What is a Crypto Wallet? (And How to Get One)

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Kitty Mayo
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Crypto wallets are used to store private keys allowing anyone to hold crypto assets in a safe manner. They are also required for performing blockchain transactions including buying, selling, and receiving cryptocurrencies such as Ethereum or Tezos.

Despite what many believe crypto wallets technically do not "hold" anything they merely store your private keys that allow you to confirm your ownership of tokens on the blockchain.

Crypto wallets come in many different forms including hot wallets (like Metamask or Rainbow), hard wallets (Like Ledger or Trezor), or paper wallets (like uhh paper!). Choosing the right type of wallet when getting started generally comes down to preference.

As you build up on-chain assets you will likely want to leverage a mix of all types of wallets listed to improve security.

Why Are Crypto Wallets Important?

Without a crypto wallet it can be difficult to interact with many decentralized and web3 applications. Crypto wallets enable you to control and store your assets including cryptocurrencies, and NFTs, as well as perform blockchain transactions. If you lose the private keys your wallets are storing you lose access to your money and goods.

Its important to treat your crypto wallets and private keys with a high-level of care and security there are many stories of people who have become too relaxed in their security measures and suffered wallet hacks as a result. You want to take as many measures as possible to prevent this for yourself.

How Do I Use Crypto Wallets?

How you use a crypto wallet will depend on the type of wallet that you choose. Each will have its own operating procedures and feature sets owing to its complexity or security. Paper wallets will be the easiest to set up, as they are just a set of keys stored on paper/metal but are most limited in functionality.

Hot wallets can be set up and used like a chrome extension and are generally what beginners will start with. To learn more about the different types of crypto wallets available to you continue reading.

Types of Crypto Wallets

There are 3 generally accepted types of crypto wallets each coming with their own pros and cons. Ranging from simple and low cost solutions to expensive options that promise greater transparency and accessibility.

Selecting the right crypto wallet type for yourself will come down to preference.

1. Paper Wallets

  • Paper wallets are the most basic type of wallet available. They are literally your keys written on paper or metal. They offer the highest degree of security but lack accessibility as they are entirely offline.

2. Hot Wallets

  • Hot wallets are generally app or software solutions (such as chrome extensions) that enable you to store your keys on your computer in an accessible yet secure manner. They offer the benefits of flexibility while providing a medium level of security.

3. Hard Wallets

  • Hard wallets are typically usb-like devices that are used to store your private keys offline in a way that's still accessible online once a user has connected their wallet to a computer. They provide a higher degree of security than hot wallets while also providing a wide range of features.

Concluding Thoughts

The crypto wallet that you choose to utilize when interacting with web3 applications and storing your crypto related assets will ultimately come down to your personal preferences. With that being said it's always suggested to maintain a hard wallet due to their hardened security when contrasted with hot wallets.

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