#Best crypto wallet software#
Your balance will increase, and theirs will decrease proportionately.ĭepending on the type of technology used, cryptocurrency wallets are typically divided into three types: Cold, hot, and paper wallets.Įach has its own distinct characteristics and knowing how they differ will help you pick the best wallet for your needs.Ī hot cryptocurrency wallet is actually a software program used to store your cryptocurrency. When someone "sends" you Bitcoin, what they're doing is making a record on the Blockchain that those coins now belong to your wallet, represented as a unique address. The keys stored on your wallet allow you to interface with the blockchain, to access your crypto, to send or receive it, and to check your balance. The blockchain (or blockchains, since there are more than one) is a public ledger of every cryptocurrency transaction ever made. You see, crypto isn't actually stored anywhere. These are used to validate transactions on the blockchain. What your wallet actually stores are called public and private keys. Second, crypto "storage" doesn't involve storing crypto.Like crypto itself, the solution for storing crypto must be digital. That means you also can't keep it in a bank vault. You can't just stuff it in a real wallet, or your pants pocket, or under your bed. How do these wallets work? It helps to understand the nature of crypto. In the broadest terms, a crypto wallet is a way to store your cryptocurrency and keep it safe. You might use a cold wallet or even put it in an interest-earning account.īelow, review your options for storing crypto and how they differ.
While some people keep it on the exchange where they bought it, there are many other options. Now that you bought some crypto, where are you going to store it?
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