BEGINNER PATH / 03
A Bitcoin wallet is software or hardware that manages the keys and information needed to receive and spend bitcoin. It does not hold digital coins in the same way a physical wallet holds cash.
COMPARE / 04
| PHYSICAL FIAT WALLET | BITCOIN WALLET |
|---|---|
| Can physically contain notes and coins. | Does not contain physical or digital bitcoin objects. |
| Your balance is the cash physically present. | Your displayed balance is calculated from blockchain data relevant to the wallet's keys. |
| Possession of cash usually allows it to be spent. | Spending requires valid cryptographic authorization using the appropriate key. |
| If cash is lost, there is normally no backup copy. | A properly backed-up self-custody wallet can often be recovered using its recovery information. |
| A £20 note is physically transferred to someone else. | A Bitcoin transaction changes which outputs can be spent and under what conditions. |
It finds relevant Bitcoin transactions and calculates the amount currently available to spend.
WHERE THAT DATA COMES FROM →Private keys provide the ability to produce valid signatures for Bitcoin that the wallet controls.
UNDERSTAND KEYS →The wallet creates receive information, constructs payments, signs transactions and broadcasts them to the Bitcoin network.
FOLLOW A TRANSACTION →