By definition, a crypto wallet is a wallet that stores your private keys, keeping your crypto safe and accessible. They also have the function to send, receive, and spend cryptocurrencies like Bitcoin and Ethereum, Ripple, Dogecoin, etc. Crypto wallets keep your coins safe from hackers and threats over the internet. As we all know, hackers and scammers always find a way to get your stuff so having a crypto wallet helps protect your assets.
Of course, if you lose it that is another thing. I remember reading about a story where a person had tens of millions of dollars in Bitcoin on a private wallet but he accidently threw it in the garbage. He even offered a reward of million dollars to anyone who found it at the garbage dump. He never found it.
Wallets come in many forms such as a USB stick, mobile apps (Coinbase and RobinHood being a couple). Having a wide variety can help as hackers and scammers will not know which one you are using. I would suggest personal wallets such a USB as this provides the best protection.
How many Varieties are there?
- One wallets can be accessed through multiple devices. However, they are vulnerable to cyber-attacks and require extra security.
- Mobile wallets will require an account through your phone and provide much more security over cold wallets.
- These types are offline wallets. They are based off compatibility and allow the users to store their coins safely. These would be the USB ones I mentioned above.
- These wallets are downloaded and installed to your computer and are safer compared to online wallets. They act like hardware wallets except are less mobile but still provide safety and accessibility.
- Paper wallets by some accounts can be the safest option but this is based on opinion. They are hard copies of your generate public and private keys.
Why are crypto wallets important?
The wallet in your pocket only holds cash and cards and that is about it. Crypto wallets on the other hand store your digital currency. Though, if we are going to be technical about this, crypto wallets do not necessarily store your crypto. Your coins live on the Blockchain, and can only be accessed using a private key or public key. These keys prove your ownership and the amount of digital currency you own. They allow you to spend, receive and use the currency how you see fit. That is why these special wallets are important and should be kept safe and secure. Finding a trusted provider for your wallet is crucial. Coinbase is a good crypto exchange that offers a wallet. Also, RobinHood offers crypto as well and have a wallet you can use.
If you are going to invest and buy crypto currency, you will need a wallet. Also, if you use a physical wallet, please keep it safe. Do not be like the guy in my example above. Losing tens of millions of dollars is a horrible guilt and regret that can never be undone. Thanks for reading!