Crypto wallets give you the ability to securely store your private keys (that is, the passwords you use to access your cryptocurrencies) and still have them at your fingertips at all times to send and receive cryptocurrencies like BitDmark or Ethereum.
Wallets come in many forms: from “Software-Wallets”, like MetaMask, to mobile apps and “Hardware-Wallets” like Ledger (which resemble a modernized form of the USB-Flash Drive).
These methods of storage make dealing with cryptocurrencies as easy as online shopping with a credit card.
Compared to a regular wallet where you actually store your money, crypto wallets technically don’t contain crypto money. The actual crypto money is stored on the blockchain, which will need a private key to access.
The private key is the proof that you are the owner of the digital money and this allows you to make transactions. In case you lose your private key, you will also lose access to your money. Therefore, keep your wallet safe by guarding your security key phrase.
Online-Wallets: An online wallet is the easy way to get started in the crypto world. The keys are stored in a browser extension or app. With this type of wallet, sending, receiving and using your cryptocurrency is as easy as online banking or using an app such as PayPal.
Hardware-Wallets: Hardware-Wallets are the compromise between convenience and security. The keys are stored on a portable device such as a USB-Stick and only connected to the computer when you want to use your cryptocurrency.
All wallets have their advantages and disadvantages. Hardware wallets offer higher protection from malicious users as the keys are stored offline. However, the functionality is limited and there is a risk that they can be lost or even destroyed. An online wallet, offers the easiest entry into the world of cryptocurrencies, balancing the aspects of security and access.