What is a cryptocurrency wallet? Well, a cryptocurrency wallet is a software application that enables users to transfer cryptocurrencies and monitor their balances. Anyone that wants to send or receive Bitcoin, Ether, or any other cryptocurrency needs to use a wallet in order to interact with blockchain and get their transactions processed. So, it is a tool that every person involved with cryptocurrencies use from time to time, to make payments, to transfer funds, or to monitor their balances.
Although the term ‘cryptocurrency wallet’ is used to refer to such software that lets us do these things, in contrast with a traditional wallet we use to store our money, a cryptocurrency wallet does not store cryptocurrencies inside. In fact, as I have already said, a wallet is just a software application used to interact with the blockchain; and it allows us to access our cryptocurrencies by looking at the records on the blockchain and initiate new transactions. So, where are our cryptocurrencies stored then? Are they stored on the blockchain? In fact, the answer is both yes and no.
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