Part 05: Understanding Cryptocurrency Wallets
What is a Cryptocurrency Wallet?
Despite the name, a cryptocurrency wallet doesn't actually store your cryptocurrency. Instead:
Your cryptocurrency exists on the blockchain Your wallet stores your private keys These keys prove you own the cryptocurrency The wallet provides an interface to interact with the blockchain
- Think of it like this: Your bank account doesn't hold physical cash.
- It's just a record showing you own a certain amount.
- Your debit card and PIN let you access that money.
- Similarly, the blockchain records your balance, and your wallet (with your private keys) lets you access and spend it.
The Golden Rule of Cryptocurrency
"Not your keys, not your coins."
- This phrase is repeated constantly in the cryptocurrency community because it's so important.
- If you don't control your private keys, you don't truly control your cryptocurrency.
- Someone else does.