What does Wallet mean?
Software that helps you access your accounts, facilitates transactions, and provides you with personalized information about your accounts.
The Main Idea:
Digital wallets are software applications that allow you to visualize, access, and manage your tokens and blockchain activities. They are similar to the electronic dashboard for a bank account, in the sense that they allow you to do similar activities to what you could do if you logged into your bank’s website.
For example, you may use the bank’s dashboard to view your account balances, transactions, and move your currency from your account to someone else. Notice when you use your bank’s dashboard to pay someone, you never touch your currency yourself: you send directions to the bank to debit the currency it has in its electronic (centralized) ledgers for your account and credit that amount to someone else.
Your digital wallet allows you to view the account balances of your tokens on their corresponding (decentralized) blockchain ledgers. You may send directions to the blockchain to move these digital currencies from your account to someone else’s account, as recorded on the blockchain ledger. These tokens and cryptocurrencies are not in your wallet because they are represented by bytes in the blockchain’s digital ledger.
What is a Cryptocurrency Address and How Do I Access It?
A cryptocurrency address is a publicly viewable, cryptocurrency-specific account number. This public address is an encrypted version of your public key. Because there is a special relationship between your public key and your private key (see Geeq’s Introduction to Encryption for an explanation of Public-Private Key Pairs), proving you own the address is done with your private key.
An analogue in the physical world is that the public address is like the number of a safety deposit box in a bank. You may keep a checkbook with a list of your transactions, your current account balance, and some checks in your safety deposit box. You may access your safety deposit box only if you have the private key. Once you demonstrate you know both the number of your safety deposit box and that you have the private key, you gain the ability to make transactions from your account on the blockchain.
Used in a Sentence:
Your non-custodial wallet is software that stores your private keys, public keys, and public addresses, lets you send and receive coins, and allows you to see personalized information about your accounts and transactions.
Last Updated: March 21, 2021