CRYPT.
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What are cyrpto wallets?
You can't fold up a bitcoin and put it in your wallet. Yet you can hold the keys to your crypto by using a crypto wallet of your own.
A crypto wallet is a software program or physical device that allows you to store your crypto and allow for the sending and receiving of crypto transactions. A crypto wallet consists of two key pairs: private keys and public keys. A public key is derived from the private key and serves as the address used to send crypto to the wallet.
How do crypto wallets work ?
Blockchain is a public ledger that stores data in what's known as "blocks." These are records of all transactions, the balances held at any given address, and who holds the key to those balances. Crypto isn't stored "in" a wallet, per se. The coins exist on a blockchain and the wallet software allows you to interact with the balances held on that blockchain. The wallet itself stores addresses and allows its owners to move coins elsewhere while also letting others see the balance held at any given address.
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While each wallet has its own specific nuances, here are the general steps involved in sending or receiving funds using a crypto wallet:
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To send funds:
You need the address of the receiving wallet. Locate the "send" feature in your wallet and enter an address of the wallet you intend to send coins to. Select the amount of crypto you'd like to send, and click "confirm." Consider sending a small test transaction before sending large amounts of crypto. Note that sending coins requires a fee that will be paid to miners in exchange for processing the transaction.
To receive funds:
you need to retrieve an address (also known as a public key) from your wallet. Locate the "generate address" feature in your wallet, click it, then copy the alphanumeric address or QR code and share it with the person who wants to send you crypto.
What is a crypto wallet address?
To understand this, we'll have to know why cryptocurrencies use a two-key system.
The basic concept behind the two-key system is the following: the public key allows you to receive transactions, while the private key is necessary to send transactions. It gets a little bit more complicated when we take a look at how this ingenious system actually works.
Using two different keys (a public and a private key) is called asymmetric cryptography, which is a vital aspect of a blockchain. The two keys are connected to each other in mathematical terms.
The unique public key has its origins in the private key. This connection allows users to create unforgeable signatures, which can only be validated by other participants of the network who have knowledge of the corresponding public key.
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Let us learn the differences between an address, a key, and a wallet :
Address
An address is a randomly generated set of numbers and letters which represent a type of unique number similar to a bank account number. As an example, here is the Bitcoin genesis address - the first Bitcoin address ever: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa.Â
The difference is that an address can be created for free by anyone and within a matter of seconds without needing a third party. You can create as many public addresses as you like or need.
You can freely share your public address with others. That way, people can send cryptocurrencies to your address.