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What is a Crypto Wallet?

A cryptocurrency wallet is a secure digital wallet used to store, send, and receive digital currency like Bitcoin. Most coins have an official wallet.

In order to use cryptocurrency, you’ll need to use a cryptocurrency wallet.

Some wallets are built for a single cryptocurrency, some can be used for more than one coin, some wallets you’ll manage yourself, and some (like those found on exchanges) will be custodial.

Suffice it to say, there is a range of wallet types to choose from.

Below we discuss how digital wallets work, talk about the different types of wallets, and give some advice on which wallets to use in which situations.

Each wallet type is a little bit different, but in general, any given wallet will work with one or more cryptocurrencies and will be able to store one or more cryptocurrency-specific “public addresses.”

Public addresses are like cryptocurrency-specific account numbers, they can be used to receive a specific type of cryptocurrency (for example, to receive Bitcoin, you need a Bitcoin address) and can be shared publicly.

Each address relates back to all transactions associated with that address on a coin’s blockchain.

A wallet lets you view balances associated with an address and lets you move funds around on the blockchain as long as you are the owner of the address.

Proving you own the address is done with a private key (a secret code associated with a public address) in non-custodial wallets. In custodial wallets, the custodian (a third party like an exchange, broker, etc) holds the key for you, and it is just a matter of inputting your password into their wallet app.

Essentially a wallet is like your online bank account platform, your address is like your account number, the blockchain is like the bank’s ledger, and with custodial wallets, the custodian is a bit like your banker.

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When you own crypto assets, you need a secure place to store your funds. You probably already realize that you shouldn’t store them on exchange and that a hardware wallet is the best way to protect your private keys. The Ledger Nano S and the Ledger Nano X are some of the best hardware wallets out there, if you'd like to get the Ledger Nano Bundle you can use the Ledger Black Friday Deals in order to save on your purchase.

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