Wallets

What Are “Wallets” in Crypto/Blockchain?

A blockchain wallet is a digital wallet that allows users to securely store, manage, and use their cryptocurrency assets. Some popular wallets include software wallets like MetaMask, Electrum, and Coinbase Wallet and hardware wallets like Ledger or Trezor.

Blockchain wallets work by storing a user's private keys, which are used to access and control their cryptocurrency assets on the blockchain network. Private keys are unique digital codes that are used to sign transactions and prove ownership of the cryptocurrency assets.

Blockchain wallets come in many forms, including desktop software wallets, mobile wallets, and hardware wallets. Each type of wallet has its own security features and user interface, but they all operate on the same basic principle of storing private keys.

When a user wants to send or receive cryptocurrency, they initiate a transaction using their wallet software. The transaction is broadcast to the blockchain network, and other users on the network use their private keys to validate and confirm the transaction.

Once the transaction is confirmed by the network, the user's wallet balance is updated, and the transaction is recorded on the blockchain ledger as a permanent and tamper-proof record.

Overall, blockchain wallets provide a secure and convenient way for users to manage and use their cryptocurrency assets on the blockchain network, while maintaining full control and ownership of their private keys.

Unlike legacy financial platforms (including bank accounts and credit cards) where sharing your account information with someone else to complete a transaction theoretically allows them to steal your information and spend your money elsewhere, the segregation of your private and public keys protects your assets from unauthorized access.