Using Bitcoin

Using bitcoin

In order to use bitcoins, the first thing that must be owned is the required equipment: a mobile device or a PC where you can install an electronic wallet. Next, the most obvious option is to buy those bitcoins in exchange for fiat money. And finally, it will only be to send them and even receive them.

Get a Wallet

There are several options as far as wallet are concerned, and the most important characteristics in which they differ lie in their safety and functionality. The most appropriate option for each user is the one that can offer the necessary level of protection, but, at the same time, occupy only the resources available. However, it is important to note that bitcoins, really, are not stored in their wallets, but in the blockchain that is backed by thousands of nodes. The wallet is just a program that allows the owner of the funds to handle them much more easily.

We can say that a portfolio is ‘hot’ (hot) or ‘cold’ (cold), depending on whether or not it is connected to the Internet. Of course, cold (hardware) wallets are the safest. In addition, we can divide the Bitcoin wallets into 5 types:

- Bitcoin clients: these are the original Bitcoin wallets, for which the entire blockchain must be downloaded to the computer. Therefore, its demand for resources is quite heavy, although in return the reliability, privacy and decentralization increase. We can also call them complete nodes. The rest of the purses are simple nodes (SPV).

In the complete nodes the entire blockchain is downloaded and validated (more than 124 GB to date). They are the ones that miners use, so they are part of the main network and maintain it. The most popular of them is Bitcoin Core. Simple nodes, meanwhile, can verify if a transaction was made without downloading the entire blockchain, and although they also help maintain the network, they only do so by following the full nodes.


- Mobile wallets: these are lightweight applications, designed for smartphones and tablets, usually for iOS or Android systems. They are easy to install and operate and require few resources on the device. The fundamental options they offer - their functionalities vary - is the generation of public keys, the safeguarding of the private key within the software, the backup for recovery and, of course, sending and receiving funds. Two of them are Mycelium and Breadwallet.

- Desktop wallets: these are downloadable programs to any desktop or laptop PC, usually for Windows, Linux and MacOS systems. Its basic options are the same as in a mobile phone, plus certain additional features depending on the provider and, like mobile phones, they are considered hot wallets. Two of them are Copay and BitGo.


- Hardware wallets: they are small devices, such as a pendrive, specially designed to store bitcoins securely, offline at all times (cold purses) and eliminating the risk of viruses that applications might have. They are the only ones that are not free. Available brands are Trezor, Ledger and KeepKey.

- Online portfolios: they are a service provided by a third party, where, unlike the others, centralization is present, that is, there is a company responsible for the validation of funds, private keys or both. It offers the advantages of being able to use bitcoins from any device and have automatic backups, since it is very common to lose the private key and run out of access. Although you have to consider that with this option, really, bitcoins are usually out of our control, and are susceptible to everything that can happen to them in the online world: from scams to hacks. Two online wallets are Blockchain and Xapo

Beyond these five types, we can mention two additional functions:

* Paper wallets: they are called that, but they are not really wallets and may not be paper. It is simply to write down - or record - the public and private keys on a physical medium, which can be both a paper designed that also includes a QR code - a service that Bitaddress already offers, for example - as a metal plate on which It has been recorded. Bitcoins can be received unlimitedly, but to spend them it is necessary to resort to some of the alternatives that we already mentioned.

* Multi-signature function: in general, purses include this function whereby, if configured, several people are required to carry out transactions, as is the case in a joint bank account. All or at least several of those involved must sign to release the funds. BitPay is one of the companies that offers this alternative.