A cryptocurrency wallet is a software program that enables you to manage your coins. It allows you to send and receive coins through the blockchain, as well as monitoring your balance.
The wallet doesn’t store your coins. The coins are stored on the Blockchain and wallet gives you access to your coins.
The main advantage of the wallet is that it stores your private and public keys (they come in pair).
Keeping your private keys secret is the only way to own a cryptocurrency indeed. Look at them as a backup of your data that you store on a USB stick. If you lose your data, the only way to retrieve them is to have a backup. That’s the purpose of the private key which allows you to gain back the access to your coins if you forget the password of your wallet or accidentally delete it.
If you do not own private keys or if you share them with others, you actually do not own the coins.
What is the difference between public and private keys?
We would like to compare this to the e-mail address. The public key is similar to your e-mail address. It could be shared with everyone. If you want someone to send you a message, he has to know your e-mail address (public key).
In the crypto world, the public key is your wallet address. To receive coins, you need to share your public key (wallet address), so others can send coins to your wallet. Everyone can know your public key. It is not going to endanger your coins.
Back to an e-mail address, the private key can be compared to the password of your e-mail address. It allows you to log in and read the messages that are sent to your public key (your e-mail address). Not only that, it enables you to manage and send messages from your e-mail address (public key).
In the case of crypto, it allows you to access and manage the coins that are stored on your public key (wallet address). Since the blockchain is open-sourced, everyone can see how much coins are stored on certain wallet address.
However, the only way to access these coins is through private keys.
Once you learn how to open a wallet account, we will help you extract your private keys so the coins you are going to store on your wallet are going to be safe.
Even if the wallet gets hacked, coins will be safe because they are stored on the blockchain and the wallet is only the medium that gives you access to the blockchain and your coins.
If you own private keys, you can access your coins through any wallet or directly through blockchain.
In the next lessons, we will explain to you how to open your first cryptocurrency wallet so you can officially become part of the crypto community.