What is a crypto wallet?
A Cryptocurrency wallet is an app that allows storing cryptocurrencies to retrieve their digital assets. Crypto wallets store your private keys, keeping your crypto safe and accessible, also you can send or receive cryptocurrencies using Cryptocurrencies wallets like Bitcoin and Ethereum.
Cryptocurrency wallets are apps you may run on a mobile or computer. also, you can buy a physical device that runs a wallet app.
The first cryptocurrency wallet was introduced by Satoshi Nakamoto when he first released the bitcoin currency in 2009. Bitcoin is the most famous cryptocurrency, it depends on blockchain technology that has emerged, any of them can be stored cryptocurrency wallet. wallets can hold multiple cryptocurrencies.
Why Crypto wallets is important?
Crypto wallets technically don't store your crypto. Your holding lives 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 key then you are losing your assets that's why it's important to keep your hardware wallet safe.
What is the difference between Private keys Vs Public Keys?
Crypto wallets normally use two types of keys Public keys and Private keys.
Public keys operate like your bank account number. A public key is a long string of random numbers. This key allows you to receive cryptocurrency in transactions by using a wallet address, which is essentially a compressed version of the wallet's public key.
Private keys always are kept private. the private key allows you to access the actual cryptocurrency on the blockchain. if anyone has access to your private keys, it's as good as having access to the crypto in your wallet.
Why are crypto wallets important?
The main types of wallets you can choose from include.
Paper wallets are written on physical paper and stored in a safe place. This makes using crypto harder because digital money can be used on the internet.
It's stored in a thumb drive device that is stored in a safe place and connected with the computer when you want to use hardware wallets. the idea is to try to balance security and convenience.
The keys are stored in an app or software, that is protected by two-step encryption. This makes sending, receiving, and using your crypto as easy as using an online bank account, payment system, or brokerage.
Paper and hardware wallets are harder for malicious users to access because they are stored offline, they are limited in function, and risk factors are lost or destroyed. Online wallets are offered by a giant exchange like Coinbase, Binance, etc.
Types of crypto wallets:
Generally, crypto wallets are divided into two categories Software and Hardware, but actually a number of different wallet types that fail into those categories.
Let’s take a look at the three most popular types of crypto wallets.
Hosted wallets are simple and easy to set up. Hosted wallets are directly hosted on the exchange where you can buy your crypto, If you ever bought cryptocurrency on an exchange such as Coinbase or Kraken and kept that crypto on the exchange you are already using a hosted wallet.
With a Hosted wallet, the crypto exchange generally holds on to your private key for you. this private information is kept and accessed online. hosted
wallets have limited in their uses, and you may not be able to execute crypto transactions when you buy an NFT, The exchange has ways to help you retrieve that data when you lost your password.
A non-custodial wallet allows you to have complete control over your crypto with no third-party involvement. These software wallets typically offer more features and freedom as compared to hosted wallets. also with these wallets, you can be accessed using a private key that's in your control. it's important to keep safe. if you lose your key then you are not able to access your assets
Hardware wallets are also known as "cold wallets" Hardware wallets are physical devices. they look like a USB stick, your private key for accessing your cryptocurrency on a blockchain is stored on this device. A hardware wallet is not connected with the internet and physical form. a hardware wallet is considered to be the safest way to store cryptocurrency