It’s no secret that cryptocurrencies are the rage nowadays. People are getting more interested in the idea of digital money as a common financial asset. There are plenty of cryptocurrencies available and one of the most popular ones is Bitcoin.
Since more and more people want to become Bitcoin traders, they’re seeking different ways to learn that skill. Naturally, there are plenty of articles online that cover the basics of Bitcoin trading. Moreover, there are Bitcoin trading simulator apps that help them get a feel of the market. Some of them even reward skilled traders with actual Bitcoins.
Regardless if you’re new to Bitcoin trading or you’ve already mastered the basics, you’ll have heard of the term Bitcoin wallet. This is an important aspect to know when you’re learning how to trade Bitcoin. So what is a Bitcoin wallet?
Bitcoin Wallets Explained
A Bitcoin wallet is pretty similar to an actual wallet. In other words, you use your wallet to store your money in the form of banknotes, coins, and credit cards. Similarly to this, a Bitcoin wallet lets you store your Bitcoins.
Another function of this wallet is to validate any transactions you make. Thanks to a private key or seed, the wallet can validate the transactions so you can use your Bitcoin to make a purchase or exchange it for another asset. That private key also works as a security measure.
Only you have access to it and no one else can access it. Besides a private, there’s also a public key. You can share this key with anyone and use it to receive money. These two keys are an important part of your Bitcoin wallet.
Similarly to the number of cryptocurrencies, there’s a variety of wallets you can use. This goes for the Bitcoin trading apps as well. In other words, you can trade with a variety of apps. You can choose to trade with Bitcoin Champion of all the other apps. All you need to do is make your account and deposit the minimum amount. You’re set with just two steps and you can rely on the advanced algorithm to do the trading for you.
How Do Bitcoin Wallets Work
As you know, Bitcoin is based on blockchain technology. The blockchain serves as a public ledger where all the transactions are kept. For a transaction to occur there must be an exchange of values between 2 or more Bitcoin wallets.
During a transaction, one party is exchanging a certain value of Bitcoin for a service or asset another party’s offering. So every Bitcoin wallet in the transaction uses their private keys to validate the transaction which also enables proof of it.
There are lots of Bitcoin wallets available. You can choose the one that suits your needs best. Depending on the type of wallet you choose, you will be able to get it for free or pay a certain sum of money. However, the majority of Bitcoin wallets are free so you don’t have to worry about the price.
Additionally, you have to pay a certain fee for making a transaction. The amount of that fee will depend on the transaction and the type of wallet you’re using. Another thing you can use your wallet for is selling your Bitcoin for any fiat currency.
To do so you can rely on a crypto exchange to find a buyer that will help you convert your Bitcoin to cash. Once this happens you’ll need to transfer the money to your bank account. The type of Bitcoin wallet you’re using plays a key role here. That’s because different wallets have different time periods and rules for making such transfers. Usually, this period is between 1 and 3 days after the sale.
Now that you know what Bitcoin wallets are and how they work, you can go down the rabbit hole and explore other important aspects of Bitcoin trading.