A Wallet is a file that houses private and public keys. It usually contains a software client which allows to send and receive digital currency and monitor the balance on a specific blockchain that the wallet is designed for.

How many types of wallets do exist? They can be divided into five types and each comes with varying levels of security to ensure the safety of your private keys; online (web), mobile, desktop, hardware, and paper wallets.

How do crypto wallets work? Wallets are used to store private keys: long hexadecimal codes known only to you. They must match with a public key so you can spend your money.

Interesting facts

  • Hot wallets are less secure cryptocurrency wallets, however they are much more user-friendly.
    Cold wallets are a crypto wallet type used for the “cold storage” of cryptocurrencies, and are stored offline for improved security
  • Some wallets only hold one type of cryptocurrency, while others will allow you to store multiple types of cryptocurrencies in one place.
  • Currently, there are almost 32 million bitcoin wallets according to data compiled by Statista.