If you have been in crypto for more than five minutes, you would have like to know a wallet or crypto wallet bouncing around first. If you are a newbie in the digital world, this will help you to be more cautious in your journey in crypto currency. And if you were already from the crypto currency world, let this be a reminder to yourself.
But what exactly is a crypto wallet?
Put simply, a crypto wallet is where you store your crypto currency, digitally.
Some wallets are Custodial wallet while other are Non-custodial wallet. But in this article I will only be sharing everything about our personal Non-custodial wallet.
Since crypto currencies actually live on the Blockchain, a crypto wallet essentially acts as a window to the Blockchain where you can get access to your funds. Think of it like your normal wallet in your pocket where you can easily access your funds, but this is digital.
(You can read my article about Blockhain here)
A crypto wallet could be in your mobile devices, computers or in a tangible ledger device like the hardware wallet.
Since it is digital, it comes with a digital address, two addresses actually. These two keys are called the Private key and Public Key.
What are these keys?
This is a long sequence of characters including numbers and letters which you can access to your wallet. They actually allow you to send funds to other wallets or to receive funds into your own.
But of course there is a difference between a public and private keys. And it's imperative that you do not mixed them up.
The Public Key
Is the address you get for another party to send money to your wallet. Think of it like a postbox, anyone can leave a message or an invitation to its address, but once it's deposited, they can not get that letter back. They would be needing the master key or when it comes to crypto, they would need the Private key.
Private Key
The Private key provides ownership of the assets associated with the particular wallet. It provides full access to all the stored funds. Going back to the postbox example, with the master key, the postman has full access to all of the letters inside and it can whatever you like to that.
This is why a Private Key Management is essential. Whoever holds the private keys had access to the entire wallet. Never share your Private Key to anyone. Sharing your Private Key is as good as handing your hard-earned money over to someone else. Public and Private Keys may look similar so be careful that you don't mixed them up and send the wrong key. Another very helpful way of understanding all of this is to compare your wallet to a digital safe, where your code (a.k.a Private Key) is the only way to get it.
Since this is crypto where the security and sovereignty over your assets comes first, it doesn't stop there. There is still one little phrase you need to be aware of - the Seed Phrase.
Seed Phrase
One of the most important part in your crypto wallet. It is composed of twelve (12) different words that serves as a recovery phrase and a back up if anything happens to your device. You can use the seed phrase to restore all access to your wallet and your funds. It's like all of your crypto public addresses and private key combined into a one simple format. Like your Private key, if anyone knows your seed phrase, it means they can get access to your funds and drain your entire wallet. It is very important that you must write down these phrases and keep it in a secure place. Please write it down in a piece of paper or you can save it in a folder for future uses.
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Image sources : Lead Image
Image 1 : Crypto Wallet
Image 2 : Public and Private Keys
Image 3 : Seed Phrase
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