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Everything You Need to Know About Crypto Wallets 

CRYPTO No hide needed here

 

Francis Scialabba

Facebook is ready to launch Novi, its digital wallet, exec David Marcus wrote in a memo Wednesday. He spearheads Diem (née Libra), the Facebook crypto project that kicked off with very grand ambitions.   Considering those initial ambitions, wallets may seem like a meek starting point for Diem. But wallets underpin everything. They’re indispensable for participation in any part of the cryptocurrency ecosystem, from storing your digital gold in a metaphorical vault to actively minting JPEG images as non-fungible tokens (NFTs).  What is a crypto wallet?  Wallets don’t “hold” your crypto so much as store the digital credentials required to access your coins. Your wallet is encrypted proof of ownership, consisting of your public and private keys (long, random alphanumeric strings of characters). Pro tip: Do not ever give away your private key, even if a scammer asks you nicely in the DMs.  Robust security is everything in cryptoland. Were thieves to gain access to your wallet and siphon away your funds, there’s no centralized intermediary who could roll back the on-chain transaction. How to protecc, avoid attacc? From whales to decentralization idealists, many opt for “cold storage” of their keys on hardware wallets. The physical devices allow for safekeeping that’s neither 1) paper nor 2) a hackable, online storage system.  While hot (internet-connected) wallets are less secure, they still have advantages, like letting traders move funds more freely. There’s a slew of desktop, browser, and mobile offerings in this category, like MetaMask, Coinbase Wallet, and Exodus.   In a trustless world… ...security and counterparty risks are the sine qua non of digital asset management.  And while self-custody will remain a key criteria for much of the crypto community, tens of millions of crypto users don’t hold their own keys, instead trusting centralized exchanges to safeguard their credentials. As digital assets move beyond crypto-native dev communities to Fortune 500s and rising fintechs, third-party custody isn’t going away.  Ultimately, it’s a choice that comes down to personal preferences, risk tolerance, and use cases.