What is the 'Cryptocurrency Wallet'?

in #sct2 years ago
  • 'Cryptocurrency wallet' is a software that tracks the secret keys used to digitally sign cryptocurrency transactions for distributed ledgers.

  • Secret keys are the elements in the cryptocurrency ecosystem because they are the only means of verifying ownership of digital assets and executing transactions that transfer or change them.

  • Without the cryptocurrency wallet, there is no way to prove ownership of digital assets.

  • There are two types of cryptocurrency wallets, hardware and software, called 'cold storage wallet' and 'hot storage wallet' respectively.

  • Hot storage wallets can be accessed through Internet services such as cryptocurrency exchanges that offer online wallets. Cold storage wallets, on the other hands, are downloaded and offline on hardware such as USB drives or smartphones.

  • Cold storage wallets are inherently more secure than hot wallets in that they are not connected to the Internet. This is because most cryptocurrency attacks are done by hackers attacking online wallet services to transfer secret keys to their wallets.

  • But the biggest problem with cold wallets is that if you lose your device without backing up your information or keeping a printed copy in a safe place, you lose your digital assets forever.

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