How does a crypto currency wallet work?

A bitcoin wallet is a tool that is used to interact with a blockchain network and there are various types of crypto wallets and they are divided into three major group namely software, hardware and paper wallets. They are normally referred to as hot or cold wallets based on their working mechanisms.

Most of the crypto wallet providers are software-based which is more convenient to use than a hardware wallet but whereas on the other hand, hardware wallets are a much safer ones. Another type of wallet is a paper wallet as its name tells, they have a “wallet” printed on a piece of paper.

bitcoin

In real, blockchain wallets provide the tools needed to communicate with a blockchain rather than storing crypto currencies. That is, they can generate the information that is needed to send and receive bit coins through blockchain transactions. Other than this, they have two keys private and public.

There is another type of address which is an alphanumeric identifier and is created by both public and private keys and this address is noting both locations to which bit coins are to be transacted. Therefore, you should only share your public key and not the private key to any one.

No matter whatever wallet you use, your private is used to give access to your bit coins, so that you can send and receive digital money using any device. You have to keep in mind that your money is not leaving the blockchain but simply transferring from one address to another.