What is a Cryptocurrency Wallet and why you need A Cryptocurrency Wallet?

A cryptocurrency wallet is very different to your physical wallet.

Cryptocurrency wallets don’t store cash or your coins – Instead, cryptocurrency wallets store your public and private keys.

Without these keys you can’t send or receive your currency.

Public keys are like your bank account number and can be freely distributed to anyone.

So what is a private key?

Think of a private key as being like the PIN number for your bank account.

You use your private key to communicate with the coin’s blockchain which stores the ownership information and latest currency transaction records.

Only you should have access to your private key.

Never divulge your private keys to anyone.

If anyone else gets access to your private keys, they will also have access to your coins and can make unauthorized transactions.

Now If you store your cryptocurrency on an exchange such as Coinbase or Binance then these exchanges will hold your private keys for you.

So don’t panic if you didn’t receive your private keys.

You will never get given your private keys by an exchange unless you decide to withdraw your coins from the exchange into a private wallet.

The benefits of this are that it allows you to make trades in real time.

But if a hacker manages to hack the exchange then this means they can potentially steal yours and millions of other exchange users private keys.

In order to store your private key, you need to have a cryptocurrency wallet.

Now some coins will have their own official wallet, while for others you’ll need to use a third-party wallet like an exchange-based wallet.


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