Store Bitcoin

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Wallet types

There are different types of wallets, each of them with their own advantages and disadvantages. There are also combinations of the following for types:


Hot wallets

A hot-wallets consist only of a software program running on a device like a desktop computer, notebook, tablet and/or mobile phone and it stores the seed phrase on this device. The wallet is always installed on the device which normally is connected to the Internet and therefore is vulnerable to attacks of hackers. This is a very popular method to store small amount of Bitcoin which you can use for day to day operations like buying a coffee or purchasing a book. Hot wallets are less secure than cold wallets!


Cold wallets

A cold-wallet is a special hardware device on which the seed phrase of your wallet is stored and it's only purpose is to be a wallet and sign transactions if you need to move Bitcoin around. This type of wallet is only connected to a computer/phone if a transaction has to be made and therefore it's much more secure than a hot-wallet. For bigger amounts of Bitcoin a cold-wallet is a must!

Custodial wallets

This type of wallet is used to access your funds deposited at an exchange or broker which holds the acquired Bitcoin for you. He has the sed phrase and you got nothing other than a promise that the custodian will give the Bitcoin to you if you want.


Non-custodial wallets

Non custodial wallets are all the wallets for which you have your own seed phrase and therefore have the full control and responsibility over your Bitcoin. This type of wallet makes you free and this is what's the whole thing about!

What kind of wallets do you need?

Generally you will need two wallets, one to store your wealth in Bitcoin and one for spending Bitcoin day to day. There are a lot of wallets and the available options are changing very fast. The following wallets are a good choice at the moment of writing (August 2024):


Non-custodial / hot wallet (Day to Day use)

This wallet is on your phone but you have the full control/responsibility over your seed phrase and Bitcoin. The one I personally use is Aqua Wallet and they are offering apps for Android and Apple devices and there is also an APK-File available. Please check the steps below to install and configure your Aqua wallet.


Non-custodial / cold wallet (Storing wealth)

This wallet is a separate device for which you also have full control/responsibility over your seed phrase and Bitcoin. Personally I'm using the BitBox02 - Bitcoin-only Edition because I don't want other coins. There is a desktop application for Windows / Apple / Linux available and also a mobile app for Android with a separate APK-File. Due to insane USB port restrictions of Apple, they are not able to provide a mobile app for iPhones/iPads at this time. Detailed instructions in English or German can help you get started with the installation of your BitBox02.

Installation / configuration of Aqua wallet

The following steps will show you how to install the Aqua wallet on your mobile device:

  • Open AppStore (Apple) or Google Play (Android) on your mobile device.
  • Search for the term 'Aqua Wallet'.
  • Click on the 'Install' button.
  • Enable the 'Terms of Service & Privacy Policy' checkbox.
  • Click on the button 'Create New Wallet'.
  • Wait until your new wallet is ready.
  • Your start screen of your wallet will be displayed.
  • One 'Savings Account' for Bitcoin,
  • Two 'Spending Accounts' - Layer 2 Bitcoin (Lightning) / Tether USDt (Stablecoin).
  • Click on the 'Settings' button to display the different configuration options.
  • Your can choose your preferred 'Language'.
  • Specify which 'Reference Rate' to use in your wallet (CHF, USD, EUR...).
  • Set the 'Region' in which you reside (for using the services in the marketplaces section).
  • Enable 'Biometric Authentication' if desired.
  • If you would like you can also enable the 'Dark Mode'.
  • Please check the red warnings below!
  • To backup your wallet click on the 'View Seed Phrase' link.
  • Write down your seed phrase (12 words) and store it in a save place.
  • Now you are ready to use your Aqua wallet!

Warnings

When you create a new Bitcoin wallet, you will receive a seed phrase consisting of 12 or 24 words, and it's necessary to protect this seed phrase at all costs. The seed phrase is the only thing you need to access your Bitcoin, and if you lose the seed phrase, your Bitcoin is lost forever! Yes, forever! So, please review the following list and ensure you truly understand the implications of protecting your seed phrase:


  1. Don't ever make digital copies of the seed phrase (no photos, text files, excel sheets, cloud drives...).
  2. Write down your seed phrase on paper or use metal plates to store it for a long time (backup type depends on the value of your Bitcoin).
  3. Test the backup of the seed phrase to ensure that it works correctly (use it in a hardware wallet and check if the funds show up).
  4. Store the seed phrase backups in different geographical locations (Use tamper-evident bags for higher security).
  5. Secure the access to the seed phrase backups (use a safe/locker if you have to secure a high Bitcoin value).
  6. Check your backup plan from time to time - Don't trust, verify!