In today’s crypto-hype, a lot of people have approached me asking what is a crypto-wallet and how do they create one. This is one of the first obstacles people have if they want to participate in initial token offerings (ICOs) or trade on the crypto market.
This was honestly also one of the main hurdles I faced at the beginning of my crypto-travel. Everybody was telling me: “You need to have a wallet, mate.” But no one explained what the wallet actually is. I was familiar with the standard banking terms like account and balance. But things like ether-wallet, address, public and private key were not familiar to me.
That’s why I decided to share this small guide on how to create your own Ether wallet. Like always, the story is actually quite simple and I’ll try to keep it like that.
What is an Ether crypto wallet?
A crypto wallet is nothing but an address from which you can send and receive crypto tokens (currencies). There are several types of crypto wallets, but I will focus on the Ether ones.
For all you crypto-newbies, it is like having a bank account. However, in this case your account number is publicly visible. Not only that. All your transaction and balances on that account are visible to anyone on the web. Too much transparency? Don’t worry. No one actually knows who is behind the account/address and no one can unlock it. It is only you who have the key to unlock the account and send coins from it.
This is one of the nicest and greatest features of the blockchain. It is at the same time transparent and anonymous. Anybody can transfer funds to your account, but you don’t necessarily know who did it? Therefore, serious blockchain companies do a “Know Your Customer” (KYC) process in the token sale process. They need to know who invested in their company. A very nice article about KYC process can be found here.
How to create an Ether wallet?
In this article, we will focus on “My Ether Wallet” a free open source interface which allows you to directly interact with blockchain and your funds. It generates a private key and a public key (address) for you. If someone knows your public key (address), they can send you ETH or tokens on it.
However, make sure that your private key is always protected. If someone gets your private key, that person will be in full control of your account and he/she can transfer the funds from your account to someone else.
These are 4 easy steps on how to do it:
Step 1: Go to https://www.myetherwallet.com/
On the interface below enter a password and click on “Create New Wallet”. Make sure you save your password somewhere secure. This password encrypts your private key and you will need both of these to unlock your wallet
Step 2: Save your Keystore File
On the next screen, you will be asked to save your Keystore File. Click on “Download Keystore file (UTC/JSON)” and store it somewhere secure. Make sure you make a backup and you don’t lose it. You can later use this file to unlock your wallet. Click on “I understand. Continue”
Step 3: Save your private key
This is where you need to save your private key. Click on the “Print Paper Wallet”. Now you can either print your wallet or save it as a document. I usually save the document as pdf and attach it to the entry in my password management application together with the Keystore file.
This is the document that you need to save or print at the end. It contains your address and your private key. After you save the key click on “Save Your Address”.
Step 4: Unlock your wallet
This is basically the last step. Here you need to unlock your wallet with your private key or your Keystore file . When participating in an ICO, the company where you want to invest, will usually ask you for an ETH address where you would like your tokens to be sent.
Click on the “Private Key” radio button and enter your previous private key from the previous page. Now click on “Unlock your Wallet”
Congratulations. You have your wallet now. 😊
You can now go to the https://www.etherscan.io and check your balance and transactions.
Summary
Basically, we have created an Ether-wallet in only 4 easy steps.
- Enter your password on https://www.myetherwallet.com/
- Save your Keystore file
- Save your private key
- Unlock your wallet
Important information for you to save and keep secure are:
- Password
- Keystore File
- Private key
Make sure you keep this information safe and secure because you will need them every time when you need to access or transfer your funds. I usually use a password management tool to safely store all these information.
Public key or the address of your wallet is the only publicly available information that you can share on the web if you need someone to transfer Ether or tokens to you.
I told you. It’s simple. :)
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