What is a Crypto Wallet?

Crypto wallets are designed to store your private key, keeping your crypto accessible at all times. They also allow you to send, receive, and spend cryptocurrencies like Bitcoin and Ethereum.

Crypto wallets keep your private keys – the passwords that give you access to your cryptocurrencies – protected and accessible, allowing you to send and receive cryptocurrencies like Bitcoin and Ethereum.

Why are Crypto Wallets Important?

Unlike a normal wallet, which can hold actual cash, crypto wallets technically don’t store your crypto. Your holdings live on the blockchain, but can only be accessed using a private key. Your keys prove your ownership of your digital money and allow you to make transactions. If you lose your private keys, you lose access to your money. That’s why it’s important to keep your hardware wallet safe.

How Do You Use a Crypto Wallet?

Crypto wallets range from user-friendly apps to more complex security solutions. The main types of wallets you can choose from include:

• Paper wallets: Keys are written on a physical medium like paper and stored in a safe place.
• Hardware wallets: Keys are stored in a thumb-drive device that is kept in a safe place and only connected to a computer when needed.
• Online wallets: Keys are stored in an app or software – look for one that is protected by two-step encryption.

Each type has its tradeoffs. Paper and hardware wallets are harder for malicious users to access because they are stored offline, but they risk being lost or destroyed. Online wallets are more convenient but come with additional risks such as phishing and hacking. Enabling all security features and using hardware wallets for large holdings is recommended.

Using an app like a crypto wallet manager gives you access to your holdings. You can:

• Manage all your digital assets in one place
• Control your own private keys
• Send and receive cryptocurrency globally
• Use usernames instead of hexadecimal addresses
• Browse decentralized apps (dapps)
• Shop at stores that accept cryptocurrency

Different Wallet Platforms

The main wallet platforms include those integrated into crypto exchanges and independent wallet apps. Exchange apps typically manage your private keys for you and are suitable for trading and investing. Independent wallets allow full control over private keys and are better for interacting with decentralized applications.