What are Crypto Wallets?

A crypto wallet is a device, physical medium, program or a service which stores the public and/or private keys for cryptocurrency transactions.

It stores our bitcoins or any other coins when we buy them.

The storage of cryptocurrency in a wallet requires digital keys, addresses and digital signatures to access your transaction.

It also helps in the functionality of encrypting and/or signing information.

To understand the basics of cryptocurrency wallet, we will first understand the basic terms required in cryptocurrency wallet.

Public Address:

You need to give the public address to the sender for receiving your cryptocurrency. Generally, it is a sequence of 27 to 34 characters which comprises digits and letters. It does not Include uppercase O and i and lowercase — o and L to avoid the confusion.

Public Key:

Public key is numeric data which allows you to receive the cryptocurrency from the senders to your wallet.

Private key:

Private key is most important and created with with random English letters and digits which uses one to one mathematical functions to generate public keys or addresses. Private key is essential to access the wallet and thus control the capital contained within in the wallet. Private key is unique in nature.

Hot wallets:

Digital wallets which are connected to the Internet are known as hot wallets. Hot wallets are popular due to its quick and easy access to your currencies but since it is connected to the internet, it has the risk associated to get hacked very easily. Generally, PIN or 2 factor authentication is recommended to access the hot wallets.

Cold wallets:

Those wallets which are not connected to the internet see cold wallets. Generally these are used to store large amounts of crypto assets or currencies. However, if the key of these wallets forgeted, it is very difficult to access the account.

It is also known as hardware wallets.

However, hardware wallets or cold wallets can be very expensive.

Hosted Wallets:

Wallets which are using another server on which you do not have any control are hosted wallets. It has high risk of getting hacked and to prevent it, many top level wallets have various levels of third party protection.

Exchange Wallets:

Wallets like WazirX or Zebpay are wallets which integrate with Crypto exchanges and you can transact and trade with these wallets.

As per Economic Times India,the following are the top 5 Crypto Wallets.

1. eToro
2. Coinbase
3. Binance
4. Huobi
5. Kraken

Apart from these, WazirX and CoinDCX are widely used in India.