A Bitcoin wallet is a piece of software that you use to communicate with the Bitcoin network and then you can tell the Bitcoin network when you want to send and receive transactions. The best way to understand a Bitcoin wallet is by comparing it to email.
Once you set up an email address, you need some sort of software that will allow you to send and receive emails to that new address. Now, this software may be an app on your phone, it may be an app on your laptop, it may even be an app online that you log in to.
For email, you enter the username and the password for your email address, you enter that into the app and that’s how the internet knows that it’s really you that wants to send and receive emails to that address. Of course, you tell everybody the email address and you have to do that in order for anyone to be able to send you a message. But, just because someone knows your email address, that doesn’t allow you to send emails from that address, does it?
If they could, that would be bad, because then they could send emails and pretend to be you and cause all kinds of problems. In order to be allowed to send email from a particular email address, you have to know the password. If someone finds out your email password, then there’s nothing stopping them from logging into your email app and sending messages.
This is very similar to how Bitcoin wallets work. Every Bitcoin account has 2 elements to it. One of them is called your public address, which is kind of like your email address and one of them is called your private key which is your password. So just like email, you can give anyone your Bitcoin public address and then anyone, anywhere in the world can send you some Bitcoin.
They don’t need to know anything else about you, all they need to know is the public address and they can send money to you. Now your Bitcoin private key, on the other hand, is the one thing you must protect. It’s called your private key for a reason because you should never reveal this to anybody. If someone gets your email password, that’s pretty bad because they can start sending emails from your address but that’s not quite as bad as someone getting your Bitcoin private key because they can actually then steal all of your Bitcoin by sending them somewhere else.
Just like email, once a Bitcoin transaction has been sent, it’s a one-way trip. The only way to get it back would be for that person to send it back to you voluntarily. So Bitcoin literally works like digital cash, once you’ve handed it over, the Bitcoin belongs to that other person.
The same goes when you receive Bitcoin. If someone sends it to you, it’s yours and no one can take it away from you. The only way they could do that is if they knew your private key and of course now you know never to give this or reveal it to anyone.
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