what actually is kept in your coin wallet?

Charles-Tim

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Quote from: cryptoaddictchie on September 08, 2021, 05:02:04 AM

Hi mate just compared it for thr purpose of storing thats all. Maybe you are right, cant really compared those two in many ways especially when we go deeper with bitcoin technicalities.

You are right, but there are also easy ways to explain about this to newbies. If a newbie ask me (as my newbie friends do ask me) where can he store bitcoin, I always explain to them what they need to know because they may never know the right thing if I did not explain it to them, and candid enough, they easily understand the explanation as I always question them about it the next we meet. It is just as simple as Bitcoin is stored on blockchain while the keys and address are generated and stored on the wallet.

If they ask which wallet can they keep/store Bitcoin, I do correct them that it is 'which wallet can they use for Bitcoin' is the correct. If I was not corrected, I wouldn't know the right answer and I wouldn't be able to correct them, also there is nothing bad to devote 2 to 3 minutes for newbies or your newbie friends to explain this to them so the world will know more about bitcoin, what I have noticed is that they easily understand this part of wallet and blockchain easily, I still consider this as the layman's part of explaining about Bitcoin to someone. And if they want to go more technical, mastering Bitcoin can be gone for.

cryptoaddictchie

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Quote from: Pmalek on September 08, 2021, 04:47:04 AM

That's why Bitcoin and traditional banks can't be compared.

Hi mate just compared it for thr purpose of storing thats all. Maybe you are right, cant really compared those two in many ways especially when we go deeper with bitcoin technicalities.

Quote from: Pmalek on September 08, 2021, 04:47:04 AM

With Bitcoin, you can have access to the same coins on the same wallets in every place of the world.

Thats the advantage of bitcoin over it. But, dont worry mate I find your explanation very clear. My first message on your quoted response is the only Im comparing.

Pmalek

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Quote from: o_e_l_e_o on September 07, 2021, 09:20:23 AM

Quote from: cryptoaddictchie on September 07, 2021, 08:57:25 AM

What i wanted to say when I compared it to bank is the wallet served as storage same like a bank.

A bank actually holds your money, be it in physical assets or on their own internal database. A wallet does not hold your bitcoin, and simply allows you interact with specific outputs on the blockchain.

To expend on what o_e_l_e_o and cryptoaddictchie were saying. Yes, your bank holds your money, but that money is centralized in that bank and that bank only. If you went to a different bank, they would have no records of what you own. That's why Bitcoin and traditional banks can't be compared.

Even different branches of the same bank can't give you access to your funds in some situations. Let me tell you what I mean. My bank has 4 branches in different locations where I live. If I want to withdraw cash from my savings account (not from an ATM with a debit card), I can only go to 2 out of those 4 locations. Because only 2 branches have cash in them while the other 2 don't keep cash in their registers.

With Bitcoin, you can have access to the same coins on the same wallets in every place of the world.

cryptoaddictchie

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Quote from: o_e_l_e_o on September 07, 2021, 12:12:59 PM

Sure, I take your points.

Damn. Your really amazing mate. When im reading your explanation I truly understand everything about OP's question in a manner technically just helping him in simple means which possibly Im sure not wrong in common guys but for the sake of right explanation you did it so well. Anyway Im sure we just both want to help those guys with all our knowledge here. Thanks for those long thread, your truly a bitcoin genius.

o_e_l_e_o

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Quote from: cryptoaddictchie on September 07, 2021, 11:35:20 AM

For example someone asked you where do you keep your bitcoin or crypto. Of course they will say "I'll used electrum wallet, Im using trustwallet, on bitcoin core wallet, imtoken wallet, metamask wallet and etc.

Sure, I take your points.

If OP was asking "Which wallet should I store my bitcoin on", then of course the answer should be about hardware wallets or open source wallets rather than needlessly correcting him about the fact that wallets hold private keys and not coins. But that is not the case here. OP was specifically asking "when you keep your bitcoin in your wallet, what is actually is kept there?" (quoted from the OP). The only correct answer to what is actually kept in your wallet is the answer "your private keys".

I don't disagree with simplifying difficult concepts to help newbies understand them as you were doing, but I do disagree with it when your simplification starts making things incorrect, as that will only lead to additional confusion for them further down the line.

Barinekapaul

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Wallet in general terms or the common idea of everyone is for storage of valuables.
The same is applicable in this when you have your private keys, and other valuables, then they are stored and kept in the wallet for safety.
So Bitcoin, Private keys, and others are kept in there.

cryptoaddictchie

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Quote from: o_e_l_e_o on September 07, 2021, 09:20:23 AM

A wallet does not hold your bitcoin, and simply allows you interact with specific outputs on the blockchain.

I get it what you are trying to say here. I know that bitcoin stays on blockchain, and wallet is simply a third party. But when we are talking with others ( not with genius like you mate) you cant explain to them that they arent holding it on their wallet, I hope you get what I meant. Anyone here uses the term wallet for that basis.

For example someone asked you where do you keep your bitcoin or crypto. Of course they will say "I'll used electrum wallet, Im using trustwallet, on bitcoin core wallet, imtoken wallet, metamask wallet and etc.

Does anyone answer it with (Im keeping it on my private key) this does not apply for normal people who understand it in common idea about wallet. Thats to deep. Anyway I know your very good on blockchain. Im just explaining my side with laymans term for common people. Obviously its the private key whats in there but for the sake of description of wallet - basically for storing we could say it somehow relates.

ShowOff

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Quote from: o_e_l_e_o on September 07, 2021, 09:20:23 AM

No, they aren't. The coins are not in your wallet. The coins never leave the blockchain. The only thing in your wallet is the private keys which allow you to interact with the network.

I could create a wallet right now and send 1 bitcoin to one of its addresses. I could then use that seed phrase to duplicate that wallet 100 times across 100 different devices. Does that mean I now have 100 bitcoin? Of course not, because the bitcoin is not in the wallet to begin with. If I spend the bitcoin from any one of those 100 wallets, then all the wallets will show zero balance, because the wallets did not contain any bitcoin to begin with. All they were doing were monitoring an address on the blockchain, which is where the bitcoin was all along.

You have a pretty technical answer here with a very easy to understand example. I have to confirm what you show above because I installed electrum on android and laptop for the same address. When I receive or transfer bitcoin from one wallet, the bitcoin in the other wallet are also lost. That is, the bitcoin we have so far are stored on the blockchain, not in the wallet. Wallets are only third party application that allow us to have private keys to interact with the network.

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Quote from: cryptoaddictchie on September 07, 2021, 08:57:25 AM

Maybe you are thinking of deeper technical explanation for that but the fact that its called crypto wallet means the coins you put there is actually inside that wallet

No, they aren't. The coins are not in your wallet. The coins never leave the blockchain. The only thing in your wallet is the private keys which allow you to interact with the network.

I could create a wallet right now and send 1 bitcoin to one of its addresses. I could then use that seed phrase to duplicate that wallet 100 times across 100 different devices. Does that mean I now have 100 bitcoin? Of course not, because the bitcoin is not in the wallet to begin with. If I spend the bitcoin from any one of those 100 wallets, then all the wallets will show zero balance, because the wallets did not contain any bitcoin to begin with. All they were doing were monitoring an address on the blockchain, which is where the bitcoin was all along.

Quote from: cryptoaddictchie on September 07, 2021, 08:57:25 AM

What i wanted to say when I compared it to bank is the wallet served as storage same like a bank.

A bank actually holds your money, be it in physical assets or on their own internal database. A wallet does not hold your bitcoin, and simply allows you interact with specific outputs on the blockchain.

cryptoaddictchie

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Quote from: o_e_l_e_o on September 07, 2021, 04:11:36 AM

This is not accurate. Your coins are not in your wallet.

Not in wallet? Okay maybe in the address where that wallet held. But thats the point of the wallet right? Stored it there.

Maybe you are thinking of deeper technical explanation for that but the fact that its called crypto wallet means the coins you put there is actually inside that wallet ( where that wallet have a blockchain address and private keys). I know for a fact that wallets have private keys, but your explanation is kinda deep for his question. Everyone knows bitcoin is always on the blockchain cause its digital currency. What i wanted to say when I compared it to bank is the wallet served as storage same like a bank. But you expound it how it differently with it.

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Quote from: a298b112 on September 06, 2021, 11:43:24 AM

So, when you keep your bitcoin in your wallet, what is actually is kept there? I mean I've learned that if I own a BTC that record will be written in a block and it is really hard to change that. That part I understood. What I don't get is why then I need a wallet?

Bitcoin is on public ledger and your wallet is holding just your private keys, or if you are using hardware wallet it may hold your seed words and pin code.
Wallets can also hold history of your transactions, used addresses, labels you made, contacts and other information.
You should always use non-custodial open source wallets with strong password and keep private key or seed words in a safe place, there is a saying in crypto - not your keys, not your Bitcoin.

witcher_sense

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Quote from: Pmalek on September 07, 2021, 05:01:32 AM

That depends. Are you the only one in possession of the keys to your deposit boxes? Do you have a way to check that no copy of the keys have been made?

Oh, you are right... The concept of retaining control over your private keys is inextricably connected with the concept of ownership over keys. If you have generated some random number, have written it down on physical backup, and later put it under the mattress, it doesn't mean you now "own" it because you can't claim ownership of mathematics. However, as long as you are the only person who knows this random set of bits and can prove your knowledge by signing a message or transaction using the unique number, you can claim you own something unique and have full control over it.

Wallet software is simply a convenient means for storing "your" random numbers and using these for transfers of ownership.

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Why do so many people compare blockchain to a bank? Blockchain is not like a bank, it doesn't hold your "safety deposit boxes". It doesn't even record the amount of coins someone has at a particular address. Blockchain is a distributed digital ledger. You can think of it as a database that records all the transactions that took place on the network.

Pmalek

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Farewell, Leo. You will be missed!

Quote from: witcher_sense on September 07, 2021, 04:41:47 AM

It is important to emphasize that coins are always stored in the blockchain, in a big bank, so it doesn't matter what software you will choose to manage your keys: as long as you retain control over keys unlocking your personal deposit boxes, you can be sure that coins are accessible for spending.

That depends. Are you the only one in possession of the keys to your deposit boxes? Do you have a way to check that no copy of the keys have been made? With open-source software, you can inspect the code yourself if you know how to, of course. You can read security reviews or trust that someone knowledgeable enough checked the codebase. With close-source software, you can't verify the code and you have to rely on the honesty of the developers of that software.

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Quote from: a298b112 on September 06, 2021, 11:43:24 AM

I am still new to the crypto, hence question might be stupid.
So, when you keep your bitcoin in your wallet, what is actually is kept there? I mean I've learned that if I own a BTC that record will be written in a block and it is really hard to change that. That part I understood. What I don't get is why then I need a wallet?

In simple terms, the bitcoin blockchain is akin to a big bank or facility that has thousand of thousands of safety deposit boxes located inside it. Unlike in traditional banks, deposit boxes in bitcoin aren't "stable" - they are constantly changing because their size and shape depend on how many coins were attributed to them. In order to move coins to another safe, you should first "unlock" your deposit box with your own keys. Your wallet is software that keeps and manages keys to your deposit boxes. There are two types of wallets: those that keep their own copy of "big bank" with all existing deposit boxes, and those that download the data regarding only deposit boxes to which you have keys. It is important to emphasize that coins are always stored in the blockchain, in a big bank, so it doesn't matter what software you will choose to manage your keys: as long as you retain control over keys unlocking your personal deposit boxes, you can be sure that coins are accessible for spending.

o_e_l_e_o

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Quote from: cryptoaddictchie on September 07, 2021, 01:25:59 AM

A wallet is the keeper of your coin so its necessary in this kind of activity.

This is not accurate. Your coins are not in your wallet.

Quote from: cryptoaddictchie on September 07, 2021, 01:25:59 AM

You can compared that to a bank, you stored your fund there right?

Even without considering the custodial nature of banks, again this is a bad comparison. If you want to deposit fiat to a bank, then you need to send the fiat to that bank or go to the bank in person and physically hand them some cash, and you can only spend that fiat by interacting with that specific bank again. Bitcoin, on the other hand, never leave the blockchain and the only thing in your wallet are a series of private keys. You can use any wallet you like to interact with those private keys and spend that bitcoin.

If we ignore fractional reserve banking for a moment, then your fiat is physically held within the bank and the bank are the only people who can authorize its use. Your bitcoin is held on the blockchain, not your wallet, and your wallet holds the private keys which allow you to use it.

cryptoaddictchie

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Quote from: a298b112 on September 06, 2021, 11:43:24 AM

I am still new to the crypto, hence question might be stupid.
So, when you keep your bitcoin in your wallet, what is actually is kept there? I mean I've learned that if I own a BTC that record will be written in a block and it is really hard to change that. That part I understood. What I don't get is why then I need a wallet?

Simply think of it as a storage that required in order to have the product. A wallet is the keeper of your coin so its necessary in this kind of activity. You can compared that to a bank, you stored your fund there right? The only difference is you can keep your crypto on a wallet without intervention of a third party since you can make a wallet for that and no need registration requiring a lots of documents needed.

o_e_l_e_o

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Quote from: a298b112 on September 06, 2021, 11:43:24 AM

So, when you keep your bitcoin in your wallet, what is actually is kept there?

Your private keys. A private key is any number between 1 and 115792089237316195423570985008687907852837564279074904382605163141518161494336. Each private key corresponds to an address on the blockchain which bitcoin can be sent to. The bitcoin itself never leaves the blockchain. When you want to spend bitcoin from an address, you use your private key to create a digital signature to prove to everyone else that you own the bitcoin at that specific address and are allowed to spend it. You need your wallet to store these private keys and to create and sign the transactions necessary to move bitcoin around.

There's a good article about this here: https://www.ledger.com/back-to-basics-part-1where-are-my-coins

actmyname

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Wallet is analogous to an account's username and password.^* People send funds to your username. You know the password and can use the account to send funds. Bitcoin network is the platform that hosts all account transaction activity.

_{_{*heavily simplified}}

Charles-Tim

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Keys (private keys and public keys) and addresses are generated and stored on bitcoin wallet, bitcoin is stored on blockchain. The private key is needed for public key and addresses generation and also required for signing transactions while bitcoin is send to addresses and stored on bitcoin blockchain. The wallet will always synchronize with the blockchain which will then display you your bitcoin balance.

You can read these two chapters of mastering Bitcoin

For example, you have your seed phrase which has been generated before on Electrum wallet A, the seed phrase can generate your keys and addresses, if the seed phrase is imported on newly generated Electrum wallet B, if your internet connection is active, the Electrum wallet B will sychronize with the blockchain to show you your actual balance.

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