How Cryptocurrency Wallet Works

In modern times, we live in a digital world where almost everything happens online down to interactions and all day-to-day transactions. If you plan to go into the “Crypto world”, you will need a Crypto bank. As it is known that Cryptocurrencies are virtual or digital currencies that can’t be held but has the same equivalent for your cash, therefore it needs storage that will give all information amount of digital currency, Transaction details, Price changes of Cryptos.

WHAT IS THE CRYPTOCURRENCY WALLET?

In simple terms, a Cryptocurrency wallet can be likened to our purse, wallet, or even a piggy bank where we keep our cash or to a bank where to store our cash. A cryptocurrency wallet is a digital bank where we can store all our Cryptocurrencies. It is a digital bank that stores the user’s private and public keys and allows them to make digital currency transactions. Cryptocurrency wallet doesn’t only keep any type of Cryptocurrency, but also, contains all details of transactions and variations in price with time.

HOW DOES THE CRYPTOCURRENCY WALLET WORKS?

Digital currencies are not stored in your Cryptocurrency wallet, they are stored in a blockchain. What is stored in your wallet is a ledger of transactions, your Cryptocurrency wallet is connected directly to the blockchain. I am sure you must be wondering “How do I access my digital currency?” The Cryptocurrency wallet contains three key sections:

1. Wallet address: as earlier said, your Cryptocurrency wallet is similar to your bank. Your wallet address is your account number, you don’t need to give all the details of your bank to receive cash from someone, all you need to give is your account number which doesn’t give out any information about you. Similarly, your wallet address is harmless; it can be given out without any fear.
2. Private Wallet Key: This is a secure pin only you have access to. If you want to make a cash transfer from your bank, you are required to enter a private and secure key to conform to the transaction simply for verification. The private wallet key operates in the same capacity, it proves you are the owner of the digital currency in the blockchain. Without this, you cannot have access to your Cryptocurrency. 
3. Public Wallet Key: this works hand in hand with your private key and the two keys have to match for any Cryptocurrency transaction that can occur. It is different from the private key in the sense that, it is used to receive Cryptocurrency while the private key is used to send out Cryptocurrency.  The codes of the private and public keys are different but the blockchain operates with a mathematical software that matches these two keys before any transaction can be verified.

TYPES OF CRYPTOCURRENCY WALLETS

Today, there are several cryptocurrency wallet types you can use including online, offline, mobile, hardware, desktop, and paper. While some wallets offer more than one method of accessing the wallet, most wallets fit more than one category below. 

Here is a list of the different types of cryptocurrency wallets available:

Full Node Wallet: This wallet allows you to control your private keys and host a full copy of the blockchain. Basically, every cryptocurrency has an official wallet of this type which can be found on the official GitHub of the site (there is often a link on the official website). NOTE: “Official” in this sense means “put out by or endorsed by the developers who created the coin.” 

Custodial Wallet: Some wallets allow you to control your private keys, while some are custodial, which means you don’t control your keys directly. Most exchange wallets are custodial wallets.

Desktop Wallet: The most common type of wallet. Typically an app that connects directly to a cryptocurrency’s client.

Mobile Wallet: A wallet that is run from a smartphone application.

Online Wallet: An online wallet is a web-based wallet. While you do not need to download an application to use it, the data is hosted on a real or virtual server.  Some online wallets are hybrid wallets that allows encryption of private data before being sent to the online server.

Software Wallet: Any wallet that is software-based is a software wallet.

Hardware Wallet: This type of wallet utilizes dedicated hardware that is customized to hold a cryptocurrency. These mobile devices enable you to go online to make transactions and taken offline for transportation and security.

Paper Wallet: You can print out a QR code for both public and private keys. This wallet type allows you to both send and receive cryptocurrency using a paper wallet. With this option, you can completely avoid storing digital data about your currency by using a paper wallet.

Coin-specific: A wallet that only works with a specific cryptocurrency, for example, Bitcoin or Ethereum.

Network-specific: A wallet that can hold multiple tokens on a single network.

Universal / Multi-Asset / Multi-Coin: A wallet that can hold addresses from multiple coins. Do note that just because a wallet is “universal” does not mean it literally holds every crypto asset.

TRUSTED CRYPTOCURRENCY WALLET IN THE COMMUNITY

LinqCash is one of the most popular Bitcoin wallets today. The wallet can be accessed from any browser or smartphone. LinqCash also provides two different additional layers for added security. The browser version has two-factor authentication enabled, while mobile users can activate a pin code requirement every time the wallet application is opened.

Even though your wallet is stored online and all transactions will need to go through the company’s servers, LinqCash does not have access to your private keys. Best of all, the application operates exchanges of Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, as well as other digital assets with fiat currencies in 32 countries, and is trusted throughout the cryptocurrency community.

Disclaimer: The blog content above does not constitute financial advice in any way whatsoever. Nothing published by LinqCash constitutes an investment recommendation, nor should any data or Content published by LinqCash be relied upon for any investment activities.

LinqCash strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.