What Is a Crypto Wallet?

A crypto wallet holds the private keys to your digital assets. Your cryptocurrencies, which live on the blockchain, can only be accessed through your crypto key. 

A crypto wallet keeps your private keys safe and allows you to send and receive cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH). 

Crypto wallets also provide the interface where you can enact crypto transactions. Through your wallet, you can: 

  • Manage all your crypto assets in one place
  • Send and receive crypto from anywhere in the world
  • Shop at stores that accept cryptocurrency 

Important note: Just as you will not be able to enter your apartment if you lose your key, you can lose access to your crypto holdings if you lose the keys to your crypto wallet.

What is a crypto key?

A crypto key is a very long string of numbers that serve as the password to your holdings. With this password, you can access, receive, and transfer your cryptocurrencies.

There are two types of crypto keys: a public and a private key. They are paired to provide more security when storing your digital assets.

The private key gives you access to your funds. It should not be shared with anybody as it proves your ownership of your digital assets. Meanwhile, the public key is crucial when receiving funds to your wallet and sending funds to others.

What is the benefit of having a crypto wallet?

Crypto wallets can come in various forms, including hardware and online wallets. The hardware wallets look like USB drives, which you can plug into your computer only when you need them. Meanwhile, online wallets like Trust Wallet of Binance provide convenience because it’s readily accessible.

  • Airtight security: Crypto wallets involve highly secure sign-in procedures and encrypted log-in details, apart from other layers of security, to ensure that no one else but you can access your crypto.
  • Portfolio management: Crypto wallets give you a bigger picture of your crypto portfolio. You’ll see the value of all your holdings in real-time and you have access to graphs and analysis tools that will help you make informed financial decisions, reduce risk, and maximize your income-earning potential.
  • Ease of use: Another benefit of using a crypto wallet is simplicity and ease of use. Most crypto wallets provide diverse user interface (UI) options. The user can choose the one that makes the most sense to them.

On top of that, most crypto wallets have a dedicated support team that helps users make the most of its features.

Gas fees

When you use a crypto wallet, you’re bound to incur gas fees. Gas fees are the payment you make for every transaction that’s validated on the blockchain. These fees usually go to blockchain miners who provide the computational power needed for these processes. 

If you think gas prices for cars fluctuate, then prepare yourself for a wild ride with gas fees. Gas fees, in the true crypto spirit, are volatile. In addition, they’re affected by two factors:

  • Block time – the time it takes to create new blocks on the blockchain
  • Transaction throughput – the number of transactions a single block can process

As a rule of thumb, the faster the block time and the larger the transaction throughput, the cheaper the gas fees.

The best crypto wallet to use

Now we come to the big question–what is the best crypto wallet? Ultimately, it all boils down to your preferred features, but you can start with these popular choices.

MetaMask

MetaMask aces everything a crypto wallet must be: easy to use, secure, and feature-rich. Users can store and trade ETH and other ERC-20 tokens, as well as transact with any Ethereum address. People can also use MetaMask to browse other decentralized apps. For these reasons, it is one of the best hot wallets.

AAX

Some users go beyond a typical crypto wallet and store their funds in an exchange instead. Let’s take AAX as an example. As one of the most prominent crypto exchanges, AAX allows users to trade Bitcoin and dozens of other top cryptocurrencies. You can also trade crypto for fiat. 

The exchange operators at AAX are also responsible for your funds’ security, which means they’ll work with you to keep your crypto safe. In addition, the digital asset exchange can help pursue action if there is ever a security breach.

Shop wisely for the perfect crypto wallet

Digital security is forever regarded as a hot topic in the crypto space, which is why your choice of crypto wallets matters a lot—much more than the choice between a Birkin or a Louis Vuitton bag. There are a lot of crypto wallets out there, and there is even the option of storing your keys in a hot wallet or a cold wallet. A hot wallet is online digital storage for cryptocurrencies, while a cold wallet is offline storage, such as a USB device.

Whichever you choose, keep in mind that the stakes are high. And that the hunt for the perfect crypto wallet will be just as exciting as the hunt for your next it bag.

Tags

Choose a language