One of the main tenets of Bitcoin is to be your own bank. Putting this into practice in real life often requires some form of compromise when transitioning from the fiat system where we are so used to letting someone else take care of our financial security for us. For example, many people have to at some point give their money to an exchange like Coinbase when they trade for BTC. During this time their BTC is not under their control, and thus breaking this core tenet. At any time a third party can choose not to give you your funds for whatever reason. Putting your funds into your own private wallet as soon as possible mitigates this risk.
Wallets are easy to set up. I recommend Samourai for Android, Electrum for desktop, and BreadWallet for iOS. Samourai is by far the best wallet out there employing privacy features far and above any other product right now. Their company is also partnering up with another company to release DOJO, an integrated lightning/full node that pairs with their wallet which is super sick and necessary if you truly want to be your own bank. Electrum is also great, has been around a long time and is packed with features for the advanced user. Sadly, iOS has few options as far as I know and BreadWallet is the easiest I’ve encountered.
The important part is security. How do you not screw yourself storing your digital gold? Or better yet, how DO you screw yourself? Understanding the game theory is important to understanding the potential implications of this new technology. The main way people lose bitcoin is they break their phone, or lose their PIN, or lose their backup seed.
The backup seed is given to you when you create your wallet, 12 to 24 words that can be typed in when starting any new wallet and will restore the wallet those words are linked to. Write down these words on a piece of paper, do not store them digitially. Hide a second copy in another trusted party’s house. Laser etch them on a pet tag and screw to a stud. You get it? If you’re buying a large amount of BTC, a Ledger or a Trezor hardware key is the way to go. Always double check receiving addresses vocally with the party you’re transacting with if possible.
How to do a bitcoin transfer:
- Open the bitcoin wallet
- Go to receive
- Copy the address
- Go to Coinbase (or whatever platform you’re sending it from)
- Go to send/withdraw
- Paste the receiving address
- Double check the beginning and end characters in the address in both places before hitting send.
That’s really about it. As long as you got your private wallet backed up, and you double checked the address you were having your bitcoin sent to, you’ll be good to start your foray into owning digital gold.