Once a year I like to revisit sharing the basics of crypto for any newbies that may comes across my posts. This post will touch on what crypto wallets are....
Crypto Wallets
A crypto wallet is where we keep all the information relevant to our bitcoin. We use the wallet to store bitcoin and send and receive them as well.
When it comes to bitcoin (and all cryptocurrencies) your wallet information is the most important thing to safeguard.
When you open a crypto wallet you will get a wallet address. Look at this like your bank account number.
You will also receive security keys that are akin to a password for your bank account.
Before we get into the security keys, let’s first learn about the two main types of wallets.
Two types of wallets:
• Hot Wallet (also referred to as a soft wallet)
• Cold Wallet (also referred to as a hard wallet)
Hot Wallet (Soft Wallet)
A hot wallet is basically a software wallet. You download the wallet software on your machine and the wallet information is stored there.
There are many different hot wallet types, both software and web browser based.
Cold Wallet (Hard Wallet)
Look at a cold wallet the way you would a savings account. You keep bitcoin there you do not plan to transact with regularly.
There are different types of cold wallets, but in the end they are used for cold storage. Meaning the wallet and information is offline a vast majority of the time on a separate device.