What Are Cryptocurrency Wallets?

Cryptocurrency wallets are software programs that store private and public keys and interface with various blockchain to enable users to send and receive digital currency and monitor their balance. It is the equivalent of a bank account where you can both deposit and withdraw funds from (though only the latter with cryptocurrency).

Cryptocurrency wallets store private and public keys and facilitate the sending and receiving of digital currency and monitor all transactions to protect from identity theft. The private key is used to authorize payments, while the public key is used to access received funds.

Cryptocurrency wallets can be hot, meaning that they are connected to the internet, or cold, meaning that they have no internet connection. When deciding whether to use a hot wallet vs a cold wallet, you need to consider several factors: while hot wallets are often more user friendly, they also carry a higher risk of loss of funds due to their internet connection.

What Are the Main Types of Cryptocurrency Wallets?

Paper Wallets

Cryptocurrency paper wallets are a secure way to hold your cryptocurrencies. Think of them like a savings account with no withdrawal limits. A paper wallet contains both the public and private key for your wallet. The wallet can be used to receive cryptocurrencies from other people. It is also possible to send cryptocurrency to this address if it is generated with a genuine random number generator (RNG).

They are simple, secure and offline alternatives to digital cryptocurrency wallets. They have all of the benefits of paper money while also providing the unique ability to securely cold-store digital currency without any possibility of a hacker or malware gaining access to your funds.

Hot Wallets

Cryptocurrency hot wallets are also known as web wallets or online wallets.These types of wallets are used to make small, frequent payments while requiring the least amount of effort from the individual and/or organization.

Cryptocurrency hot wallets are a digital wallet used to store cryptocurrency funds. A hot wallet is an online system and can be accessed from anywhere as it does not require any physical access to the unit. For example, Coinbase is a popular exchange platform for buying cryptocurrency in the U.S. and Europe, but they also have a web-based digital wallet which allows users to store Bitcoin, Litecoin and Ether, among other coins.

MetaMask is another popular hot wallet.

Cold Wallets

Cold wallets refer to any method of storing cryptocurrency which keeps the private keys of your coins offline, preventing any form of hacking, stealing, or unauthorized access. Paper wallets and other cold wallets are considered to be more secure as compared to hot storage solutions such as online and software wallets, which make transactions much easier but are often less secure due to security issues.

How to Use a Bitcoin Wallet

CoinMarketCap Alexandria has a guide that teaches you how to use a Bitcoin wallet here.