What is a Crypto Wallet In Simple Terms: A cryptocurrency wallet is like a digital version of your physical wallet for storing and managing money, but instead of holding cash, it holds digital currencies like Bitcoin or Ethereum. 2 Key Roles of a Wallet 1. Storing Crypto - Keeping your crypto safe & accessible 2. Sending/Receiving Crypto - Enabling you to send and/or receive crypto Types of Wallets 1. Hot Wallets: Connected to the internet (ie apps, desktop, browser) a. Usage - Daily transactions/Trading b. Options - Exodus, Metamask, Rabby Hot Wallet Options A. Exodus Wallet : Multichain desktop & mobile wallet that allows swapping and bridging cryptocurrencies across many chains quickly & affordably B. Metamask Wallet : Browser & mobile wallet that allows for fluid integration with most decentralized applications (dApps) such as OpenSea, decentralized exchanges (DEXs) , web3 games, and more There are a plethora of more wallet options, but for the sake of brevity and simplicity we will only focus on these 2 as over my more than a decade of experience these are the best, most user-friendly options available. 2. Cold Wallets: Not connected to internet (ie Ledger Live) a. Usage - Long-term storage & security b. Options - Ledger, Trezor, Bitkey
Wallet Keys A. Public Keys: Like an email address, share it to receive funds B. Private Keys/Keyphrases: Like an email password, should never be shared, securely stored in a physical location (safe, safety deposit box, etc) , and never lost How Do Wallet Keys Work? A crypto wallet essentially works like a locked mailbox with a “PUBLIC” address and a “PRIVATE” lock. A. PUBLIC KEY = Public Address: Anyone that you give your mailbox address to can deliver mail to it, but can not send mail out of it B. PRIVATE KEY = Private Lock: Anyone with a key to the mailbox has access to remove mail from the mailbox Private Phrase VS Private Key A. PRIVATE PHRASE: A Private Phrase typically consists of 12 or 24 words that are algorithmically generated when you create your wallet. A private phrase can then be used to generate an infinite amount of wallets that can all be unlocked and accessed with that phrase. B. PRIVATE KEY: A Private Key is a string of random characters that is a 1:1 encrypted hash of a single wallet. A private key only provides access to a single wallet and CANNOT be used to unlock and access any other wallets that may come from the same Private Phrase. ATTENTION: ALWAYS BACKUP YOUR PRIVATE KEY IN A SAFE PLACE (OR SEVERAL) IN A PHYSICAL FORMAT (IE HANDWRITTEN ON PAPER)