What is cryptocurrency wallet?

Cryptocurrency wallet is a digital address in the network used to store, send, or receive transactions on the chain. An Address is usually a string of alphanumeric characters. The wallet is typically some type software/app that syncs data with the blockchain network.

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How cryptocurrency wallet works?

Every wallet is locked by the private key (string of alphanumeric characters). By private key, you can unlock your wallet and interact with your wallet. Your private key is everything. First of all, you have to stay aware all time, because there is a big risk, that someone can steal your private key.

There are thousands of cases every day, that someone has stolen the private key to the cryptocurrency wallet. Hackers are very forward in this because they use high-end malware, spyware to search private key on your computer. Keep safe your private key! Probably the best option is non-computer version – just rewrite it on paper.

There you can see some bad stories:

Most of all cases happened because people did not keep their private keys safe. It is only up to you, to keep private key safe from hackers. However, for all these possible risks, there is a solution in the form of hardware wallet. Hardware wallet opposite to online wallet will protect you from all possible frauds and attacks on your private key. If you want to know more, how hardware wallets works see our next article about cryptocurrency hardware wallets.

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Rules, that can you keep safe:

  • When you unlock online/desktop wallet, be careful, that your PC is clear of any viruses.
  • Never save your private key to PC.
  • Never hold your major part of a portfolio on any exchange.
  • Always have turned on anti-virus and firewall on your PC.
  • Be careful on fake sites of online wallets (for example someone can make the exact copy of popular online wallet myetherwallet.com with the similar name and when you type there your private key, you are in risk of steal).
  • Invest in hardware wallet. Currently, it is the safest way, how to store crypto coins.