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An Introduction to Cryptocurrency Wallets and How They Work.
Why do I need a crypto wallet?
The protocols of Drip Community and Animal Farm are based on the Binance Smart Chain.
This is a high-performance blockchain with a focus on smart contract programmability that is much cheaper and faster than other blockchains.
To trade cryptocurrencies on a blockchain, we need a crypto wallet.
What Is a Crypto Wallet?
It is your bank account in the crypto-verse and can bring many useful features and capabilities buying and selling various cryptocurrencies.
In other words, a crypto wallet is a tool that allows you to interact with a blockchain network.
Most crypto wallet providers are software-based, which makes their use more convenient than hardware wallets.
However, hardware wallets tend to be the most secure alternative.
How do cryptocurrency wallets work?
Contrary to popular belief, crypto wallets do not store cryptocurrencies.
Crypto wallets generate the information necessary to send and receive digital assets via blockchain transactions. These transactions are carried out through the use of public and private keys.
Public keys are used to generate wallet addresses, that you can share with others when you want to receive cryptocurrencies. Such an address is essentially a specific "location" on the blockchain where coins can be sent to.
The private key or seed phrase is like your password and is used to create digital signatures and verify transactions.
Simply put, a seed phrase is the “master key” for all of your crypto accounts – it is your private keys in mnemonic form.
The private key/seed phrase must be kept secret.
What are Blockchain transaction fees?
Transaction fees are an essential part of most blockchain systems, thanks to which it is possible to permanently record a transaction on the blockchain.
You have to pay these fees when you send, deposit or withdraw cryptocurrencies.
For example, the BSC fee structure is very similar to Ethereum's, but instead of being paid in $ETHER, they are paid in $BNB.
The transaction fees are denominated in Gwei, which is a small denomination of BNB to 0.000000001.
Users can set their transaction fees, also called Gas Fee, prices to prioritize their transactions.
What is a hardware wallet?
A hardware wallet is a special type of wallet which stores the user's private keys in a secure hardware device combined in conjunction with compatible software, is the best way to secure your cryptocurrency.
A good crypto hardware wallet is essential for helping feel more connected to funds, hardware wallets keep safe and give peace of mind when using digital currencies.
Your hardware wallet keeps your private key protected at all times in a certified secure chip.
Any transaction must be verified on the device’s trusted display and physically confirmed by you.
Which crypto wallet should use?
Choosing a crypto wallet depends on your needs. Security, safekeeping , and interaction with DeFi smart contracts are important to consider.
There are very different types of crypto wallets.
When it comes to browser extension wallets, MetaMask is the most popular cryptocurrency wallet. It comes as a plugin that you can install in Chrome, Brave, Firefox and other internet browsers.
MetaMask also offers compatibility with the Ledger cold storage hardware wallet for those who want the highest security.
If you prefer a mobile experience, SafePal, a Binance product, is available for iOS and Android.
SafePal also offers a wireless hardware wallet for those who want to manage tokens directly from mobile devices.