Understanding a crypto wallet necessitates getting your head around the way that crypto works.

When I started looking at Bitcoin I learned that getting access to the coins is done through simply knowing the right unique string of numbers. This the only way to access your Bitcoin and is what gives rise to the expression “Not Your Keys, Not Your Coins”.

A wallet is software that stores the numbers for you and provides an interface for transferring (or trading) your coins. The software is password protected. When it is installed, it creates a set of recovery words that can be used to re-create the numbers in the event of forgetting or losing the password.

The recovery words can be used by anyone to use the coins so they are usually written down and hidden away safely.

In writing this I realise that although I use software wallets to keep and transfer coins I don’t have a clear enough picture of how they work. I will read more about it.

As software wallets are susceptible to being hacked or being emptied through information collected through a phishing attack there are also hardware wallets.

Hardware wallets are used to store the crypto numbers and accessed through software. This means that the coins are protected through both the software and needing physical access to the wallet. This extra level of security brings an extra level of complication, as with most things on the internet.