🧰What is a crypto wallet?

What is a crypto wallet?

Put it simply, a cryptocurrency wallet is a piece of software which is used to store and manage your cryptocurrencies and tokens.

If you want to dive into the world of cryptocurrencies, you must first create your wallet, even before knowing in which currencies you want to get into.

Indeed, it is the tool that will help you manage your cryptocurrencies.

Each crypto wallet has a private key that allows you to access its content. However, the crypto wallet is not only intended to put aside the Bitcoins and Ethers that you exchange.

It also allows you to send and receive cryptocurrency securely.

There are several types of crypto wallets, such as mobile apps like ours, and wallets that look like USB drives. However, most crypto wallets work more or less the same way: they store combinations of public and private keys that allow you to sync your wallet across multiple devices in order to send and receive cryptocurrencies.

How do crypto wallets work?

In general, crypto wallets come in software or hardware form. Although each type of crypto wallet works differently, all are designed to give you secure access to your cryptocurrency.

Be aware, however, that a crypto wallet does not contain any cryptocurrency; it only holds the public and private key information necessary for cryptocurrency transactions. Cryptocurrency is stored in a blockchain, which serves as a digital ledger for decentralized cryptocurrencies.

Public & private keys

Two types of keys are linked to crypto wallets: public keys and private keys.

Public keys work the same way as a bank account number. A public key is a sequence of random numbers that can be shared with a third party, for example during a cryptocurrency exchange, without compromising the security of your wallet. This key allows you to receive cryptocurrency, often in the form of a wallet address which is a shorter version of the wallet's public key.

Private keys must in principle, as their name suggests, remain private. They allow you to access cryptocurrency in the blockchain. Therefore, if someone has access to your private keys, that person also has access to your cryptocurrency.

In crypto, we say "not your keys, not your coins"

Seed phrase

A seed phrase is a sequence of words, often 12 or 24, serving as your wallet recovery key.

You can understand the seed as your masterkey, the key to import and export all your public and private keys.

Non custody

A non-custodial wallet is considered to be important and safe to use because it gives the user complete control over their funds. This means that the user is the only one who has access to their private key and therefore has the ability to access and manage their own funds.

In contrast, a custodial wallet is one where a third party, such as an exchange or a bank, holds the user's private key and controls their funds. This means that the user is reliant on the security measures of that third party, and if they are hacked or experience a security breach, the user's funds could be at risk.

With a non-custodial wallet, the user is responsible for their own security, and they can take measures such as securing their private key with a strong password and storing it in a safe and secure location. Additionally, many non-custodial wallets also offer additional security features such as two-factor authentication, which adds an extra layer of protection to the user's funds.

Another advantage of using a non-custodial wallet is that the user can have full control over their funds and transactions. They can make transactions and transfer funds without the need for approval from a third party, and they can also have full visibility over their transaction history.

In summary, a non-custodial wallet is considered to be important and safe to use because it gives the user complete control over their funds, making them responsible for their own security. It also offers greater flexibility and transparency in terms of managing their funds and transactions.