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Managing Your Bitcoins Whether you're mining solo or as part of a pool, with one computer or with many, eventually you will have some bitcoins. Once you get them it is important to handle them properly. Let's go over the wallet and how your Bitcoins are stored in practice. When you run a Bitcoin client for the first time, it creates a Bitcoin wallet. The wallet contains your private keys, made of long blocks of random letters and numbers, that are meant to be kept secret. These keys are what allows your Bitcoin client to spend and, you to effectively own, your bitcoins. From each private key, a public key and corresponding Bitcoin address are created. When someone sends you some bitcoins, their Bitcoin client uses their private key to sign the bitcoins over to one of your addresses. This transaction is broadcast to the bitcoin network and later recorded in a block. The important point to know here is that bitcoins aren't actually sent anywhere. They are instead assigned to addresses. To send bitcoins to yet another address the private key of the address that owns them will be required. This means you need to secure and backup your wallet to protect it against theft, virus attack, or loss 23 Introduction to Bitcoin MiningPDF Image | Introduction to Bitcoin Mining 2012
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