Understanding Cryptocurrency Wallets
A cryptocurrency wallet is not a container for storing tokens; it is a tool that helps users access records on the blockchain, manage keys, and send and receive digital currencies. When choosing a wallet, users need to balance convenience, online connectivity risks, and the way private keys are controlled.
How Wallets Work
Digital currencies themselves exist on the blockchain in the form of data records, while wallets help users access and operate on those records. Most wallets generate a public key and a private key: the public key can be used to generate a receiving address, while the private key is used to create digital signatures and verify transactions. The private key is tied to control of the assets and must be kept strictly confidential; it must not be shared with others.
Common Forms of Software Wallets
Software wallets mainly include web, desktop, and mobile wallets. Web wallets can be used directly through a browser, but the private keys may be held by a third party; desktop wallets store private keys locally and should be run on computers free of viruses or malware; mobile wallets are designed for smartphones and can typically use QR codes to facilitate convenient payments and receipts.
Hardware Wallets and Paper Wallets
A hardware wallet is a physical device that can generate and store keys offline. It is usually a cold wallet and offers relatively high security, but its convenience and accessibility are limited. A paper wallet prints a blockchain address and its corresponding private key on paper, sometimes with an accompanying QR code. Although it can be generated offline, operational flaws and storage risks make it unsuitable for users with limited technical experience.
Hot Wallets and Cold Wallets
Based on the environment in which keys are generated and used, wallets can also be divided into hot wallets and cold wallets. Hot wallets connect to the internet in some way, making them convenient to use but more vulnerable to cyberattacks; cold wallets generate keys in a completely offline environment, reducing the risk of remote attacks. Classification does not mean absolute security; users must still properly safeguard their devices and private keys.
Original Tutorial
https://www.binance.com/zh-CN/academy/glossary/wallet