Cryptocurrency wallets are software that allows you to receive and send digital currencies or cryptocurrencies.
But if you want to know everything about them, and specifically how they work and the types of wallets, stay with us until the end of this article from Bitdemy.
Cryptocurrency wallets
As we mentioned, you can transfer cryptos (Bitcoin, Ethereum, or any other coin or token) or view your balance using wallets.
In general, to start using cryptocurrencies, you need to have a wallet. By installing a wallet software, you can create your own wallet address.
Some wallets support one crypto and some support multiple cryptocurrencies.
Crypto wallet types
In general, wallets are divided into two categories: non-custodial and custodial.
In the first type, complete control of the wallet is in the hands of the creator, and in the second type, control is in the hands of the service or another person.
For example, wallets created using trust wallet and metamask are non-custodial.
But the wallets you have on centralized exchanges are custodial.
Therefore, the characteristics of non-custodial wallets are the safest and best cryptocurrency wallets.
Of course, wallet types can also be categorized as follows:
- Software wallets
- Hardware wallets
- Online wallets
- Paper wallets and more.
(Suggested: Everything about Bitcoin)
How cryptocurrency wallets work
Usually, after installing a wallet or creating an account, the user is provided with a private key that can be used when needed to
restore your wallet or import it to another device. In fact, this personal key is completely private and anyone who has access to it can
It has access to the wallet and all the cryptos inside it, so never store it in an unsafe place or share it with anyone else.
Your Cryptocurrency wallet keeps your account information up to date on the blockchain through
nodes and displays your balance, and when you create a transaction,
It transmits your new transaction information to the blockchain through nodes.
(Recommended: Guide to Choosing the Best Cryptocurrency Wallet)
Questions and Answers
Are our cryptocurrencies stored in our wallets?
No, all transactions and ultimately balances are stored on the blockchain of that coin.
And your wallet only allows you to transfer cryptocurrencies.
Are non-custodial wallets completely safe?
No, as long as you have your wallet on a device that is connected to the internet.
Or if you store it non encrypted, you must comply with the requirements to ensure security.
What happens if we share our wallet's private keys or words with others?
In this case, the person in question has full access to the assets in the wallet.
Cryptocurrency wallets article summary
In this article, we tried to provide you with brief and useful information about cryptocurrency wallets,
Of course, this article will definitely be updated over time and other useful information will be included.
