Wallets

What is a wallet?

The word “wallet” is a pretty confusing one in the bitcoin/crypto/blockchain world because it is used to refer to several different things.

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       1) The leather thing in your pocket

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       2) A “cell” in a blockchain “spreadsheet”

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       3) A software interface to interact with a blockchain

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       4) A software interface to store your private keys

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       5) A piece of hardware to store your private keys

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       6) An account at a centralized exchange

1) The leather thing in your pocket

You use the leather thing in your pocket to store your money right?

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Either cash or credit cards or things that could be more loosely classified as money such as gift cards

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The reason we use this word “wallet” in the bitcoin/crypto/blockchain world is because we’ve created a digital version of the leather thing in your pocket – a digital place to store your money.

2) A “cell” in a blockchain “spreadsheet”

A “cell” in a blockchain “spreadsheet” is a pair of keys – a public key and a private key – loosely analogous to an email address and the password to login to your email.

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When we use the word wallet in this way a “wallet” can only contain products of the particular blockchain “spreadsheet” in which you own a “cell”

3) A software interface to interact with a blockchain

An example of this meaning for “wallet” is MyEtherWallet.com or EtherDelta.com

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Does not store you private keys

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Talks directly to the blockchain you’re interacting with

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Only applies to whichever particular blockchain it’s built for

4) A software interface to store your private keys

These can be browser based, including:

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     I) Coinbase.com

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     II) Einstein.com

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     III) Coinmewallet.com

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     IV) Blockchain.info

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Or they can be programs you download, including:

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     I) Exodus

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     II) Litecoin Core

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     III) Digibyte Core

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Some of these will show you your private keys if you ask it to, some won’t no matter what.

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     I) If it will show you your private keys, you can access your money from other places, if it doesn’t, you can’t.

5) A piece of hardware to store your private keys

Includes:

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     I) Trezor

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     II) Nano Ledger

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These do not ever expose your private keys to either you or the internet

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If you lose the piece of hardware you can only recover your money with the 24 word passphrase created when you first set up your device.

6) An account at a centralized exchange

These are sometimes called “wallets” but “wallet” is a very inaccurate word to use to describe your account at an exchange.

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Cryptos stored at a centralized exchange are not yours according to any blockchain, they’re only yours according to the centralized exchanges accounting “spreadsheet”.

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You can still use these accounts to send money from your share of the exchanges “2) Wallet” to wherever you want to.