Bitcoin wallet

Bitcoin is the first successful form of digital money based on peer-to-peer technology that facilitates decentralized transactions whereby. No central bank or centralized authority is involved in the transaction and production of the Bitcoin currency. The Bitcoin network records transactions on a distributed ledger (blockchain) comprising multiple nodes (computers) globally.
Bitcoin was created by an anonymous individual/group under the name, Satoshi Nakamoto. Satoshi Nakamoto, a pseudonymous cypherpunk, published the Bitcoin white paper on October 31, 2008. The source code is available publicly as an open-source project, anybody can look at it and be part of the developmental process.

Following are some of Bitcoin’s important characteristics:

• Scarce: Bitcoin is designed to have a finite supply of 21 million BTC ever created, thus making it an anti-inflationary financial asset.
• Fungible: Bitcoin is a fungible asset such that every coin is identical and equivalent to another.
• Divisible: Bitcoin’s divisibility follows from its fungibility. 1 BTC is thus divisible into satoshis (sats), up to eight decimal places (1 BTC = 100 million sats).

Regarding Bitcoin mining, miners today are mining Bitcoin using ASIC chips dedicated to mining Bitcoin. Bitcoin uses the SHA-256 hashing algorithm with an average transaction confirmation time of 10 minutes.

Bitcoin has inspired other alternative currencies such as Litecoin, Peercoin, Primecoin, and so on.

When you first buy coins, you’re issued with two keys: public and private.

• A public key serves as an address that can be shared with other parties to perform transactions.
• A private key represents a randomly generated number that signs transactions and protects your assets from malicious attacks. If it gets compromised or lost, you won’t be able to access your cold wallet to spend, withdraw, or transfer your coins.

To safeguard and keep track of your keys, you can use online or offline wallets. Online wallets, also known as hot wallets, store private keys on systems or devices that are connected to the internet. Hot wallets are easy and convenient to use, however, they come with several drawbacks. Besides being susceptible to attacks and a honeypot for hackers, with hot wallets, the custody of private keys is often entrusted to a third party such as a crypto exchange, which means you never have full control over your funds. The safer choice is specialized hardware wallets that store private keys offline. Stealing private keys from a hardware wallet would require physical access to the wallet and the corresponding PIN or the recovery phrase. What’s more, with a hardware wallet, you don’t need to rely on third-party custodians.

Ledger Nano is the industry-leading hardware wallet. With more than five million customers, Ledger Nano wallets have several layers of security that protect private keys, and hence your assets:

• Your private keys are stored on secure element chips.
• A PIN code and a 24-word recovery phrase are required to access the wallet.
• Ledger Nano cryptocurrency wallets have been built using highly durable materials for protection against physical damage.

With full isolation between private keys and your computer/mobile, Ledger Nano cold wallets keep your keys secure and give you complete control over your cryptos.

Initially, the primary step is to create a crypto wallet if you haven’t done it yet. Once you have completed this step, the process of executing a Bitcoin transfer is quite similar to almost every crypto wallet.

1. Enter the recipient address of the Bitcoin wallet you want to send BTC.
2. Enter the amount or quantity of Bitcoin you wish to send.
3. Choose the Network fees.
4. Verify the transaction summary before sending it.

However, it is crucial to follow our advice before sending Bitcoin to another wallet:

• For optimal security, make sure always to double-check the addresses that you copy and paste. When possible, using a QR code address might be the preferable method, just to be absolutely certain.
• For larger transactions, it may be a good idea to send a small amount of Bitcoin as a test, to make sure the address is correct.
• For a wallet that supports multiple cryptocurrencies, it’s also important to select the correct coin. Sending Bitcoin (BTC) to a Bitcoin Cash (BCH) address, for example, could result in a permanent loss of funds.
• For sending Bitcoin quickly, higher-fee transactions are usually given higher priority by Bitcoin miners and will reach their destination in a shorter amount of time.

Each crypto-related endeavor necessitates a wallet. If you wish to receive Bitcoin from another party, you must furnish them with a Bitcoin wallet address. However, to obtain a Bitcoin wallet address, you first need to acquire a cryptocurrency wallet compatible with BTC and create a new account. Subsequently, you can locate your receiving address within your wallet’s interface. It’s crucial to accurately record this address, as any error could result in funds being sent to a wallet beyond your control.

To send or receive BTC, you’ll require a Bitcoin wallet address, a unique string of 26-35 characters starting with ‘1’, ‘3’, or ‘bc1’. Each address corresponds to a key pair: a public key for identification and a private key for transaction signing. Your wallet address is essentially a user-friendly version of your public key.

For privacy protection, Bitcoin wallets generate new addresses for each transaction, though old ones remain functional. This practice safeguards your wallet’s security, particularly if you use an online wallet vulnerable to key exposure during transaction signing. Hence, most wallets automatically generate new addresses per transaction to mitigate risks.

No, at the moment, the Ledger Bitcoin wallet does not support Lightning Network.