Creating Bitcoin wallet

First thing you need to start earning bitcoins is creating bitcoin wallet and getting the wallet address. Here is an information about types of bitcoin wallets to help you choose a wallet. Many bitcoin faucet sites recommend their user to use XAPO wallet as there is no transaction fee involved, thus you can expect immediate withdrawal of your claimed bitcoin regardless of the amount to your Xapo wallet (zero fee). Also they dispense more Satoshis (even double amount) for Xapo users. So, create XAPO wallet to get more bitcoins from faucets.

Wallets

Pick Your Bitcoin Wallet

Gone are the days of learning how to use Bitcoin QT. The standard Bitcoin wallet is still available, and is a powerful tool, but is not necessary for most people. Instead, a light wallet, online wallet, or mobile wallet will suffice, and all are very easy to use. The most difficult part is determining which one you want to use. There are pros and cons to each.

Online Bitcoin Wallets

Online Bitcoin wallets have a bad reputation, and for good reason. When using an online Bitcoin wallet, you must trust your BTC to a 3rd party, and that can be dangerous. However, things are changing, and multisignature online wallets provide more security to the user, though it is still too early to say how effective these measures will be in the long term.

Still, there are trusted companies that provide online wallets, and make it very easy to get started.

coinbaseCOINBASE

Coinbase offers a multisig wallet that allows the user to keep 2 of the 3 keys, thus making it impossible for the company to take your BTC, and providing the added security of having access to your bitcoins even if the website shuts down.

xapoXAPO

Xapo is a popular wallet that is innovating in the bitcoin space. They aim to solve the problem of security and convenience by providing insured cold storage with the ability to have access to funds instantly as well. Xapo has been described by The Wall Street Journal as the Fort Knox of bitcoin storage. When you sign up to XAPO for the first time you get 5000 Satoshi automatically added to your account for free.

How to create a Xapo Wallet:

  1. Go to website and begin the sign up. Enter your email, first and last name, and a unique 4 digit pin. After entering in the CAPTCHA, hit Create A Wallet.
  2. Verify your account with Xapo - Once you have entered create a wallet you have to verify you account with Xapo. Go to the email account you used to sign-up and click the verification link in the email to proceed.
  3. Get Bitcoin address - To find your Wallet address, login to your account then click on the "Wallet" button on the top of the page. Select which Wallet you'd like to view, and then click on the "Receive" button. You will then see a popup screen displaying your Wallet address. (You must enter your personal information first)

Light and Full Bitcoin Wallets on Your Computer

While online wallets are the easiest choice for a beginner, and may be the best option for you, please understand that with Bitcoin, you only truly own it if you are the only one that can control it.

Lightweight Bitcoin wallets, or light wallets, have been a very popular option for quite some time, and for good reason. These wallets generally store your private key, which you do not need to know, in a file on your harddrive, which gives you the ability to control your bitcoins. The big advantages of a light btc wallet over a full btc wallet are size and speed.

A full Bitcoin wallet needs to download the entire blockchain, which is around 25 gigabytes in size at this time, and growing. The download process can be quite time consuming, but for certain individuals, it is worth the time and harddrive space. Of course, it is important that the network has “full nodes”, which are full wallets, such as Bitcoinqt or Bitcoind, running with TCP port 8333 open, as this is the backbone of the Bitcoin network. That being said, as long as there are individuals with a need to run full nodes, it is not necessary for everyone else to do so.

A light Bitcoin wallet gives a user the ability to control their funds, and handle any sort of transaction that the average person would need, but only downloads a small portion of the blockchain. Light wallets only need to download the portions of the blockchain that contain information about the addresses the wallet contains. This means that instead of requiring nearly 25 GB of storage space, the average user would only need to store 25-50 MB of data.

Some of the most popular, easiest to use light Bitcoin wallets are Multibit and Electrum. Both of these wallets are extremely light, and work quite well.

multibitMULTIBIT

Multibit has had criticism in the past for weaker security features, and bugs that resulted in incorrect accounting, but more recent versions have addressed many of these concerns. In both cases, using the wallet is as simple as downloading the software, installing it, and opening the program. At that point, you have a Bitcoin wallet, with an address, and are ready to receive Bitcoin payments.

How to set up Multibit Wallet:

  1. Download and Install Multibit
    Head over to MULTIBIT and click the download link on the right (there are options for Mac, Windows or Linux). If you are using windows, double click on the installer and follow the instructions. For Mac, drag the application in to you Applications folder.
  2. Your first bitcoin wallet
    When you first open MultiBit a new, empty wallet is created for you called "multibit.wallet". In order to get you started quickly, this wallet will not have a password so it will not be encrypted.
  3. Encrypting and securing your bitcoin wallet
    While this step is optional, it is highly recommended. With the growing popularity of bitcoin, it has become an increasing target for hackers and viruses. You can add a password to a wallet using the 'File | Add Password' menu option. Note that you don't need the password to view your wallet or receive transactions, only to send transactions. It is important however that you do not forget your password as you cannot recover it if you do and you will loose access to your bitcoins.
  4. Bitcoin wallet address
    To request bitcoin from someone else they need your "receiving address". You get your receiving address by choosing the "Request" tab or selecting the "Trade | Request Bitcoin" menu option.
  5. Wallet backups
    A good backup is a copy of your wallet file that you store off your computer. That way if something happens to your computer you still have access to the backups. You must use encrypted wallets if you are storing them off your computer.
    How to move a wallet to a different location, such as on to a USB drive:

    The files you will need to move will be named according to the original name you gave the wallet (not the description showing in the sidebar). For example, let's say you wanted to move the original wallet, "multibit.wallet", created during installation:

    1. Ensure you have the destination available (e.g. USB stick plugged in, network drive mapped etc)
    2. Locate "multibit.wallet" - the location appears in the title bar when you select the wallet in MultiBit
    3. Multi-select "multibit.wallet" (file) and "multibit.info" (file) and "multibit-data" (directory)
    4. Use your computer's Copy operation (not Move) to place the files into the destination
    5. Verify that they are OK by using MultiBit's File | Open operation to access the wallet
    6. Close the original wallet to avoid confusion. Closing will not delete the wallet.

Mobile Bitcoin Wallets

Mobile Bitcoin wallets are, essentially, light wallets that work on mobile devices. On the surface, this seems like a bad idea, because losing/breaking your phone, or tablet, would result in the loss of your private keys, and thus your bitcoins. However, to solve this issue, most mobile wallets can also be synced / backed up to a computer, and/or have features that allow your private keys to be regenerated by using a password that you choose when first configuring the wallet. This password is used as a seed for the private key, and allows the private key to be recovered even if the wallet files are destroyed or lost.

electrumELECTRUM

Electrum, which was mentioned above, is one example of a light wallet that is also a mobile wallet. It works on mobile devices, and traditional computers, thus allowing you to access your funds no matter where you are, without the need to store your private keys with a company, as with an online wallet.

myceliumMYCELIUM

Mycelium is another popular choice, and has been growing rapidly. It is a robust mobile wallet that can be backed up to other devices, including personal computers. The company behind Mycelium is also working on interesting other products, such as a “Bitcoincard”, which looks like a traditional debit card, but acts as a Bitcoin wallet, and functions without the need to be connected to the internet.