How Are Bitcoins Stored?
Bitcoins are stored on computers as a set of access keys called a bitcoin wallet. This set of secret keys allows you access any bitcoins sent to your wallet. Creating copies of this wallet will duplicate access to the same coins (since they’re both using the same secret keys). There are several different strategies that you can use to store your secret keys:
- Software Client – Software clients the most secure option and offer users the most control over their coins. A wallet file is created on your personal computer by the bitcoin software. This wallet file can be backed up and stored on any device including external hard drives, usb flash drives, and even stored in cloud services like drop box.
- Online Wallet – Several web sites offer the option to create your wallet file on their page, allowing you to use any browser to access your bitcoins. For increased security, it is very important that a unique wallet and password is generated for each user, instead of a central wallet storing everyone’s coins.
- Online Bitcoin Bank – currently this is NOT recommended because of numerous security concerns. There is no advantage to this approach over using an online wallet.
To learn more information about bitcoins, check out our Getting Started page, or any of our Bitcoin 101 or Bitcoin 201 topics. Bitcoin 101 covers the fundamentals of what bitcoin is, while Bitcoin 201 explores more advanced topics.