Wallets

Wallets are like your crypto bank accounts, and different wallets store different tokens.

To trade any crypto currency, you first need a wallet for to store them, ie: Bitcoin needs to be kept in a Bitcoin wallet. Wallets are exactly like they sound, they’re like a crypto bank account.

How to get a wallet

The easiest way is to sign up to an exchange that allows you to buy, trade, or sell cryptocurrencies, they allow you to generate a wallet for every token that they trade, even if you don’t own any. Coinbase for example, gives you a wallet for Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

Crypto Wallets don’t actually hold anything, unlike a physical one.

An important thing to understand is that wallets are simply a secure “window” into the blockchain so you can view your records and transactions. Think of it like Gmail, where your wallet is your Gmail login and password, but you’re not actually storing the emails yourself, you’re simply accessing it. Your tokens and transactions are saved on a blockchain, which is distributed across a vast network. So it’s always there, no matter if you lose your wallet. You just won’t be able to access or do anything with the tokens without your wallet.

How to send and receive tokens between wallets

Every Wallet has its own unique address, so if you trade on 3 different exchanges, you will have a different Wallet and address for each exchange, for each token. Think of them as a different website address or URL.

Wallet addresses are currently a very long string of characters, called a hash.

An example of what a Bitcoin Wallet Address looks like on Coinbase.

To send tokens between wallets, you will need to first copy the receiving address, and then enter the address into the Recipient field when sending. Here’s an example of what the sending screen looks like on Coinbase:

Sending Bitcoin from Coinbase.

Wallets are currency specific

Meaning, they only allow sending and receiving of their own token. This is very important to understand. In the crypto world, you cannot send different coins to different wallets (there are exceptions), otherwise you will lose your funds forever.

ERC-20 based tokens (the exception)

To dive a little deeper, there are certain tokens based on the ERC-20 protocol (generated from the Ethereum blockchain), that can be stored in the same ERC-20 compatible wallet. So for example, if you have two ERC-20 tokens, “Apple Coin” and “Orange Coin”, you can send them both to an ERC-20 wallet, such as MyEtherWallet.com.

***Make sure you always double check that the link you are visiting is correct, there are lots of sites out there with a confusingly similar spelling attempting to trick users into logging in, thinking it’s the real site, therefore “phishing” or stealing your login info! Try not to search Google and click into a site, always enter it directly or visit from a bookmark!***

Always make sure you are on a secure connection, and double check it’s a legit web address.

Different types of wallets

Online wallets are often regarded as the least safe, although most convenient for trading. If you have your tokens on an exchange, you can trade with them immediately. However, there are a few main types of wallets:

Desktop wallets

These are wallets usually created by the token developers. For example, to find an official supported wallet for Bitcoin, you can download one from https://bitcoin.org/en/choose-your-wallet

These are wallets usually created by the token developers. For example, to find an official supported wallet for Bitcoin, you can download one from https://bitcoin.org/en/choose-your-wallet Mobile wallets

These are app-based wallets that you can download and install on your phone, although more common for Android based phones. Examples include the Blockchain mobile wallet for Android.

These are app-based wallets that you can download and install on your phone, although more common for Android based phones. Examples include the Blockchain mobile wallet for Android. Online Wallets

All exchanges offer online wallets, to allow you to send and receive tokens. For example, Coinbase or MyEtherWallet.com. It is highly recommended to store tokens offline to reduce risks of hacks, phishing attempts, and also the collapse of exchanges. While most exchanges have security protocols in place, there have been disasters like the infamous Mt Gox hack in 2014 where $460 million worth of Bitcoin was stolen.

All exchanges offer online wallets, to allow you to send and receive tokens. For example, Coinbase or MyEtherWallet.com. It is highly recommended to store tokens offline to reduce risks of hacks, phishing attempts, and also the collapse of exchanges. While most exchanges have security protocols in place, there have been disasters like the infamous Mt Gox hack in 2014 where $460 million worth of Bitcoin was stolen. Paper Wallets

Paper wallets are basically a print out of your wallet’s public and private keys, along with a QR code you can scan. A private key is basically a sequence of letters and numbers (much like a long password), that you, and ONLY you should know, in order to unlock your wallet and access your tokens. Coindesk has a guide on how to create a paper wallet.

Paper wallets are basically a print out of your wallet’s public and private keys, along with a QR code you can scan. A private key is basically a sequence of letters and numbers (much like a long password), that you, and ONLY you should know, in order to unlock your wallet and access your tokens. Coindesk has a guide on how to create a paper wallet. Hardware wallets

These are the most secure way to store your tokens. Hardware wallets are completely offline (often referred to as cold storage). Hardware wallets do not support every token out there, so you will need to find out if the tokens you want to store are supported by the hardware wallet. Popular options are the Ledger Nano S and the Trezor Hardware Wallet.

The Ledger Nano S hardware wallet. From https://www.ledgerwallet.com

To learn more about wallets, Coindesk has a great article on wallet options.