Every cryptocurrency owner needs a blockchain wallet. And there is a significant difference between a purse and a cryptocurrency wallet. If the first is the vault for money itself, then a cryptocurrency wallet is a vault for keys that give access to money.
In order to choose the best cryptocurrency wallet, you need to understand how it works.
Main task of cryptocurrency wallet is to keep your private and public encrypted (cryptographic) keys untouchable. These keys give access to work with the blockchain and transactions.
Public key - the address of your wallet for the crypt. And the private key is the password that gives access to the “repository”. If someone wants to send you a transfer in the crypt to the wallet, he will need your public key. To transfer the received money to another person, you will need a private key to confirm the transaction.
If the crypt wallet only stores keys, then where are the digital coins stores? They do not leave the blockchain, and in blocks only transaction records are changed.
There are several types of crypto wallets:
- Paper - this is a cryptocurrency wallet in the form of a piece of paper, on which are recorded public and private keys. It is inconvenient to manually enter them each time, but the keys are securely protected from hacking.
- A hot wallet is a rather primitive crypt wallet that works through a browser or a simple program. Allows you to pay very quickly and conveniently. But security is not so smooth - if something happens to the service or account will be hacked, money can be stolen.
- Cold wallets, or hardware - this is a purse for digital money in the form of a flash drive that connects to a computer when you need to complete a transaction. This is secure storage device, as it works from any device and is not permanently connected to the Internet. In the case of hacking or problems with the device, the money will be safe.