What is a cryptocurrency 'wallet'?

Wallets are cryptographically encrypted places to store your cryptocurrencies. Its purpose is comparable to a bank account. The difference is that due to the decentralized nature of cryptocurrencies, no central intermediary is keeping or securing your data. Every wallet has its personal key (private key) to unlock it. We recommend to capture the key on a piece of paper as electronically stored keys can get hacked. Additionally to the private key all crypto wallets possess an address (public key) which enables other users to send and receive coins or tokens.

How to keep your 'wallet' secure

The best way to store your cryptocurrencies is with a hardware wallet. These are external physical devices you first have to purchase from third-party companies like Ledger, Trezor or Keepkey. These multi-coin wallets can be plugged-in your computer and have to be unlocked separately. This makes them safer than any other method as your private key never leaves the hardware device and you never have to manually type in your private key.

Hot wallets are another option to store your digital money. Note that these wallets are less secure because of their permanent connection to the internet. Wallet interfaces like the MyEtherWallet or MetaMask are still very popular and also connectable with a hardware wallet.

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