A crypto wallet is a software program that stores your crypto. Think of it as your own online private bank that only you can access, no one in the world has access to your username and password as well as the 12 word seed phrases your wallet will provide when you first download the wallet to your mobile device. If you ever lose your phone you will need the 12 seed words to download the wallet back on your phone. Crypto wallets store your private and public keys that allow you to send and receive crypto from other people. Your private keys (always keep this private) are your key to your crypto, be sure to store it somewhere safe, I suggest you write it down somewhere you won’t forget. The blockchain makes this possible. You will learn about blockchain in another chapter.
Many of the exchanges and wallets may allow you to access by using your desktop or laptop computer. It’s pretty safe but if hackers are after you because you made a ton of money and blasted your results across the internet and social media, there are hackers out there. If they can hack governments and big business, they may be able to hack you if they know your IP address. You might want to get a Virtual Private Network (VPN) which can mask your IP address and make it appear to be in another country. That tip will be $20.00, just kidding.
The majority of wallets you will need are downloadable on your smartphone. As a mature gentleman in his sixties, this was a real challenge for me. I had no idea how to really navigate the wallets on my phone. I had no clue how to copy and paste using my smartphone. I can tell you this, when you start collecting different tokes and coins (your money), you will learn real fast. I’m still learning but I now understand the basics. Prior to crypto, I had no idea. There is hope that if I can learn it, anyone can. Take my word for it.
Online wallets are also known as “hot” wallets. Hot wallets run on internet-connected devices like computers, phones, or tablets. This can create vulnerability because these wallets generate the private keys to your coins on these internet-connected devices. While a hot wallet can be convenient, they may lack security. We happen to have both. We suggest if you accumulate a large amount of crypto, use a cold wallet for your crypto storage.
The safest option for storage of your crypto is known as a cold wallet. The cold wallet is a wallet that is not connected to the internet and therefore stands a far lesser risk of being compromised. These wallets can also be referred to as offline wallets or hardware wallets.
These wallets store a user’s address and private key on something that is not connected to the internet and typically come with software that works in parallel so the user can view their portfolio without putting their private key at risk. They look similar to a and work similar to a flash drive you may currently use on your computer.
