A Cryptocurrency wallet is a software program which enables a user to send, receive and monitor cryptocurrencies. Using a Crypto Wallet, one can transfer cryptocurrencies, purchase coins and tokens, pay bills, online shopping and luxury goods.
A Crypto Wallet does not store actual currency, but records all transactions on a Blockchain ledger. The function is supported by generating a private key and public key. A public key is a string of alphanumeric characters that acts as an address that users use to send cryptocurrencies. On the other hand, a Private key sends money to others. It is extremely important to never lose these credentials. Once lost, they cannot be recovered.
In Crypto Wallets, there is no exchange of real coins. When a person sends you cryptocurrencies, they use their public key to transfer the ownership to your wallet address. Once the public address matches the private key in your wallet, the balance in your account increases, while the sender’s decreases. The transfer of funds is simply recorded on the Blockchain ledger, showing the difference of the balance in wallets of both parties involved.
These wallets can store a single currency or multiple ones. Some wallets even support conversion of one cryptocurrency to another.