Are you thinking about trying Cryptocurrency?
As you are searching about Cryptocurrency wallets, we are assuming that you are thinking about trying your hands in the Crypto market to make money.
In the last few years, Cryptocurrency has become more popular.
In fact, you might be hearing a lot of news about the Crypto market. More investors are investing their money in the Crypto space. Also, giant companies are adopting the increasing culture of Cryptocurrency.
Digital payment platforms are providing easier access to Crypto coins and making them more accessible for the common people. More nations, retailers, and businesses are accepting Cryptocurrencies as an alternative to the traditional fiat currencies.
El Salvador has become the first-ever country to legalize the use of Bitcoin, the most popular Crypto. It means, just like the traditional fiat currency, you also can use your Cryptocurrencies there.
If you also want to start Crypto investments, you first need to set up your Crypto wallet. Here, in this article, we will provide you with a complete guide on Crypto wallets.
What Is A Cryptocurrency Wallet?
Just like you use your usual wallet for keeping your money, a Cryptocurrency wallet is being used for storing your Crypto coins.
It is basically a software program which stores public and private keys and also interacts with different Blockchain in order to enable users to receive and send Cryptocurrencies along with their balance.
In case you are thinking about buying or selling any type of Cryptocurrency through any of the best Crypto trading platforms, like the bitcoin era, first, you need to get a Cryptocurrency wallet.
When you are expecting someone to transfer any Cryptocurrency to you, you are required to provide them with the public key. It is like your traditional bank account number and other details that are required for a money transfer.
On the other hand, private keys are really confidential, so you need to use them to access your own Crypto Coins. You should not share your private key with anyone. In case someone finds your private key, they will be able to access your Cryptos and make transactions with them.
How Does That Work?
So, now that you know what a Cryptocurrency wallet is, it is time to know how these digital wallets actually work.
In order to keep it simple, we often think that Crypto wallets are for storing Cryptocurrencies, which is not the case. When it comes to Cryptocurrencies, they do not get stored in a single location, or they do not exist anywhere in any type of physical form.
All that exists are basically the transaction records that are stored on the Blockchain.
As we have mentioned in the previous section, Crypto wallets are nothing but software programs which store your private and public keys, and it also interfaces with different types of Blockchains.
This way, the user gets the ability of monitoring their balance, transfer money along with conducting other operations.
It means that when an individual sends you their Crypto coins, they are actually signing off ownership of the coins to the address of your Crypto wallet.
In order to become capable of spending those Crypto coins and unlocking the funds, the private key that is stored in your wallet has to match the public address to which the Cryptocurrency is actually assigned.
When the public and private keys match, the balance in your Crypto wallet increases, and accordingly, the senders decrease. So, you see, there is no actual exchange of real currencies or coins.
This particular type of transaction of Crypto coins is signified merely by a particular transaction record on the Blockchain. And you will see a change in the balance in your Crypto wallet.
Different Types Of Crypto Wallets
Now, it is time to know the different types of Cryptocurrency wallets. You have plenty of options to choose from as per your convenience and requirements. Here are the different types of Crypto wallets.
- Mobile Wallets.
- Web Wallets
- Desktop Wallets
- Hardware Wallets
- Paper Wallets
Set Up Your Cryptocurrency Wallet
Setting up your Crypto wallet is extremely easy. You just need to follow some simple steps.
- First, you need to select what type of wallet you want to use.
- Then you need to download or buy the wallet.
- After that, install the software.
- Once you are done with the installation, you need to provide your credentials and set up an account as necessary security features.
- Finally, deposit your Cryptocurrencies, and you are done.