What is a crypto wallet?
A cryptocurrency wallet is a gadget or application that saves the user’s private and public keys. Thanks to this, you can easily manage and dispose of assets.
There are the following types of crypto-wallets
- Custodial — centralized programs that are managed by a third party. Not only do the users have access to keys, but also the others.
- Non-custodial — decentralized programs that do not own any user data.
Another classification of cryptocurrencies is by network connectivity. There are hot and cold crypto wallets.
Hot wallets are permanently connected to the Internet. These are applications that give fast online access and are suitable for storing small amounts of funds.
Cold ones do not have an internet connection. They can be flash drive-like devices or keys written on paper. They suit for holding large amounts of cryptocurrency that you store for later use.
How do Crypto Wallets Work?
Technically, crypto is not stored on a crypto wallet, but in a blockchain. A crypto wallet only stores the private and public accounts to which the funds are deposited. Therefore, we can distinguish three main elements of wallets:
- private key — an alphanumeric code that must not be known to anyone except the owner.
- public key — a code that the user receives assets.
- SEED phrase — a secret 12/24 word phrase that users can use to regain access to the wallet.
How to make a crypto wallet?
It all depends on what type of purses you choose. If these are cold wallets, you will need to select them, buy them and generate for it private and public keys.
If you chose a hot purse, you should choose a platform, register, remember the SEED key phrase, and keep a close eye on your wallet’s security.
A crypto wallet is a device with which you get to conduct crypto transactions. They come in different types. Proceed from your needs and volumes of assets to choose the best crypto wallet.