A Bitcoin wallet is set up in ten minutes, and that is exactly where the danger lies. The app asks for a password, shows twelve words, lets you tick a box, and the first receiving address is already there. Skip a step in those ten minutes and you often notice months later, when the phone is broken and nobody can reach the coins any more.
This guide works through the setup in the order in which it happens, and says at every point what goes wrong if you cut it short. That holds for Bitcoin just as it does for most other wallets, because the technical underpinning is the same.
What a Bitcoin wallet actually stores
The word is misleading. There is not a single bitcoin inside a wallet. The coins exist solely as entries in the Bitcoin blockchain, a ledger that thousands of computers worldwide keep at the same time. What the app on your device holds is the private key: a very large random number that can move those entries.
Everything else follows from that. Whoever holds the key can spend the coins, regardless of who bought them. Whoever loses it can move nothing, and no office exists that issues a replacement. No hotline, no ...
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