What is a crypto wallet?
It is important to remember that anyone who has access to your private keys or recovery phrase can access your wallet. Do not share your private keys or recovery phrase with anyone else.
Overview
A crypto wallet enables you to hold, send, and receive cryptocurrency via the blockchain. It consists of both a public and a private cryptographic key, which work in tandem to grant you access to your digital currency. Every crypto wallet has a unique wallet address, allowing for the safe transmission and receipt of cryptocurrency. The variety of wallet types means the way you interact with your private keys and recovery phrase can differ.
Software and Hardware Crypto Wallets:
Software Wallets:
Commonly referred to as hot wallets, these are accessible through web browsers or mobile apps. They come in two variants: custodial wallets, where another party manages your private keys, and self-custodial wallets, where you have full control over your keys.
Hardware Wallets:
Known as cold wallets, these devices securely store your private keys offline on physical hardware. This category exclusively consists of self-custodial wallets, offering heightened security since your keys aren't stored on an internet-connected server. However, losing your recovery phrase means potentially losing access to your owned cryptocurrency.
Common hardware wallets include: Ledger, Trezor and Safepal. Do your own research to find the best self-custodial wallet for you.
Custodial and Self-Custodial Crypto Wallets:
Custodial Wallets:
In a custodial wallet setup, your crypto funds and private keys are managed by a third-party provider, much like a traditional bank oversees your money and security. You access your wallet using a username and password, and if you forget your password, it can typically be reset. This convenience positions custodial wallets as a straightforward choice for purchasing, selling, and holding digital currencies.
Self-Custodial Wallets:
Opting for a self-custodial wallet means you're in full control of your private keys and thus, the security of your funds. This type of wallet allows you to engage directly with the wider DeFi ecosystem and web3 decentralized applications, such as BroccoliSwap. However, it's crucial to note that if you lose your private key or recovery phrase, there's no fallback to recover your funds.
Upon setting up, you'll receive a private key and a recovery phrase — These must be kept private, as anyone with this information can gain access to your wallet and your crypto. - Do not share your private key or recovery phrase with anyone else!
Common self-custodial wallets include: Metamask, TrustWallet and SafePal. Do your own research to find the best self-custodial wallet for you!