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Wallet

    A crypto wallet is a tool that allows users to interact with blockchain networks. They are necessary when sending and receiving bitcoin and other digital currencies. Crypto wallets can also be used to generate new blockchain addresses.

    Unlike the traditional wallets we use in our everyday life, cryptocurrency wallets don’t really store your funds. In fact, your coins (or tokens) are simply part of a blockchain system as pieces of data, and the wallets serve as a means to access them.

    Technically speaking, most crypto wallets are able to generate one or more pairs of public and private keys. The public key is used to generate wallet addresses, which are needed to receive payments. The private keys, on the other hand, are used during the creation of digital signatures and verification of transactions (private keys are confidential and should never be shared with anyone).

    There are three major groups of cryptocurrency wallets: software, hardware, and paper wallets. But, they may also be defined as hot wallets or cold wallets according to the way they function. Hot wallets are the ones that are  connected to the Internet and, thus, are more susceptible to hacking attacks. Cold wallets are the ones that generate keys without any Internet connection, which make them highly resistant to cyber attacks.

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