What is Wallet

In the context of cryptocurrencies, a wallet is the medium that stores a user’s private keys that grant him/her access to their digital tokens.

 

Crypto wallets do not actually store a user’s digital currencies; the digital crypto assets are on the blockchain. Crypto wallets only store the digital signature that asserts your ownership over them.

 

Keys can be stored in several ways, offline or online. Offline wallets are often referred to as cold wallets. For example, some users save their private keys on paper wallets; other users employ hardware wallets.

 

Some crypto wallets are online and are commonly called hot wallets. Hot wallets could consist of a software downloaded by a user and handled by him/her locally on their desktops or mobile phones, or they can be an interface managed by third parties.

 

Some hot wallets are mobile apps. This type of wallets can be more convenient for beginner crypto users who are not so tech savvy because executing transactions is easy, but they entail some risks. For instance, online wallets could be more vulnerable to cyberattacks. Cold wallets are more resistant to attacks but can be more difficult to use.

Wallet

A wallet is the medium that stores a user’s private keys that grant him/her access to their digital tokens.

Related terms

Virtual machine Weak Hands Wick User interface (UI) Wrapped Ether (WETH) Volatility

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