If you’re wondering how to use those cryptocurrency wallets you’ve heard so much about, you can take a look at this guide, which explains what they are, how it all works, and which ones are the best.
What’s A Crypto Wallet?
A cryptocurrency wallet is a collection of public and private keys that are stored in a software program. This program interacts with different blockchains so that a user can receive and send digital currency, as well as keep track of their crypto balance. If you’re interested in using Bitcoin or any other type of cryptocurrency, you’ll have to use a digital wallet for them.
How Does A Crypto Wallet Work?
It’s a bit of a misnomer–digital wallets don’t operate like traditional wallets, because they don’t necessarily store currency. As a matter of fact, cryptocurrencies are not stored in single locations, and the whole point is that they don’t exist in a physical form–it’s all on the internet and on the blockchain, which are basically records of all the transactions that have taken place using a specific currency.
Instead of storing currency, you use your crypto wallet to store private and public keys. These keys interact with the blockchain, and this is how you conduct all your operations such as sending money and monitoring your balance. When someone sends you Bitcoins, they sign ownership of the coins over to the address of your wallet. To be able to unlock those funds and spend the coins, the private key that’s within your wallet has to match the public address, which the currency is assigned to. There’s no actual, real-life exchange of physical coins.
What are the Types of Crypto Wallets?
There are several different kinds of wallets that can be found on the Crypto Intel Hub homepage which give you access to digital currency, and these can be broken into three categories:
- These wallets are either online, mobile, or desktop. For desktop, the wallet is downloaded and installed on your laptop and this has high security. Online, wallets run on cloud technology and are very easily accessible, however everything is run by a third party which makes you vulnerable to theft. Mobile wallets are on your phone, are simple and small, and can be used anywhere as you shop.
- These wallets have the highest possible security, as it’s a printout or physical copy of your keys. Usually it has a QR code, which you can scan to a software program in order to use your funds.
- For these wallets, your keys will be stored on a USB or other such hardware device. They make transactions online, but exist offline, which provides you with more security, and they’re very easy to handle.
Which Crypto Wallet is the Best?
You have a lot of options for wallets. In order to pick what’s best for you, ask yourself these questions:
- Do you plan on using one currency, or multiple?
- Do you need to access your wallet on the go, or only when you’re at home?
- Do you want to use your crypto for buying things, or are you just investing?
Think this over, then choose the best wallet for your situation.