How would you know you have the real bitcoins?
Very simple,
If you hold and control the private keys to your wallet then that means you hold the real Bitcoins.
What is a private key?
Private Keys are your encypted password that enables you to access and control your Bitcoins on the blockchain.
So just imagine that the entire blockchain network is secured in cryptography against the most powerful computers and hackers in the world and your private key is the only one that can access your bitcoins on the blockchain network.
Private keys may be in the form of a 12 or 24 seed password or a long string of letters and numbers.
Does all bitcoin wallets have private keys?
No
Which type of wallets doesn’t have private keys?
Exchange sites like localbitcoins, Abra, Coins.ph and other buy and sell bitcoin exchange sites that puts your bitcoins on their website wallet.
Which wallets have private keys?
Electrum
Jaxx
Exodus
Mycellium
Paper Wallets
Ledger Wallet
Trezor
and others just research before using
What do I personally use?
Electrum Software Wallet on my Android Phone — for regular sending and trading of Bitcoins
Ledger Nano S Harware Wallet — This is where I keep my bitcoin reserve funds for trading
Electrum Cold Storage — Where I keep Bitcoins for the long-term
Both the Ledger Wallet and Electrum wallet have private keys.
How do I secure my private keys?
This is a little bit long to explain and I’ll write more on this on my next article.
Having your bitcoins on exchanges is like putting your money with banks, when you get to see on your ATM that you have 1 Million Pesos, it doesn’t necessarilly mean your 1 Million is just sitting there, the bank can in fact use your money for investments until the time you actually withdraw your money. This is no different from bitcoins being left on exchanges, when you leave your bitcoins on exchanges you are just getting a numerical value on their website which technically means you don’t hold and own the real bitcoin.
So what’s the problem with that?
You lose the decentralized and blockchain technology on your bitcoin, since your Bitcoin is now on their server then it now becomes centralized and prone to hack, which already happened with centralized exchanges in the past.
Companies come and go and so do exchanges, but the Bitcoin blockchain will be there for a very very very long time as long as the internet exists Bitcoin will exist
It is mathematically estimated that even if you use the most powerful in existence today, it would take 0.65 billion billion years to hack just one bitcoin blockchain wallet.
You don’t need to understand this for now, but when you place your bitcoins on wallets with private keys you get to benefit from future bitcoin hardfork crypto dividends (this is a long story for another time).
In summary, when you buy bitcoins from us or from exchanges and you just plan to hold on to it for the long term then put them in a bitcoin wallet that has a private key.
Pro Tip:
1. Know the difference between public keys and private keys. It will be very fatal if you make the mistake of giving out your private keys by mistake
2. Write your private keys or seed password on a piece of paper and keep it safe at home or in a safety deposit box in the bank.
3. Do not save your private keys on your computer or on any of your online accounts like google drive and email accounts.
So do you own the real bitcoins?
Yes, if you hold them in a wallet with private keys
No, if you leave them on exchanges.
If you feel this article has been helpful please follow and like us on facebook.com/bitcoinsmeetup
I have several articles written already for bitcoin beginners, check out my medium account -Bitcoin Wallet for Beginners
http://bit.ly/2mMpcPb
For safe cheap and fast bitcoins in the Philippines visit bitcoinsmeetup.com
Please like and follow our page for more freshly written bitcoin articles for Filipinos worldwide.
#bitcoinsmeetup
#bitcoinsphilippines
#safecheapfastbtc
