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August 15, 2018
Blockchain Guide & Analytics

How does a Cryptocurrency wallet work

 

Without Cryptocurrency wallet, cryptocurrency will be a lame idea; this is the only way in which users, investor, trader can adopt the digital currency. There has to be a mechanism to access, store, send, receive and track the digital currency holdings whether it’s Bitcoin, Ethereum or want to make a purchase in ICO tokens

Cryptocurrency is like a virtual wallet analogous to the leather wallet many of us still use for carrying cash, credit and debit card.
But Crypto wallet has an edge over the physical wallet. In Crypto wallets, you don’t have to count the money. The crypto wallet will hold the database of all your transaction you did and you don’t have to tax your brain to recall the last amount you spent.
So the physical wallet is good for storage of asset but you have to do a lot of thinking and record keeping.
Cryptocurrency wallet is an app that does all thing that a physical wallet does coupled with more sophisticated and desirable features
There is no dearth of space in your Cryptowallet, you can keep thousands and lakhs of digital currency without worrying about running out of space. All are neatly catalogues so you don’t mix them. Moreover, all the transactions you did are reflected by the wallet to keep you updated. There is even an option to scribble a note next to any transaction which you can look at the later date.
Cryptocurrency wallets are like your safety deposit boxes that you use to store your most valued possession, be it jewellery, cash, bonds etc. The digital wallets work in a similar way and guarded not by physical keys but digital keys. These digital keys are commonly known as master keys or private keys which take the form of hexadecimal codes.

At first glance, it comes across as daunting until you find out it is flexible enough to be written down, printed on paper, typed on a document, converted to image form or even memorized.

Therefore, when you are holding digital assets such as ICO tokens and cryptocurrencies in a wallet, there is no excuse for not taking appropriate steps to secure your private key backups. You will need your private key to access your assets and authorize transfers from your wallet. So never lose them, share them with anyone and always keep them somewhere safe where you can retrieve when necessary.

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