The Crypto Wallet is an element that is constantly found in the world of cryptocurrencies and that is important to master. Together, we will understand what storage wallets are and why they are so essential.
Definition: what is a Crypto Wallet?
A wallet is software that allows you to store and manage your digital assets, such as cryptocurrencies. It generally consists of one or more pairs of private and public keys that are used to sign transactions and access assets such as bitcoin for example. Crypto wallets can be installed on your computer or phone, or be available online on a website. They come in several types, such as software wallets, hardware wallets and paper wallets.
The importance of the wallet
The particularity of a cryptocurrency wallet is that it does not actually store the assets. They are, in reality, on the blockchain, and accessible via a private key. This key proves that the holder is the owner of their digital assets and allows them to make transactions securely. If the private key is lost, access to the assets is therefore lost.
The different types of wallets
There are obviously several types of wallets in different forms, with simple use or complex security. The most used types of wallets are:
Paper wallets: the keys are written on a paper medium. This makes cryptocurrencies accessible and much harder to use, because they can only be used on the Internet and not like traditional coins.
Online wallets: unlike paper wallets, private keys are stored on an application or software. They make it easier to send, receive and use assets, unlike a bank account. It is preferable to use an application that is protected by two-step encryption in order to guarantee a certain security.
Hardware wallets: Keys are stored on a device such as a hard drive or USB stick that must be kept in a safe place and only connected to a computer by the owner. The goal is to strike a balance between security and ease of use.
Paper Wallet Example
The difference between a hardware wallet and a software wallet is that hardware wallets are actual physical devices used to store private keys that do not require an internet connection, thereby adding some security, while software wallets are stored locally in software or online applications.
What is a wallet used for?
Some users hold wallets containing assets, but do not really know what it is used for. Here are some of the uses of a wallet:
Send and receive cryptocurrencies to and from anywhere in the world instantly.
Control private and public keys.
Browse decentralized finance applications (dapps).
Manage all digital assets in one secure place.
Make purchases in stores that accept cryptocurrency.
Examples of popular wallets
Metamask
Metamask is an online wallet that runs on the Ethereum Virtual Machine (EVM). It is therefore compatible with any Blockchain based on EVM such as Basic Attention Token and Binance Coin.
Metamask is also known as a browser extension for interacting with Dapps (decentralized applications). It is compatible with Google Chrome, Firefox and Brave.
Coinbase Wallet
Coinbase Wallet is a standalone cryptocurrency wallet that allows you to control your cryptocurrencies, keys and data. It now allows you to securely store cryptocurrencies and rare NFTs in one place. The application supports hundreds of thousands of coins and a whole universe of decentralized applications.
In order to maintain full control over your digital assets, it is necessary to have a crypto storage wallet. Even if these days regulated crypto exchanges are reliable and secure, it is still better to store your digital assets outside of these platforms.
Ledger
Ledger is a physical wallet that allows you to store your cryptocurrencies securely and without direct access to the Internet. Since the private keys are isolated from any Internet connection, they will remain out of reach of hackers and digital threats.
In addition, the Ledger wallet is able to store a very large number of different cryptocurrencies. Indeed, it can take up to 5,500 coins and tokens with the help of its application, from a computer or smartphone.
In order to maintain total control over your digital assets, it is necessary to have a crypto storage wallet. Even if these days regulated crypto exchanges are reliable and secure, it is however better to store your digital assets outside of these platforms.
