What Is a Crypto Wallet?

Introduction

Getting a secure crypto wallet is one of the first steps towards getting into the business of trading cryptocurrencies. The term “wallet” is used as a figure of speed in this case because these are digital currencies we are talking about. A crypto wallet is a secure place where you store your proof of ownership. Crypto wallets often come into two forms: a mobile app and a hardware wallet (similar to a USB stick). However, all these types of wallets function similarly. The private key allows you to sync your wallet across multiple devices. This allows you to send, receive and spend cryptocurrencies.

Do you need a crypto wallet?

A crypto wallet represents your identity when you buy cryptocurrency such as Bitcoin. Its address defines how you buy and sell cryptocurrency, which is recorded on the blockchain. Technically, you can just leave your cryptocurrency on the exchange you bought them from, or write down the wallet address and passkeys for safekeeping. However, it’s safer to have your digital assets safely secured in your wallet than leave them in an exchange, especially centralized exchanges, which you do not have much control over.

 

What does a crypto wallet do?

It’s in your wallet where you will organize your crypto portfolio. A crypto wallet comes with a private key that allows you to access the wallet’s contents. This private key is what will ensure you- and you alone- can access your crypto assets. Other than storing your crypto assets, a crypto wallet will allow you to securely send and receive cryptocurrencies

One important point to note is that a crypto wallet does not hold any actual crypto asset. A crypto wallet holds the public and private key information needed to transact cryptocurrencies. The actual place where cryptocurrencies are stored is blockchain, which is a form of digital ledger that serves as the foundation for how cryptocurrency works.

 

What is the difference between a public key and a private key?

Public keys are like your bank account number, which you can share with a third party without compromising the security of your digital assets. This long string of random numbers allows you receive cryptocurrencies. When sharing a public key, it’s usually compressed and made a wallet address. This wallet address is what you share out with anyone who wants to send you crypto assets.

On the other hand, we have private keys, which is the secret code that allows you to access the actual crypto assets on the blockchain. Private Key should be guarded just like you guard your ATM card pin because any unauthorized access allows the third party to access and transact your crypto. It’s more like someone having your online banking password and security questions. A good crypto wallet must be secure, easy to use, and compatible with multiple cryptocurrencies.

 

Conclusion

While crypto wallets bring with them multiple benefits, including independence, it’s your responsibility to ensure your private key is safe. Private Key is the super-secure password you need to access and use your crypto assets.