What are Wallets? – simply explained

A wallet in crypto has the same purpose as your physical wallet storing your fiat money. It basically allows to access, receive and send different forms of cryptocurrencies.

To makes sure that only you have access to your funds every wallet gets unlocked by a unique private key. Only one individual (the owner) should have access to this key. Moreover, the public key is a second key that can be used to receive tokens/coins. The public key can, therefore, get exposed to others without reducing the risk of losing your funds.

There are a wider range of different wallet types. The most popular ones are shortly discussed in the following section.

• Hot wallets: This wallet is connected to the internet. Most hot wallets have good usability and possess an intuitive interface. However, their permanent connection to the world wide web makes them more vulnerable to hacker attacks.

• Hardware wallets: These wallets are physical devices with the purpose to securely administrate your cryptocurrency funds. They offer the same functions as all other wallets but a higher security standard.