A cryptocurrency wallet, or more specifically, address (Public Key) is where you store your funds and it’s accessible just in one way, using your Private Key.
Let’s start with the concept of Public Key and Private Key:
In the image above, we have a Bitcoin Address or Public Key and the associated Private Key, which is something that has to be kept safe and possibly have more copies of it.
If you lose your Private Key, you won’t be able to access your address and therefore use your funds.
The Public Key represents the address where you can receive or send your funds and the Private Key is the one you use to access it. Every Public Key has its own and unique Private Key and both will be created when you generate a new address (Public Key).
Important: Before talking about wallets, you need to know that you can generate a new address and use it to store your funds or import it in a wallet to manage your cryptocurrency and make transactions.
- Bitaddress (Bitcoin)
- MyEtherWallet (ETH & ERC-20 Tokens)
- MyCrypto.com (ETH & ERC-20 Tokens)
- NEO Tracker (NEO & NEP-5 Tokens)
What’s a Wallet? A wallet is the software you use to access your funds, which are not in the wallet di per se, but rather on the blockchain as it supposed to be.
The wallet is the main interface you use to manage your funds and it can support just one cryptocurrency, or be a multicurrency wallet where you can store (manage) different cryptocurrencies.
How many wallets do we have? We have different kinds of wallets like:
- Hardware Wallet: These wallets are usually small hardware devices with a small screen on them to log in and confirm transactions; at today these are one of the best ways to store your funds since the private key never lefts the device, which is offline while not used.
They support multiple cryptocurrencies and are very user-friendly. Also, they have a recovery passphrase that you MUST keep safe and use in case your device gets compromised.
In the image below a Nano Ledger Hardware Wallet
- Paper Wallet: As the name says, these wallets are printed on paper, where you will have displayed your Public Key (Address) and Private Key. This is a great way to store your funds if you want to keep them for a long period; usually, it’s advised to make multiple copies and keep them in different places, also plasticize them is a further layer for long-term safe storage.
Example of Bitcoin Paper Wallet
Example of Ethereum Paper Wallet
Example of NEO Paper Wallet
- Desktop Wallet: Desktop wallets are the software you install on your terminal. We have native wallets which are dedicated to that particular cryptocurrency like Bitcoin has its own, Monero, DASH, these all have a native wallet designed just to store them alone, and multicurrency desktop wallets where you can store different cryptocurrencies all in one place.
They also have a recovery passphrase that you can use in case you lose access to your wallet.
Important: Usually the multicurrency desktop wallets do not give access to your private keys; in opposition, the native wallets, as the cited above, always provide you private key associated with the public key (address).
Examples of some multicurrency desktop wallets are:
- Smartphone Wallet: You can also have a wallet on your smartphone which can be downloaded in the app store on both Android an iOS. You can find single currency wallets and multicurrency wallets from different platforms like Jaxx, Conomi, Bitcoin.com, btc.com, etc.
- Web Wallet: If you keep your funds online, then you are using a web wallet, it can be as the other cited single/multicurrency and it’s the less advised to use.
When your funds are online in a wallet or exchange platform, they’re hackable, therefore, you risk to lose your funds, also you don’t have access to your private keys.
NEVER LEAVE YOUR FUNDS ONLINE OR ON THE EXCHANGE PLATFORMS for more than its need for your trading.
An example is Coinbase, which is also a cryptocurrency exchange
But how to get a wallet? When we talk about “Hardware Wallets” you simply have to buy one, it can be a Ledger Nano, Trezor, KeepKey or any other available on the market, here’s the list. We always advise to buy a hardware wallet through the official websites and always brand new, NEVER SECOND-HAND WALLETS!
For the “Paper Wallet” you can find different websites like:
These will allow you to make a Bitcoin, Ethereum or NEO Paper Wallet and print it out.
Advice: Try to run the wallet generator offline, if possible, in order to add an extra security layer to the process and remember that paper is easily breakable so plasticize them and make multiple copies.
“Desktop and Smartphone Wallets” can be downloaded on the official websites or app store and “Web Wallets” don’t need a software download, just remember your login details and use “Google Authenticator” for extra security.
How do I check my funds? Since we have a public ledger we can check live our funds’ movements and the total balance on our address. This can be done with a tool called “Block Explorer”.
Every public blockchain (Bitcoin, Ethereum, etc.) has its own block explorer and it’s easy to use and available to everybody on the web. You don’t need an account to log in, you just need the public key (address) and a device connected to the web (PC, Laptop, Smartphone) to use it.
How to check a Bitcoin (BTC) address:
How to check an Ethereum/ERC-20 Token address:
Important: ERC-20 Tokens are all hosted on the Ethereum Blockchain, therefore, if you possess any of these tokens, you can also check them with the two Ethereum Blockchain Explorers cited above.
How to check a NEO/NEP-5 Token address:
Important: NEP-5 Tokens are all hosted on the NEO Blockchain, therefore, if you possess any of these tokens, you can also check them with the NEO Blockchain explorer cited above.
Now you know how to generate a new address, which kinds of wallets you can use and how to store, manage and check your funds’ transactions with a block explorer. We always recommend to use just the official and trusted web portals when comes to Public and Private generation and usage and remember to keep your private keys safe and more copies of them.
Hope you enjoyed this guide and see you in the next one!