us to send your coins somewhere, we make a transaction on the Bitcoin blockchain on your behalf.
Sound familiar? This is similar to how the financial system has worked for ages. You trust the bank to hold your money and when you make a payment you are authorizing them to move it on your behalf.
With Bitcoin however, the revolutionary concept of self-custody becomes possible. The tools are available to you, through longtime trusted services like Blockchain.com, to actually create your own wallet address on the Bitcoin blockchain that you and you alone control.
If you do this, you don’t have to trust anyone, not even us, to keep your bitcoin safer than you can.
You could have 100% control of when and where your bitcoin moves. You can sleep tight knowing that no matter what happens to any cryptocurrency company, you will always have access to your bitcoin. That advantage comes with risks. You could improperly secure your wallet. If that happens and you lose your bitcoin, there is no recourse. In other words, this is an advanced concept but it is worth learning.
There are many factors that go into cryptocurrency storage decisions. There is an ever growing set of standards and practices for securing cryptocurrency that can get as extreme as vaults built into mountains in Switzerland. Or as simple as a private key wallet made through Blockchain.com.
It’s up to you to learn what solution works best for you.
Don’t have a Blockchain.com Wallet yet? Create one today at blockchain.com/signup.