What Is a Wallet?

Modified on: Mon, 23 May, 2022 at 12:01 PM

Every blockchain user requires a wallet in order to interact with the network. A wallet is essentially an account on the blockchain where transactions can be sent and received. It is also where one can store blockchain assets such as cryptocurrency or NFTs (non-fungible tokens). There is no personal information associated with a wallet and none is required to create one. A wallet consists of a public key and a private key. The public key can be safely shared with anyone who wishes to send assets to the corresponding wallet, however, the private key should not be shared and is the key to accessing the wallet in the event where access is lost or to create another instance.

Hot Wallet

A hot wallet is an application that is installed on a networked device and always connected to the internet. The private key of the wallet is generally stored via the application. This type of wallet is considered best for ease-of-use.

Cold Wallet

A cold wallet is a way to store private keys offline. Hardware wallets, such as Ledger, are considered cold storage as they are not exposed to a public network. This type of wallet is considered best for maximum security.

Click here to find out more about why you need a wallet.

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