What is a crypto wallet?
Crypto wallets are software program that lets user interact with the blockchain, enabling users to send/receive digital currencies. Also, we can say crypto wallets are interface that lets user interact with blockchain in a secure way.
Every wallet would consist of a public and a private key.
Public key in layman terms is your bank account number and it can be shared. It is used when you want to receive crypto currencies from other users.
Private key is your password and thus, should not be shared with anyone. This key also lets the blockchain verify the ownership of the coins.
Mnemonics are phrases that let users generate one or more wallets. Usually a mnemonic has 9 to 24 words that are scrambled lets you to safely recover one or more wallet . These mnemonics should be kept private and never be shared with anyone.
Types of wallets:
Cold wallets or Hardware wallets, with their main feature to store private keys offline. While cold wallets are considered to be the most secure form of wallets for crypto currencies, they do not offer the easy accessibility of currencies as these wallets do not connect to internet.
Hot wallets as opposed to cold wallets, are connected to internet and offer all functionality of each blockchain in real time. Typically, hot wallets offer many services in addition to storing private keys, sending and receiving which is a limitation of cold wallets. A single hot wallet could hold multiple currencies, making it easier for user to manage multiple cryptos.
So, we now know basics of what crypto wallets are and what each wallet consist of. Further, India recently legalised the trade of crypto currencies, which again should give a green signal for the development of crypto currency wallets in India. Do we see a world where we pay our bills using crypto wallets?
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