Desktop wallets
Like their mobile counterparts, a desktop wallet is software for PC users. Examples of desktop-based wallets include MetaMask, Exodus, and Electrum. Many of these blockchain wallets offer cold storage options for added security.
Hardware wallets
A hardware wallet takes security a step further and allows for access to your cryptos to be stored on an offline piece of hardware. The wallet can be connected to a computer via USB or other port to facilitate transfers and transactions but are otherwise a way to keep crypto access in cold storage. This offers the highest level of security, but you'll be responsible for keeping track of your security keys (like a private password only you know; more on that below). Popular hardware wallets are made by Ledger and Trezor.
Why use a blockchain wallet?
Since cryptocurrencies dwell on a public digital ledger system and are accessed via the internet, cybersecurity should be top-of-mind for those planning on using and storing cryptocurrencies for the long term. Setting up a blockchain wallet should be a high priority for investors.
How a blockchain wallet works
A blockchain wallet does not actually hold your cryptocurrency. Cryptos reside on the blockchain itself (the digital ledger system used to manage cryptos and other assets using a specific blockchain network). A blockchain wallet is simply a way to secure the digital key that controls access to the cryptos you own.
Blockchain wallet features
- Provides a way to manage multiple types of cryptos for long-term use.
- Offers a public key used for crypto transactions.
- Some wallets offer a private key that act as a "digital safe" for extra security.
Depending on the type of wallet you set up, you'll be provided with two keys. The first is a public key, which is automatically created when setting up a wallet and is used for crypto transactions. Think of it as a web address. It will be shared with other crypto users for doing things like making purchases, accepting payments, or transferring cryptos to other accounts. The second is a private key (basically a password), which is one you'll want to keep safe since it will be used only by you to manage any movement of your cryptos. These private keys will be managed by you when using a mobile or desktop software wallet or a cold storage hardware wallet.
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