<aside> <img src="/icons/flash_gray.svg" alt="/icons/flash_gray.svg" width="40px" /> The Bitcoin Rabbit Hole: 6/10 ⚡ Learn how to use Bitcoin wallets, accounts, addresses and safely protecting your private key.
</aside>
The first step to using Bitcoin is to get yourself a wallet. Wallets create and protect your private keys which allow you to send and receive Bitcoin. Different wallets have different security trade-offs, so we recommend having two wallets, one for everyday usage (a mobile app) and one for saving/investing (a hardware wallet).
Your everyday spending wallet will be software running on an internet connected smartphone or desktop computer. Being that it’s connected to the internet makes it more convenient but less secure. Your saving/investing wallet, commonly referred to as a hardware wallet, is a stick-drive sized computer which isn’t connected to the internet. Hardware wallets are dedicated to doing one thing and doing it well: protecting your private key.
We recommend using the Coinbase Wallet on your smartphone for everyday transactions and a Trezor hardware wallet for anything more than $1,000. Software and hardware wallets work similarly.
The first step to setting up any wallet is generating your private key. Once you have a private key, you can plug it into any Bitcoin wallet to gain access to your Bitcoin.
Technically a private key looks like this:
xprv9u5Fw24JfRkhAyvP4BDgamX2aFkzt2ywwNK6JeDhoNaovnDbUsKonhVxzo5bnqWNfzus4XFVk1rDtKSEZ6RQF2asXb5eeTKAdARJLWNLbMF
But that long string of gibberish can be difficult to write down and remember, so instead we use a seed phrase. A seedphrase, sometimes called a mnemonic, is a human readable list of 12 or 24 words which when hashed together will always create the same private key. Your wallet will randomly select the words from this list of 2048 words when generating your seedphrase.
The seedphrase used to generate the above private key looks like this:
concert rug segment cattle chronic half claim immune goose spot funny glide
It might not seem like it to our human brains, but it’s mathematically impossible to guess a private key seedphrase generated using proper randomness. In some cases, the seedphrase may randomly include the same word multiple times.
For all intensive purposes the seedphrase is your private key. Think of your seedphrase as the password to your Bitcoin. We don’t want to keep it anywhere which can be hacked or stolen. Advanced technologies have been created and entire books have been written on private key protection, but here’s a few tips to get your started managing your private key: