Cryptocurrency Wallets

In this chapter, we will discuss cryptocurrency wallets in details. In earlier chapters, we have been introduced to wallets as well as the types of crypto wallets; in this chapter, we will further discuss wallets in detail, their source, and how the security of wallets can be strengthened.

Wallets are used to store private and public keys along with Bitcoin addresses. Coins can be sent or received using wallets. Wallets can store data either in databases or in structured files. For example, the Bitcoin core client wallets use the Berkeley DB file.

The topics we will cover in this chapter are as follows:

Importance of cryptocurrency wallets
Software wallets
Hardware wallets
Paper wallets
Brain wallets
Key derivation methods in a cryptocurrency wallet
Mnemonic codes

Introduction to cryptocurrency wallets

A wallet of any cryptocurrency can store multiple public and private keys. The cryptocurrency is itself not contained in the wallet; instead, the cryptocurrency is de-centrally stored and maintained in the public ledger. Every cryptocurrency has a private key with which it is possible to write in the public ledger, which makes spending in the cryptocurrency possible.

It is important to know about the wallets, since keeping the private key secure is crucial in order to keep the currency safe. Wallet is a collection of public and private keys, and each of them is important for the security and anonymity of the currency holder.

Transactions in cryptocurrency wallets

Transactions between...

Summary

In this chapter we discussed in detail cryptocurrency wallets and various types of crypto wallets, we read about various characteristics based on which the crypto wallets can be distinguished, and we talked about the tenancy of the wallets, benefits of each of the wallet types, and the issues one can face while using the specific wallet type. We discussed key derivation methods and its importance with regard to security, accessibility, and other aspects of a wallet.