Bitcoin in Practice

Congratulations to everyone who has made it this far. You have come a long way – we went through perhaps slightly dry but important history, tackled more demanding technical foundations such as blockchain, proof of work, full nodes, and even questions of privacy and security. Some parts may have been more difficult to understand, you may have had to read certain passages more than once, but I believe that today you have a much clearer picture of Bitcoin than at the beginning.

If you have made it this far, I believe this book has at least somewhat convinced you, or at least encouraged you to reflect on the idea that Bitcoin can have its place in today’s world – whether as an investment, a means of payment, or a form of personal freedom.

In this section, we will move from theory to practice. This part is intended for everyone who does not just want to read about Bitcoin, but also wants to try it in real life. We will show how to get your first bitcoin wallet, buy your first satoshis, safely send and receive them, and use them in everyday life. Don’t worry, we will go through everything step by step, simply and, I hope, clearly. Many people are afraid that entering the world of Bitcoin is too technically demanding, but today there are applications and wallets with simple, user-friendly interfaces similar to regular mobile banking.

Bitcoin Wallet

The first and one of the most important steps is creating your own bitcoin wallet. Let’s choose one together. You can choose between a hardware wallet (cold wallet) and a software wallet (hot wallet). If you just want to try Bitcoin, experiment with it, and make a few transactions, a software wallet will be sufficient. These are free, but they carry a higher risk of theft and loss of bitcoins since they are connected to the internet.

If Bitcoin is meant to serve as a long-term investment (for example, retirement savings), I recommend choosing a hardware wallet from the very beginning. Yes, there is an initial investment required, but we are talking about tens of euros – not hundreds. Always buy a wallet new directly from the official manufacturer or an authorized reseller. Never buy a hardware wallet “second-hand”!

Which Hardware Wallet to Choose?

For me, definitely Trezor by SatoshiLabs. Why Trezor? It is the oldest hardware wallet on the market – it has existed since 2014 – and has therefore stood the test of time and earned the trust of millions of users over more than a decade. It is an open-source device, which means that anyone can inspect its source code. This significantly increases security (regular audits) – if it contained bugs or intentional backdoors, the community would uncover them. Trezor has the trust of the community, and in the crypto world, that is one of the most important qualities.

SatoshiLabs is a Czech company founded by Marek “Slush” Palatinus – if this name sounds familiar, you are not mistaken. I have already mentioned him in the book; Marek founded the world’s first bitcoin mining pool – Slush Pool (now known as Braiins Pool), together with Pavol “Stick” Rusnák and Alena Vránová. SatoshiLabs offers several models. It should be said that regardless of the model you choose, each provides top-level security. (Well, okay – I am slightly exaggerating. Newer models include a secure element – a special security chip to protect the private key. However, older models are also secure if you use a so-called passphrase, which we will discuss later.)

Historically, the first model is the Trezor Model One. It is a basic, affordable wallet – and it was also my first one. A higher model is the Trezor Model T, which has a touchscreen, supports more altcoins (which is not important for a bitcoin user), and additionally supports Shamir Backup – a method of splitting the seed into multiple parts, but we will get to that later.

In 2023, the company introduced two new models:

• Trezor Safe 3 – the successor to Model One, but with a modern design and a security chip
• Trezor Safe 5 – the successor to Model T, with a touchscreen, greater durability, and full support for all new features.

Whichever model you choose, you will not make a mistake. Personally, today I would recommend the Trezor Safe 3 or Safe 5 – they are the newest models, have everything you need, and will last you for years.

At this point, however, one warning is very important. Never buy a hardware wallet from second-hand marketplaces, auction sites, unknown resellers, or various “discount” offers from third parties. With Bitcoin, the goal is not to save a few euros. The device could have been modified, repackaged, or prepared in a way that allows an attacker to access your funds later and you might not be able to detect it.

A hardware wallet is a security device. In practice, it is your personal vault for money. If you were buying a safe for your home, you probably wouldn’t choose a used one from a stranger.

For that reason, I strongly recommend purchasing directly from the manufacturer. This ensures the origin of the device, intact packaging, and minimizes the risk of tampering before you even set it up.

Below you will find links to the official products. If you decide to buy a device through one of them, you can also support this book and my work  the price for you does not change, but I receive a small commission that helps me continue creating content:

• Trezor Model One
• Treyor Model T
• Trezor Safe 3
• Trezor Safe 5