Looking to invest in Bitcoin? Here are 16 terms to familiarize yourself with before getting started:
[Note: this is not investment advice and we are not saying you should or shouldn’t invest in Bitcoin or other e-currencies. It’s always best to do your own research.]
- Private keys – allows you to access the public keys in your Bitcoin wallet. A private key is always connected to a public key.
- Public keys – used to assign funds to someone else. Without the private key associated with the specific public key, these funds are inaccessible.
- Wallet address – the address you or others can use to deposit funds into your wallet. This is comparable to an email or mailing address. **It is important to always be accurate with these addresses – one wrong number, letter, or case, and your Bitcoin can be lost forever.**
- Bitcoin wallet – this is a collection of private keys that allow you to access the funds in the public keys.
- Seed – this is how the private keys are generated. It is very important to keep these safe and stored somewhere off the internet, otherwise you are at risk of having your funds stolen.
- Cold wallet (Cold Storage) – a wallet that it not connected to the internet, and the safest way to store your funds long-term.
- Hardware wallet – an external device, like a USB stick, that is the safest way to store your Bitcoins. The most popular one is the Ledger Nano S.
- Paper wallet – a piece of paper that contains your private and public keys, likely containing a QR code.
- Hot wallet – a wallet that stores your Bitcoins, while connected to the internet. This is not suggested for long-term storage, as it renders your funds vulnerable to malicious attack.
- Desktop wallet – this is installed directly onto your device, and accessible on your computer desktop.
- Online wallet (web wallet) – a wallet on your web browser, that allows you to store, send, and receive Bitcoins.
- Mobile wallet – a wallet accessible on your mobile device that is app-based, allowing you to store, send, and receive Bitcoins from your smartphone.
- Phishing – usually in the form of a trick email or website, these are ways cyber-criminals steal personal information from users.
- Password manager – using Dashlane will help generate and save highly secure passwords for you across all your devices. This ensures optimal protection of your funds.
- 2FA (two-factor authentication) – using an authentic Two-Factor authentication application like Google Authenticator helps add an extra layer of security to your password protected
- Exchange – this is a term used for buying and selling Bitcoins. A common example of a digital asset exchange platform is Coinbase.
Now that you have read all the basic terms associated with cryptocurrency, you are equipped to get started in the Bitcoin world!