Introducing the crypto wallet

A crypto wallet is a device for storing, sending and receiving cryptocurrency.

Let’s look at one. You’ll notice the wallet has some familiar features like a balance, currency symbols and the ability to Send/Receive funds via addresses – which we introduced earlier. 

They are long alphanumeric strings, but for convenience there is usually a copy/paste button or even easier a QR code to scan. We’ll explain sending/receiving in more detail in the next article in this section.

Choosing a crypto wallet

As you are now familiar with the concept of custody we can take an initial look at the different types of crypto wallet, which are differentiated by custody along with two other concepts:

• Hot/Cold Wallets – Describing whether the wallet is online or offline, by default.
• Soft/Hard Wallets – Describing whether the wallet is simple software (like an App) or a physical (hard) device.

Hot and Cold Wallets 

By default a Hot Wallet is connected to the internet, making it convenient for transacting but less secure. 

Conversely, a Cold Wallet is by default offline, making it more secure but less convenient to transact. 

You may want a Hot Wallet for frequent transactions, and a Cold Wallet for hodling. In this way you can think of them as the equivalent of a current/checking account and a savings account.