For more info check out blockchainhub.net. If you are new to cryptocurrency, you will need to understand some basic facts about storing and securing your money. Coins like Bitcoin are stored in the so-called “wallets”. This tutorial will guide you through the first steps of purchasing cryptocurrency.
2. Contents
● General online security
● What is a cryptocurrency?
● Why use cryptocurrency?
● What is a blockchain wallet?
● Types of wallets
● Cryptocurrency exchanges
● Backups: How to secure you cryptocurrency?
● Making a transaction: Sending & Receiving cryptocurrency
● How to track a transaction on the block explorer
2
3. General
Online Security
Before you think of cryptocurrency
security, you need to think of
general online security!
● Use strong passwords or
password managers
(1Password) when using online
exchanges, email, etc.
●
● Do not use the same password
on multiple websites
●
● Always activate Two-Factor
Authentication if possible
3
5. What is a
cryptocurrency? “Limited entries in a database no
one can change without fulfilling
specific conditions.”
5
6. Why use
cryptocurrencies?
Cause it’s fun!
● Be your own bank
● Low transaction fees
● No third-parties
● Use as a payment method:
use when traveling, cross
border payments, buy goods,
etc.
● Accept as payment method:
as a merchant with otherwise
expensive cross border
payments, marketing reasons
6
7. What is a
blockchain
wallet?
● A piece of software
●
● Communicates with the
blockchain network
●
● Allows you to send and receive
transactions
7
11. Types of Wallets
(1)
● Full node wallets
(download every block and
transaction)
●
● Lightweight wallets
11
12. Types of Wallets
(2)
Mostly lightweight wallets
● Mobile wallets
●
● Desktop wallets
●
● Online wallets
●
● Hardware wallets
●
● Paper wallets
12
13. Types of Wallets
(3)
Open source vs Closed source
● Open source
○ Pro: Accessible/Reviewable by
everybody
○ Con: Can be used to create
malicious copy of the wallet
● Closed source
○ Pro: Cannot be used for creation
of malicious copies of the wallet
○ Con: cannot be reviewed by
anybody
●
13
14. Online Wallet
● Web based
●
● Hosted on a central server
●
● Users cannot manage their
private keys
●
● Backup is impossible
14
16. Mobile
Wallet
● It will store user’s private keys
on the device
●
● Could be compared to a real
cash wallet(could get stolen or
lost)
●
● Backup required
16
22. Paper
Wallet
● Also called “cold storage”
● Private keys printed on a
paper (generated completely
offline)
●
● The corresponding public
address also has to be printed
otherwise users cannot
receive funds
22
25. Security vs Usability
Type of wallet Setup and Usability Security Level
Online wallets
Mobile wallets
Desktop wallets
Hardware wallets
Paper wallets
25
27. Why is backup
compulsory?
● The button “Reset password”
does not exist in the
blockchain space
● Once you lose access to your
private keys you lose your
money
●
● There is always the possibility
of hardware breakdown,
natural disaster or theft
27
28. Different wallets
have different
backups
techniques
● With backup phrase
● Manually copy the private keys
on a backup USB, HDD, SSD,
etc.
●
● Paper wallets: copy the wallet
multiple times
●
● Email recovery link: a backup
link gets sent to your
email(not recommended)
28
33. QR-codes
Can represent a simple address This QR-code represents a Bitcoin
address: “3PKB4f2vG8xEzgjpZsJ
RKa39jWMNGiKWcg”
33
34. QR-codes
● A bitcoin address:
"1GdK9UzpHBzqzX2A9JFP3Di4we
BwqgmoQA"
● The payment amount: "0.015"
● A label for the recipient address:
"Bob's Cafe"
● A description for the payment:
"Purchase at Bob's Cafe"
Source: “Mastering Bitcoin”, Andreas M. Antonopoulos
Can represent a payment request
34
44. Transaction
fees
● The demand determines the
transaction fees
●
● Bitcoin has the highest
transaction fees as of today
●
● Most wallets automatically
determine the optimal
transaction fee
44