What is a Crypto Wallet?
Learn about Crypto Wallets.
Do I need a crypto wallet?
Creating your crypto wallet is the starting point to your adventure with cryptocurrencies, FTs (fungible tokens such as Winkies), NFTs (non fungible tokens)…
Crypto wallets keep your private keys – the passwords that give you access to your cryptocurrencies – safe and accessible, allowing you to send and receive cryptocurrencies like Bitcoin and Ethereum, or tokens like the Winkies.
Crypto wallets mainly exist in 2 forms:
Software wallets: mobile app or software installed on your computer, such as MetaMask, TrustWallet, etc.
Hardware wallets: look like a USB stick (electronic devices such as Ledger). Hardware wallets also come with software to manage the device.
Anyone can create crypto wallets for free, except for hardware wallets which are for sale and ensure advanced security.
Crypto Wallet vs Bank Account
Unlike a normal wallet, which can hold actual cash, crypto wallets technically don’t store your crypto. Your holdings live on the blockchain, but can only be accessed using a private key.
A few things to know about crypto money compared to a traditional bank account are below.
| LEGACY CURRENCIES | CRYPTO CURRENCIES |
|---|---|
FIAT money (government-issued currency, such as Euros or US Dollars) | DEFI money (decentralized currency on internet, such as Bitcoin or Ethereum) |
Transactions registered by your bank | Transaction registered on the blockchain on internet |
Nobody can see the transactions of bank accounts | Anyone can see the transactions from a wallet to another wallet, but nobody knows who the wallet belongs to |
If someone steals your access or assets, the bank usually provides an insurance | If someone steals your access or assets, nobody can help you recover your loss |
If your bank is on bankruptcy, you may lose all or part of your assets | Blockchains cannot end up bankrupt |
FIAT currencies is quite stable (depends on countries though…) but bank interest are usually low | DEFI currencies may be quite volatile, but interests and benefits can be very high |
About security
Hardware wallet is a more secure solution, since transactions are not possible without the physical hardware device.
It is very important to keep the access to your wallet in a safe place. You should avoid having your secret password phrase in an email, or a plain non-encrypted text, or even a picture on your mobile. The best remains a handwritten paper stored in a safe, at several places (in case of fire, flooding…).
Unlike a bank account, nobody will ever protect your assets. If someone steals the access to your wallet, all your assets can disappear without anyone to help recover them.
Best place to start
If you are new to cryptocurrencies, we advise you to create your first wallet on MetaMask: https://metamask.io/
Even if you don’t keep your secret passphrase in a secure place, or you forget your passphrase and access, you can still later create the wallet that you will secure and use to invest into cryptocurrencies and tokens.
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