Cryptocurrencies are digital currencies. As cryptocurrencies doesn’t exist in any physical shape or form, they can’t technically be stored anywhere. Instead, it’s the private keys — which are used to access your public crypto address and transaction signatures — that need to be securely stored. A combination of the recipient’s public key and your private key is what makes a crypto transaction possible.
Every cryptocurrency wallet is made up of two parts:
(1) Public key
(2) Private key
Public Key
A securely generated version of the public key makes your wallet address. This is the public address where your cryptocurrency is stored. If someone wanted to send you some crypto, you would share this public address with them – sort of like your bank account number. They typically look like this:
Bitcoin public address: 19Dg48ZxQbxinBpq19gJepGYLVBdUND4B7
Ethereum public address: 0x5D5701A8e0EF8Fa9B53Aea493965fe628c5160fe
I know we say key, but think of the public address as a lock. Anyone who's at your front door can see your lock, and that's usually not a problem.
Private Key
This is a private string of numbers and letters that is like a 'password' to your public key. If your public key was your bank account number, the private key would be the password to your bank account. You don't share this with anyone, ever.
Think of the private key as the actual key to your lock. Anyone who has this key can access your lock, open your vault, and steal your crypto.
Hence when we talk about crypto wallets, we really mean an interface that gives you access to these keys. Now that we've established their importance and what they do, we can discuss wallets and why some wallets might be better for you than others.