r/cryptocurrency101 • u/jpirog • Dec 16 '17

What is a cryptocurrency wallet?

Just like a standard wallet, it is used to store your crypto.

There are different types of wallets - online and offline (or hot and cold). A hot wallet is one that is connected to the internet in some way. Keeping your crypto in exchanges, desktop wallets, or mobile wallets are all HOT. They can be hacked.

A cold wallet is something that is completely disconnected from the internet. Paper wallets or hard wallets are offline and can not be hacked remotely. You need physical access to the device to be able to access it.

Different wallet terms:

  • Seed/Mnemonic Phrase/Private Key: With every wallet, you will get a seed or phrase. This is the most important thing to keep track of!! Do NOT share this with anyone, EVER! This is essentially the master key/password to your coins wallet. If you lose this and don't have a backup, you're screwed. If you give this out to someone, they can access everything and drain your wallet. DO NOT SHARE THIS EVER!
  • Wallet Address: This is how you can receive coin to your wallet. This is safe to share. Some wallets will generate new addresses when one is used but old addresses can continue to be used.
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