Types of Crypto Wallets
When it comes to choosing a crypto wallet, there’s a couple of things to be aware of. Just like a safe has a key to open it, your private keys are you “key” to open your digital wallet and gain access. Lose the key, and you lose the safe, so to speak.
What is an NFT or cryptocurrency wallet?
We store our identification, or our gift cards, or our pictures of loved ones, or even traditional currencies such as us dollar in our physical wallets. In recent years, this has transitioned to our phones or applications which are digital representations of what used to be physical items.
Now, crypto wallets can be quite confusing to understand because logically you would assume that since we are buying digital assets (such as NFTs or cryptocurrency) we would need a digital space to store those – such as a crypto wallet. However, this is incorrect and they’re not anything like their physical counterparts.
Since NFTs and cryptocurrency are stored on the blockchain, everything you own can only be accessed using a private key and you can think of this like a password. A crypto wallet interacts with the blockchain by using these private keys to execute transactions.
So, assets such as NFTs or cryptocurrency never actually leave the blockchain. Instead, they’re transferred from one address to another. If you don’t know what a blockchain is – it’s essentially a long ledger of transactions and information, and in the case of NFTs, it includes information such as buyers sellers and other metadata, which is all publicly available.
You can think of your crypto wallet as an encrypted virtual keychain which has all the information you need to access your cryptocurrency and NFTs.
Further Reading & Credits