Those who are interested in buying, selling, or trading cryptocurrency will already have a crypto wallet. This may not be something you are familiar with, and it may have you wondering what is a crypto wallet, but it is something quite simple.
No matter what unit of cryptocurrency you deal with, it does not exist without a crypto wallet or digital wallet.
While crypto wallets do not store digital tokens or coins, they are required for you to be able to use digital currency in transactions.
What Does a Crypto Wallet Do?
As we have mentioned, a crypto wallet or digital wallet does not hold crypto coins. It is not a storage space for tokens or digital assets but rather a digital representation of the currency.
Crypto wallets store the private keys that are required to access your cryptocurrency accounts.
This means that digital wallets are a form of online storage, but they do not work in the way you may have once thought. Crypto wallets act as a secure space for private keys to be stored.
Without private keys, you cannot access cryptocurrency accounts and therefore cannot use your digital assets in trading, selling, or other transactions online.
How Do Crypto Wallets Work?
Cryptocurrency wallets come in two forms, and each works to securely store private keys which are needed to access digital assets.
The two kinds of crypto wallets are hot storage and cold storage wallets.
Hot storage crypto wallets, which are also referred to as online wallets, store private keys securely but also allow users to continually access their digital assets from an internet browser. Much like some online stores can save banking details for a faster checkout, a hot storage crypto wallet is a way of securely keeping private keys while also allowing ongoing access.
Cold storage wallets require users to have a physical piece of hardware before they can access their private keys.
Both kinds of crypto wallets can be designed to store a specific kind of cryptocurrency, such as one for Bitcoin exclusively, but there are options for those which accept multiple forms of digital asset at once.
How to Trade Crypto
Cryptocurrency is providing users with a glimpse into what is certain to be the future of banking and cash as we know it. As moves are made to turn transactions into the digital world, cryptocurrency allows for private and secure payments to be made no matter where you are in the world.
If you want to get ahead of the game and start working with cryptocurrency early, it is quite easy to get started.
Registering with Swyftx, which is an online currency exchange platform, gives you access to over 250 digital assets as well as global trading.
This is a great platform for all things cryptocurrency, and there are resources available that can make it easy for you to open your own crypto wallet, as well as educational articles that can make the world of digital trading accessible.