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A wallet isn't exactly what you think it is

By Alex Nimoy June 28, 2021, 4:17 p.m.

A wallet isn't exactly what you think it is. If you're new to the cryptocurrency world, this article will offer you a crash course in how wallets work.

If you've ever been in the crypto community, you've undoubtedly heard of Metamask, Electrum, MEW, Trust, Coinomi, Atomic, or whatever other application you name a wallet, but they aren't truly wallets.
Let's see why a wallet isn't exactly what you think it is.

So, what precisely are these so-called wallets?

They are wallet apps that enable users to access and manage their cryptocurrencies, NFTs, or other blockchain assets kept in their wallet. The true wallet is your private key or seed phrase, and not the apps that you use to access your seed phrase which contains your valuable crypto assets.

Here is a quick and easy example.

When you download, say, the Metamask software you can download it from here, and open this so-called wallet, you have the option of creating a seed phrase/private key, and you have sent a few ETH to this wallet. You may import the same seed phrase into other apps such as Trust wallet, MEW, and Atomic, and your ETH will be available on both Metamask and those applications. So, the next time you download a new wallet app, you don't have to create a new seed phrase; instead, you can just import the one you currently have to manage your existing cash in both apps.

What is a seed phrase?

This emphasizes the importance of never sharing your private keys with anyone. Keep your keys safe because they are your only way to access your blockchain assets. The seed phrase is sometimes referred to as a recovery key, seed key, or recovery seed, which is a set of random phrases that is anywhere from 12 to 24 in number that is used to recover your cash if you forget your wallet's password or the device on which your wallet is installed. It's also useful when your wallet isn't working.

When you set up your crypto wallet, a seed phrase is generally produced. As a result, it is critical that you do not skip this step. Backup systems are usually useful while trying to save a bad scenario. Taking a pen and paper and physically writing down your seed phrase is the next best step once you have access to it. Memorization of the phrase is not an option.

What actually is the importance of the seed phrase?

We recommend using a paper wallet to store your seed phrase, as it has no digital presence. While paper is relatively brittle, it is perhaps one of the finest materials for storing your seed phrase and private key.

Write down your seed phrase and private key on at least 3 pieces of paper and keep it somewhere safe and secure where only you have access. You may even laminate the paper to protect it from water damage as well as tear and wear. If you want more information about storing seed phrases check this article.

It should be obvious by now that your private key is critical to the security of your digital currencies. If you do manage to lose the private key (and mistakes do happen) as a result of seed phrase security, you have the option of easily recovering your cash. As a result, the information must always be kept secure and hidden from everyone but you.

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