A cryptocurrency wallet is a software program which stores your private key (think of it as a password) in order to talk to the blockchain. The wallet enables you to do things like monitor your balance and send or receive coins.
When you send a crypto payment, you are sending crypto coins. “Sending coins” is a bit misleading though. Coins never actually “GO” anywhere. The blockchain is a ledger. When you “send” someone coins, you are actually signing over ownership of the coins to them through the use of your public and private keys, and your digital signature.
When a transaction is made, your wallet verifies that the public and private keys match.
When the transaction is complete, the sender and receiver’s balances change on the ledger, and ownership of the coin(s) is digitally signed over to the receiver.
Wallets play a crucial part in accepting and spending cryptocurrencies. Because a wallet is how you access your coins, keeping your wallet safe is important. I mention security often with the hope that you’ll be mindful of it. Cryptocurrency gives the individual more power over personal finances than we’ve ever had before. Your crypto passwords, email addresses and private keys must be kept safe.
*Quick tip: Start a new email address for your crypto accounts, with a secure password.
How do I choose the right wallet for my business?
New wallets appear every single day. Wallet innovation is big business in the crypto space. Different types of wallets are used for different functions and are largely chosen by personal preference.
Be prepared, you will likely want more than one. If it helps, think of each wallet as a different account. Businesses have bank accounts for different applications: Operating account, Payroll account, Trust account, etc. The difference with crypto wallets is, instead of bank accounts, you have separate banks, and YOU are in control of them.