Wallet

As mentioned, cryptocurrency is stored on the blockchain. The wallet will hold the keys (or reference) to the coin and that is then associated with your wallet. A wallet is something that you will download to your computer (or store on a digital exchange), and like any wallet, you can look at it to see how much crypto you own. It is important to note that you can not see all of the different types of cryptocurrency in one wallet. You will need to get the wallet that matches the currency you have purchased, or are going to purchase.

A comparison to traditional money is your debit card. You have a debit card that has money associated with it, but that money is stored in the bank and referenced to your account number. When you log on to your online banking, you see a balance that is associated with your account and debit card when you want to spend it. Although blockchain, crypto, wallets, and keys sound a little more daunting; it’s very similar to what you have already experienced with a debit card.

If you wanted to purchase Bitcoin, you would go to the official Bitcoin site and choose the wallet that best suit your needs. Wallets will typically have light versions and regular versions. Don’t be surprised if you download a wallet and it takes a day or two to ‘sync to the network’. What’s happening here is that you are downloading every single transaction that has ever happened with the cryptocurrency and storing the ledger (records) on your computer. This can sound like a scary thing for sure, but you’re actually becoming part of the secure network as mentioned before. Because you have all the transactions, and everyone else has all the transactions this is what makes the blockchain secure. To change the records at a particular point in time, you would have to change the records on every single computer hosting that wallet, at the same time.

A light wallet gives you the ability to store the information at the current time for your own records. It does not download all of the transactions in history to the computer. It’s faster to get going on your own computer, which is always nice!

A third option is using a digital exchange and letting this exchange host your wallet.