A crypto wallet is an essential part of cryptocurrency investment and allows you to store your digital assets.
Here’s a quick rundown of what constitutes a crypto wallet, how it works and why every serious cryptocurrency investor should have one.
What is a Crypto Wallet?
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Just like a real wallet, a crypto wallet lets us store our Bitcoin and other cryptocurrencies.
It can come in either hardware or software type. It’s often referred to as a crypto wallet, a cryptocurrency wallet, virtual wallet and so on.
Imagine having a kind of storage where you can put your Bitcoin. In this case, you’ll be able to put your cryptocurrency in through the use of a private and public key.
How Does a Cryptocurrency Wallet Work?
The main difference between a physical wallet and a crypto wallet is that a crypto wallet doesn’t store fiat currency. It takes cryptocurrencies in the form of a private and public key.
A public key works like a bank account number, while a private key works like a PIN number. A transaction, or a transfer of Bitcoin can happen when you send X amount through the recipient’s public key.
When a user wants to spend his or her crypto, all they need to do is put in the private key, and voila! transaction completed. The good thing about cryptocurrencies is that they work in real time no matter where you are in the world.
It’s worthy to note that the private key is essentially the key to your assets, and if someone were to acquire them then they will have control over your digital assets. It’s recommended that you keep your private keys hidden and secure so no malicious entity can get them. You can also back it up to prevent accidental loss.
Crypto Wallet and Exchange Platforms
Investors who use a crypto exchange platform will certainly need a crypto wallet where they can store their private keys.
The best crypto exchanges will often have a sort of crypto storage option for its users. Although they maintain that your digital assets will be safe and kept under layers of security, it’s still a wise move to put some of your money in a crypto wallet.
So maybe you ventured into crypto trading, and with the help of a trading software you were able to make a lot of money. The best thing to do is to transfer some of them to a crypto wallet for holding. You can leave some for making an action such as buying or selling but then a significant part should be in storage.
Click here if you wish to learn how to make money using a crypto trading software.
Cryptocurrency is an exciting new frontier in fiat and investment aspects. The idea of a decentralized money that can be transferred in an instant and foregoes the need for a middleman is certainly an attractive prospect for everyone. Bitcoin is on the rise, and its technology, Blockchain is being recognized as a useful tech for apps and disrupting traditional processes.