Crypto wallets are the gateway to crypto currencies and tokens. But what is a crypto wallet? What’s inside them? How do we fund them with crypto currency and use them to make purchases in stores that accept crypto currency?
In this post, we will explore these questions together. We will take a deep dive into crypto wallets, so you can understand what they are and how to get started with them.
Let’s start with the basics. What exactly is a digital wallet?
A digital wallet simply means that it exists in electronic form only, not physical material like cash or coins. It is basically an app or software program you can use to send and receive digital currencies.
As for how it works, the wallet application stores private keys that are used to access your crypto currency addresses and sign transactions on the blockchain. The best analogy I have heard is this: think of your crypto wallet as a mailbox where anyone who has its address (and knows what door to knock on) can drop a letter in your mailbox and leave. But not everyone who knows the address has access to open it or take something out of it.
How did crypto wallets get started?
The first digital wallet was actually created by Satoshi Nakamoto, he is credited as being the creator of bitcoin, which I’m sure you’ve heard of. Satoshi Nakamoto designed bitcoin to be used as digital cash, meaning that it had the technical functions required for people to send and receive money with minimal fees.
The first crypto wallets were simply software programs developed by Satoshi Nakamoto on which you could install the bitcoin client (the original version) – similar to installing a computer application on your phone.
The Top 10 Digital Wallets
1. Coinbase
2. Blockchain
3. Bitcoin Core
4. Exodus Wallet
5. MyEtherWallet
6. Electrum Wallet
7. Jaxx Wallet
8. Coinomi Wallet
9. Samourai Wallet
10. Airbitz
Of course more digital wallets are being created every day. Many NFT Marketplaces are now offering their own digital wallets. Coin exchanges are offering their own crypto wallets. Coin creators are creating their own wallets too. Blockchain makes this all possible.
What is a digital wallet address?
A digital wallet address is a unique identifier that is assigned to your digital wallet. It is used to receive and send digital currencies.
When someone wants to send you crypto currency, they will need to know your digital wallet address. This is how you will receive the crypto currency into your digital wallet. You can also use your digital wallet address to pay for products and services online that accept crypto currency as payment.
Many digital wallets also allow you to create a QR code that can be scanned with a mobile device for easy receipt of payments.
How do I fund my crypto wallet?
To fund your crypto wallet, you will need to have some crypto currency in your possession. You can buy crypto currency on exchanges or from people who own it. Trading crypto currency is a big business these days, so it shouldn’t be hard to find someone who wants to sell. You can also mine your own digital currencies but that’s another topic for another time!
Once you have crypto currency in hand, the next step is transferring funds from an exchange or person into your digital wallet. The best apps make this very easy to do.
You can also get crypto currency by earning it or “mining” for new coins, but that’s a whole other topic in itself!
How are digital wallets used?
Digital wallets are designed specifically for sending and receiving digital currencies – just like your email app is meant to send and receive emails.
As a digital wallet owner, you have complete control over your funds. You can store them on the exchange from which they were purchased or transferred into your own secure digital wallet. Or you could use both for increased security if desired!
Many crypto currencies allow people to remain anonymous as well – another great feature of cryptocurrency exchanges and wallets.
What types of digital wallets are there? What’s the difference between them all?
There are many different crypto wallet options available. There is no one-size fits all solution when it comes to storing your digital currencies. You will need to choose what works best for you and your needs, but before anyone invests any money into digital wallets, it’s important to understand the different types available.
The most common digital wallet types are:
– Hot Wallets – these wallets are connected to the internet and therefore more vulnerable to being hacked. They are usually used for spending or exchanging crypto currencies as they offer fast transactions. Examples of hot wallets include Coinbase and Blockchain.
– Cold Wallets – these wallets are not connected to the internet and are therefore more secure from hackers. They are usually used for storing large amounts of digital currencies or for long term storage. Examples of cold wallets include Bitcoin Core and Exodus Wallet.
– Paper Wallets – these wallets are just what they sound like! Printed paper that stores your digital currency information. They are a more secure option for long term storage and can be generated on many different crypto wallets.
– Hardware Wallets – these wallets are physical devices that store your digital currency information. They are also very secure and often considered the best option for storing large amounts of crypto currencies. Examples of hardware wallets include the Nano Ledger S and Trezor.
– Mobile Wallets – as the name suggests, these wallets are designed for use on mobile devices. They are often hot wallets and are very convenient for spending crypto currencies when out and about. Examples of mobile wallets include Coinomi and Mycelium.
– Web Wallets – these wallets are typically hot or mobile wallets that can be accessed via web browser. They are very convenient for exchanging crypto currencies quickly and easily, but may not be as secure.
– Desktop Wallets – just like the name suggests, these digital wallet services run on your desktop computer. They too offer fast transactions and convenience while being a fairly secure option for crypto currency storage. Examples of desktop wallets include Exodus and Jaxx Wallet.
As you can see, there are many different digital wallet options to choose from! It’s important to read up on each one before deciding which is best for your needs – or if any work at all in the case of paper wallets.
In summary. A crypto wallet is a digital place where you store your crypto currency. The wallet can be funded with crypto currency and used to purchase products, goods and services with crypto currency. There are many different types of wallets available and it can be confusing to know which one to use. In this blog post, we will discuss the different types of wallets available and how to get started using them.
This is not financial advice, just insights to help you in your journey with crypto and be empowered!
Have an empowered day!
