BTC Wallet

How Bitcoin Wallets Work

Bitcoin wallets hold a user’s keys, allowing users to receive bitcoin, sign transactions, and check their account balance. The private and public keys held in a bitcoin wallet serve two distinct functions, but are tied together in creation.

Bitcoin wallets contain a user’s keys, not their actual bitcoin. Conceptually, a wallet is like a keychain in the sense that it holds many pairs of private and public keys. These keys are used to sign transactions, allowing a user to prove they own transaction outputs on the Blockchain i.e. their bitcoin. All bitcoin is recorded on the blockchain in the form of transaction outputs.