Crypto FAQ: What is a crypto wallet?

You have crypto questions. We have answers. This week we cover: What is a crypto wallet?

What is a crypto wallet?

A crypto wallet is a device or program used to send, store, and receive cryptocurrencies. Behind the scenes, the wallet stores cryptographic information used to access and send from a blockchain address.

Think of it like a personal bank account for your cryptocurrencies, but without the bank.

How does a crypto wallet work?

Even though we use the word “wallet” when talking about storing cryptocurrencies, these wallets actually just control blockchain addresses and secure this control through cryptography. They do not actually “hold” anything inside of them – the crypto addresses do.

Each Bitcoin wallet contains a set of secret numbers, or private keys, that are used to sign Bitcoin transactions, giving the person with the keys control over the crypto at that address. If someone has access to a wallet’s private keys, they can move the crypto anywhere they like.

How do I keep my crypto wallet safe?

With cryptocurrencies becoming targets for hackers, crypto safety is critical.

• Protect your wallet with a strong password.
• Use two-factor authentication for signing-in.
• Never share your account information or seed phrase (also known as your private key recovery phrase) with anyone.

What if I lose access to my crypto wallet?

Accidents happen, devices get misplaced, and things break. Most modern crypto wallets have a twelve-word seed phrase, which can be used to restore the wallet if a device is lost or damaged. These words should be stored in a safe place since anyone who finds them can access your cryptocurrency.

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