In order to do anything with Bitcoins, you will need a wallet. There a are a few different kinds, and I will explain the differences here. Each wallet has their own properties. With all wallets, the following applies:
WITH OUT YOUR PRIVATE KEY, YOU ARE WITHOUT YOUR COINS. IF SOMEONE ELSE KNOWS YOUR PRIVATE KEY THEN ALL YOUR COINS CAN AND MOST LIKELY WILL BE STOLEN.
Most software wallets come in pre compied versions for Windows, Mac and Linux. Source code is generally avaible too for you to inspect, contribute and use to build from.
These wallets are arguable the most secure, but that security comes at a price. The most popular desktop wallet is bitcoin-core, formally bitcoin-qt. Bitcoin-core comes in Windows, Linux and Mac flavours, and all the source code is hosted on github for everyone to peer review and contribute.
Pre compiled versions (which is what the average user will require) can be downloaded at here. As the disclaimer on the site says “be patient”. The wallet (or client) needs to download the entire block chain. At time of writing, this is over 14GB, and growing. While this is somewhat annoying, it is also what makes bitcoin secure and distributed. By downloading the entire block chain, you are hosting yet another copy of it making it “impossible” to shut down.
Light weight or SPV wallets
These are an excellent choice for those who what to get into Bitcoins, without the hassle. I personally wouldn’t store hundreds of coins on them because they are less secure. These wallets work by trusted servers hosting the block chain. And are these servers to be trusted? Its analogous to a Gmail or Hotmail account. You are storing your email on Google and Microsofts servers, and are trusting them and their processes. However, the advantage is that you are up and running quickly.
Online Wallets or eWallets
Online wallets are great. They are always accessible, and easy to use. They are coming out with apps to use them too. However, you are trusting a third party with your coins. And high profile online wallets make a great candidate for hackers. https://blockchain.info is by far the most popular. Coinjar.io also offer an online wallet and iPhone app solution.
Some other online wallets:
Paper wallets or offline wallets are either used for a gimmick or for storing your coins in “cold storage”. There are a number of providers that will generate a paper wallet. Effectively, its just a print out of your public (bitcoin address) and your private key.
They make a great way to transfer coins to new clients on the spot, like out our farmers market stall.
As mentioned, most of these projects are open source and not sold. This means they rely on public funding. If you like the product, then please consider a donation. Even a few millibit will add up and allow the developers to continue the making these products.
With all wallets, you are responsible for your backups. If you loose your keys, your bitcoins are gone forever. There is not 1800BITCOIN help line to call. And the family friend that normally helps you with your computer problems won’t be able to help either.
At its heart, a bitcoin address is created from a private key, which is just a large number. To backup, all you need to do is make copy of this. This can be as simple as writing it down on a piece of paper.