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Author Topic: Where did wallets store bitcoins ?  (Read 393 times)
Maher92
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March 09, 2018, 07:44:00 PM
 #1

Hi every one ! Smiley
I'm new in cryptocurrency, I'm trying to understand it but there still one thing I didn't understand about wallets!

At first , I know there is cold and worm wallet.
The cold is a hardware that store coins in it
And the warm is a software or a site on internet that store coins on internet or in the laptop or mobile ( is what I already know right ?)

But what I'm trying to know about soft wallets like Bitpay, Enjin or BitCoin Core wallets , do they store bitcoins on the device or on internet ?

So if l have bitcoins in my mobile wallet and the mobile drop in water and gone!, did the coins gone too or I can get them back in a new mobile by the recovery key?

And I'm sorry for my weak English  Roll Eyes
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bitperson
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March 09, 2018, 08:29:29 PM
Merited by suchmoon (1)
 #2

what I'm trying to know about soft wallets like Bitpay, Enjin or BitCoin Core wallets , do they store bitcoins on the device or on internet ?
Your bitcoins are stored on the blockchain, which is publicly available to every bitcoin node. Anyone who knows your bitcoin address can see the balance of that address. But those bitcoins can only be spent by knowing your private key. So as long as you have your private key, you can spend your bitcoins from any device.

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March 09, 2018, 09:30:07 PM
 #3

Hi every one ! Smiley
I'm new in cryptocurrency, I'm trying to understand it but there still one thing I didn't understand about wallets!

At first , I know there is cold and worm wallet.
The cold is a hardware that store coins in it
And the warm is a software or a site on internet that store coins on internet or in the laptop or mobile ( is what I already know right ?)

But what I'm trying to know about soft wallets like Bitpay, Enjin or BitCoin Core wallets , do they store bitcoins on the device or on internet ?

So if l have bitcoins in my mobile wallet and the mobile drop in water and gone!, did the coins gone too or I can get them back in a new mobile by the recovery key?

And I'm sorry for my weak English  Roll Eyes

As it has been explained well by the previous post the coins are NOT saved locally, but on the blockchain. Please ensure that you keep a copy of the private key, it is essential for BOTH recovering your coins and also to access from another wallet/device.
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March 09, 2018, 10:09:57 PM
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Quote
At first , I know there is cold and worm wallet.
The cold is a hardware that store coins in it
And the warm is a software or a site on internet that store coins on internet or in the laptop or mobile ( is what I already know right ?)
Close but a little bit wrong.
A cold storage is a method to keep your Bitcoin offline from the internet, usually used when you are holding a large sum of bitcoins as a security measure.
Bitcoin based company such as Bitpay, Coinbase, etc. Usually has Both Cold and Hot wallet, Hot wallet will be used for their daily transactions while Cold Wallet will be used as their collateral and reserves in case their website got hacked and all of their Hot wallet get stolen.
https://en.bitcoin.it/wiki/Cold_storage
https://en.bitcoin.it/wiki/Hot_wallet <<< For reference.

Quote
But what I'm trying to know about soft wallets like Bitpay, Enjin or BitCoin Core wallets , do they store bitcoins on the device or on internet ?
Bitpay uses Both Cold and Hot Wallet, as I've said above.
I don't know anything about Enjin.
Bitcoin Core wallet needs to be connected to Internet to be used, so it is a Hot wallet, although you can save your Wallet file to be used as Cold Storage.

Quote
So if l have bitcoins in my mobile wallet and the mobile drop in water and gone!, did the coins gone too or I can get them back in a new mobile by the recovery key?
As long as you have either the Wallet file or Seed/Mnemonic Phrase Backed up somewhere you are safe.

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And I'm sorry for my weak English
I've seen worse Roll Eyes
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March 09, 2018, 10:32:24 PM
Merited by LoyceV (1), Jet Cash (1)
 #5

An addendum to the previous replies:
Bitcoins do NOT actually exist.
There are no such things as Bitcoins on the protocol level; what exist on the blockchain are UTXOs (unspent transaction outputs)
You've heard that the blockchain is a "ledger"
A ledger is a collection of accounting entries consisting of credits and debits.
That's how the blockchain works.
On a ledger, money doesn't exist; what exists are credit or debit (transaction) entries.
Bitcoins "exist" only as transaction histories on the blockchain, so you could say that bitcoin is a form of "triple entry accounting"
This transaction history is stored on the hard disc drives of everyone that runs a full node.

TL;DR: Bitcoins aren't stored anywhere because they don't exist.
lopez cryptomania
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March 09, 2018, 10:44:12 PM
 #6

Hi every one ! Smiley
I'm new in cryptocurrency, I'm trying to understand it but there still one thing I didn't understand about wallets!

At first , I know there is cold and worm wallet.
The cold is a hardware that store coins in it
And the warm is a software or a site on internet that store coins on internet or in the laptop or mobile ( is what I already know right ?)

But what I'm trying to know about soft wallets like Bitpay, Enjin or BitCoin Core wallets , do they store bitcoins on the device or on internet ?

So if l have bitcoins in my mobile wallet and the mobile drop in water and gone!, did the coins gone too or I can get them back in a new mobile by the recovery key?

And I'm sorry for my weak English  Roll Eyes

Yes that is correct if you dropped cold wallet in water, or worst case lost it as long as you have your 12-24 random seed then you will be able to recover your coins by entering that info in and retrieving what was on that wallet. That's why when you buy a cold storage wallet they provide you the paper to write down your private key seed words as a backup. Whatever you do DON'T STORE ON THE EXCHANGE. This is how ppl. get hacked or exchanges like mt gox disappear and go under. Here is an ICO I believe in bc they allow you to hold your private keys yourself which protects you just like a cold wallet but with the access to arbitrage trade across the price differences that exist in world-wide crypto markets. They will bring in the masses into crypto I believe with this idea coupled with a really simple User interface.                                       
https://bitcointalk.org/index.php?topic=3085831.msg31823480#msg31823480
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March 09, 2018, 11:36:19 PM
 #7

I'm new in cryptocurrency, I'm trying to understand it but there still one thing I didn't understand about wallets!
---snip---
... do they store bitcoins on the device or on internet ?
but ultimately, a bitcoin is just a number associated with a Bitcoin Address.
bitcoin is just like e-cash, a bunch of data numbers stored in a public blockchain
a private key is the only way to control that bitcoin, losing it is the same thing as losing your bitcoin
with centralized e-cash, we might be able to reclaim lost fund if the e-cash provider has the system to verify the ownership of the e-cash by other means (id, account, etc)
this also can be done with bitcoin, but the practice would be against the main idea of bitcoin as "distributed peer-to-peer digital currency"

So if l have bitcoins in my mobile wallet and the mobile drop in water and gone!, did the coins gone too or I can get them back in a new mobile by the recovery key?
you can recover your fund on your new mobile wallet by using recovery key (seed) or private key
another great bitcoin ideas of "you control your own money" and "be your own bank" principle

Maher92
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March 10, 2018, 12:47:48 AM
 #8

Thank you very very very much for your replies   Cheesy
you've explained alot of thing that would help me to understand how this system works!

In simple words, we can say that the coins are on the blockchain and they will never leave it, and the hot wallet is just the door, which I must have it's key to open it.
that's means I don't have to worry if my phone damaged or gone to space as long as I have the recover key Grin

Whatever you do DON'T STORE ON THE EXCHANGE.
I had this idea before "putting my money on the exchange to sell and buy and also to store them" but now I will take your advice to store them away  Shocked

Thank you all Smiley
bitperson
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March 10, 2018, 02:25:32 AM
 #9

Bitcoins aren't stored anywhere because they don't exist.
This is actually correct. Apologies for the over-simplification. Bitcoins are indeed abstractions; they exist only in the form of ‘unspent transaction outputs’, UTXOs. Allow me to try to clarify with the help of a blockchain explorer:


And thus it continues. Every bitcoin wallet balance consists of one or more UTXOs to which the wallet owner holds the public key. So it is actually the UTXOs that exist on the blockchain. Each UTXO is either change created from a previous transaction, or a coinbase reward credited to a miner. And even if you lose the private key of a UTXO, the output continues to exist; you just won’t be able to spend it.

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bob123
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March 10, 2018, 11:45:35 AM
 #10

In simple words, we can say that the coins are on the blockchain and they will never leave it, and the hot wallet is just the door, which I must have it's key to open it.

In simple words, yes. You could say the coins are 'stored on the blockchain'.

A wallet is a piece of hardware/software (except paper wallet) which manages the private-/public keypairs for you.
A private key is necessary to spend coins which has been prior send to the corresponding public key.



that's means I don't have to worry if my phone damaged or gone to space as long as I have the recover key Grin

Thats true. But everyone else who gains access to your mobile phone (or more precise: to your private keys / seed) will also gain full control over your bitcoins.
You should try to never leave any traces (e.g. old mobile which you throw away or sell to someone).
Regard such seeds / private keys as compromised and don't use them anymore once they could theoretically be known by someone else.

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March 11, 2018, 11:56:24 AM
Merited by kafeelniazi (1)
 #11

Quote
that's means I don't have to worry if my phone damaged or gone to space as long as I have the recover key Grin
This is a common sense, but If you are selling your phone ALWAYS format your phone completely to minimize a chance that someone will have access your wallet.
Also, all modern phone now have applocker to put an extra security from meddling hands, use them (Especially if your phone has finger print scanner).

Quote
I had this idea before "putting my money on the exchange to sell and buy and also to store them" but now I will take your advice to store them away  Shocked
Exchange tend to get hacked or running away with their customer's money, that's why only send amount that you wish to exchange and then withdraw it immediately.
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March 14, 2018, 02:00:24 PM
 #12

Hi every one ! Smiley
I'm new in cryptocurrency, I'm trying to understand it but there still one thing I didn't understand about wallets!

At first , I know there is cold and worm wallet.
The cold is a hardware that store coins in it
And the warm is a software or a site on internet that store coins on internet or in the laptop or mobile ( is what I already know right ?)

But what I'm trying to know about soft wallets like Bitpay, Enjin or BitCoin Core wallets , do they store bitcoins on the device or on internet ?

So if l have bitcoins in my mobile wallet and the mobile drop in water and gone!, did the coins gone too or I can get them back in a new mobile by the recovery key?

And I'm sorry for my weak English  Roll Eyes

Hi,
I will try to answer this question as simple as possible.

First of All, think a Bitcoin Wallet just as a pocket where you have your coins or bills.
A Bitcoin Wallet is just a collection of bitcoin addresses, so a place where you store your coins and bills, (in Bitcoins your coins, where the smallest unit is called Satoshi - 1 BTC = 100,000,000 Satoshis, and you have different units, just like you have different coins and bills in real life).
So as soon you have the coins and bills in your pocket, they "belong" to you and you can spend them as long as you have the pocket with you. You will get often change in return.
The scenario is very similar in bitcoin but more technical with few differences. Also the cryptography comes here into the game.

In your Bitcoin Wallet, you have Bitcoin Addresses. These addresses are made of 26 to 35 aplhanumeric characters, beginning either with the number 1 or 3 and generated by the software (Wallet) you are using.
The Bitcoin Protocol being based on asymmetric cryptography, each bitcoin address consists of a Public key and a Private key.

Public key allows you to hand people a public key and use the corresponding private key to prove the ownership.
Applied to Bitcoin, a Public Address is just a shorthand notation for a public key. So when someone makes a transaction, let's say I'm sending from my wallet (from Address X) to your provided BTC Address, I potentially give you the right to spend the money as long as you have the private key of this address.

To spend your Bitcoins, you basically give out the ownership of one your addresses to someone else (this process of exchanging keys is done automatically by the wallet you are using).

Now there are different types of Wallets: generally Cold Wallet, Hot Wallet and mix of both, these all could be Hardware or Software. There are many sub-types like mobile wallet, Paper wallet etc.
Simply said, with a Cold Wallet, you have your private keys in your hands.
In a Hot Wallet, a third party is controlling/holding your private keys on their servers, meanly if they are hacked.... you are hacked too most probably...
Only when you have the private keys in your hands, you will have FULL CONTROL of your coins.
But regardless of which wallet you are using, you can still spend funds, as long as you have access on it.

Now let's say you are using Paper Wallet (Cold), which is very secure because only you has the key. You just need to loose this paper and you will have lost forever your coins...

Let's transfer this to the real world:
Hot wallets are like checking accounts while cold wallets are very similar to saving accounts.
In a Checking Account you can spend very fast your money, while to retrieve funds from a saving accounts, the procedure might be longer. But still you can spend from both accounts right?

At the end of the day, you will have to decide if you want to go for Hot Wallets or Cold Wallets.
Both have advantages and inconvenient. What would be for me an advantage, might not be necessary for you.

It's important to understand the concept Public/Private key, so that you can easily export your coins to other wallets (wherever your private keys are provided to you).

I hope this could help you a little bit to start over. There are many Experts here, who will surely give better Explanation  Smiley

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March 15, 2018, 12:22:44 PM
 #13

Now there are different types of Wallets: generally Cold Wallet, Hot Wallet and mix of both..

Theoretically there isn't a 'mix of both'.

Cold wallet: Wallet which holds private keys which have been generated on an device, never connected to the internet.
Hot wallet: Wallet which holds private keys on a device which is (or was) connected to the internet.



Simply said, with a Cold Wallet, you have your private keys in your hands.

You should be in control of your private keys with every wallet you use.
Regardless whether its a cold or hot wallet.



In a Hot Wallet, a third party is controlling/holding your private keys on their servers..

No. Some web-wallet provider might controlling their users private keys.
But hot wallets in general (e.g. mobile/desktop/etc..) do NOT share the private keys with any server, etc..

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March 15, 2018, 06:30:42 PM
 #14

In simple words, we can say that the coins are on the blockchain and they will never leave it, and the hot wallet is just the door, which I must have it's key to open it.

Keep your private keys to yourself - that's only when you can say that you possess your Bitcoins. Never give it to anybody, even don't use it over websites that ask you for the same to claim some (or same) amount of alts (eg.: Bitcoin Cash) unless it's official. I had my private key compromised once due to using it online over a website.


Quote
that's means I don't have to worry if my phone damaged or gone to space as long as I have the recover key Grin

If you'd like something more easy, try wallets like Electrum. Even if you don't have your private key, you can access to your "wallet" through your recovery seed when you import it on a different device. Wallet - consists of addresses (each of which possess its own private key). So, storing too many private keys could be too much hassle and having a 12 words recovery seed can help save you from that.

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March 16, 2018, 07:36:19 AM
 #15

Good fundamental question; here is some more detail about UTXOs:

https://www.ccn.com/bitcoin-transaction-really-works/

https://www.reddit.com/r/Bitcoin/comments/5c7it9/visualization_of_the_unspent_transaction_outputs/
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March 19, 2018, 04:55:31 PM
 #16

As someone said previously Bitcoins do not exist as a file. BTCs are basically represented by UTXOs. To get access to the network and be able to utilize your coins you either have to run a full node or to rely on somebody who runs it (wallet provider). If you are too lazy to maintain your own node, than you are reliant on your wallet node:
-  not falsifying your balance
-  actually broadcasting your transaction
Also you are not anonymous anymore because wallet's node knows your ip, so it is better to store coins in cold storage

https://cryptagio.com - crypto exchange platform
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March 19, 2018, 07:02:45 PM
 #17

This is a common sense, but If you are selling your phone ALWAYS format your phone completely to minimize a chance that someone will have access your wallet.
Also, all modern phone now have applocker to put an extra security from meddling hands, use them (Especially if your phone has finger print scanner).

Formating your phone reduces the chance that someone can access your wallet. The only 100% secure way to avoide that someone restores the wallet is to create a new wallet on another device (new phone  or anywhere else) and transfer all coins from the old wallet to the new one and never use any of the addresses from the old wallet again. In this case even if the old wallet got somehow restored or hacked or whatever there are no coins on it which can be stolen.
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April 05, 2018, 02:33:35 AM
 #18

Hi everyone! Smiley
I'm new in cryptocurrency, I'm trying to understand it but there still one thing I didn't understand about wallets!

At first, I know there is cold and worm wallet.
The cold is a hardware that store coins in it
And the warm is a software or a site on the internet that store coins on the internet or in the laptop or mobile ( is what I already know right ?)

But what I'm trying to know about soft wallets like Bitpay, Enjin or BitCoin Core wallets, do they store bitcoins on the device or on the internet?

So if l have bitcoins in my mobile wallet and the mobile drop in water and go!, did the coins gone too or I can get them back in a new mobile by the recovery key?

And I'm sorry for my weak English Smiley
From what I know, you can reopen it with another device as long as you know your bitcoin address and private key you still remember.
We recommend that private key to knowing yourself do not share with others and do not write it on your mobile device because if your mobile is lost stolen it will be misused.
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April 05, 2018, 06:14:13 AM
 #19

Bitcoins aren't stored anywhere because they don't exist.
This is actually correct. Apologies for the over-simplification. Bitcoins are indeed abstractions; they exist only in the form of ‘unspent transaction outputs’, UTXOs. Allow me to try to clarify with the help of a blockchain explorer:


And thus it continues. Every bitcoin wallet balance consists of one or more UTXOs to which the wallet owner holds the public key. So it is actually the UTXOs that exist on the blockchain. Each UTXO is either change created from a previous transaction, or a coinbase reward credited to a miner. And even if you lose the private key of a UTXO, the output continues to exist; you just won’t be able to spend it.

why i cannot see the sender of those 50BTC?  and last transaction from this address was 18-03-27 12:57:12 ... so someone spend 10 years without spending those bitcoin?
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April 05, 2018, 08:22:08 AM
 #20

why i cannot see the sender of those 50BTC?

You can't identify a sender because there is no.
What you were looking at is a coinbase transaction (not related at all to the exchange called coinbase; they just used that term as a company name).
This is the mining reward. They assign themselve the current reward (earlier 50 btc, then halving every ~4 years; currently 12.5 btc).
This is the (only) way of generating bitcoins, mining them.




and last transaction from this address was 18-03-27 12:57:12 ... so someone spend 10 years without spending those bitcoin?

Yes. This is nothing unusual. Thereare quite a few possibilities why they didn't got moved yet.
He may:
  • have forgotten about it
  • have made a mistake and included an address without holding the private key
  • have lost the private key (e.g. hard drive damaged)
  • have a lot more btc's and those are a part of his 'holding stack'
  • etc..

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