I have some Litecoins, I’m currently mining Ethereum, and I am also looking into buying some Steem, but I’m really confused about how all of this works.
I currently have all of my Litecoins on coinbase but I’d like to get them offline, and my computer could crash so that’s not the ideal place either. I did look at some hardware wallets but they are pretty expensive. But the main problem I’m having on making a choice is my lack of knowledge. How and where are coins actually stored? I’ve read some sites that seem to indicate that you can store your coins in your head by simply remembering the key? While I was under the impression that they needed to be in a software/hardware wallet somewhere. I’ve also heard you can store coins on paper in what’s called cold storage. How about a backup, dos that mean you have the same coins in two different places? I’m thinking of storing them on paper or on a USB thumb drive and keeping them in a safe. But until I get educated on how this actually works I am lost and unable to make a decision. Thanks for any and all replies.
the private4 key which is also called your spend address is the actual coin itself…if you copy that information you can sweep the transaction into a new wallet or just hand it to someone and they can put it in their wallet and send it to someone that way…storing coins offline securely is just protecting your private keys…so you create a new address in your “wallet”…
the “wallet” is actually just a key manager and the address is actually the “wallet containing a set value” so there are many ways to store coins but your back up is all of your private keys hashed into one string of characters…
when your core wallet opens…the code tells your computer to “decrypt” your wallet.dat file which is your hashed private keys…
if you only create one address and send all your coins to that then you would basically just make a “view only” wallet in python wallet or something like that or just use block explorer to track the balances…
its not recommended to use numerous transactions to the same address but I’ve never had trouble so far with it…people get donations like that all the time…just best to “sweep” any written down private key to a new address so that any remaining coins cant be stolen using the same key…
so in essence you backup is cold storage…as long as you have a way to connect them to a core wallet to send to another wallet then you can spend it…or just give the drive to someone else and tell them your password and they can import the transactions using the private key contained in the backup…
Also no matter what wallet used…when a transaction is broadcast to the network…you “wallet” adds up all coins up to the output that you stated to spend…then sends those keys out…splits the transactions up to send the coins you said to where you want and sends you back your change…you can specify a different address you this in order to sweep wallets/address as well
so you do need a software wallet to access the network for a securely confirmed transaction to guarantee no double spends…hopefully no one is printing paper wallets and making numerous copies to sell…that would be double spending without accessing the network as every private key can only be spent one time
hopefully I made this clear enough
Thanks. Do you know of a tutorial on this?
google bitcoin wiki paper wallets or any bitcoin wiki pages…also lots of tutorials on you tube