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What is a crypto wallet?

Learn how to store your cryptocurrency

Oct 8, 2021
Edward Wilson

Quick summary

A cryptocurrency wallet, like Argent, lets you store cryptocurrencies and interact with decentralized apps (Dapps).

What is a cryptocurrency wallet?

A cryptocurrency wallet stores your private keys, which are a string of letters and numbers that essentially act as your password for your crypto. This lets you securely store, receive and spend your crypto. 

Wallets come in many forms. They range from hardware wallets that are physical devices, to mobile app wallets, to smart contract wallets like Argent

What type of wallets are available?

There are two main types of wallets, and they are:

  • Hot wallets: These are connected to the internet. 
  • Cold wallets: These are offline wallets ideal for storing crypto long-term. 

We now need to discuss the differences between custodial and non-custodial wallets. 

  • Custodial: With custodial wallets, a third party, like an exchange, controls the crypto. Custodial wallets are like using a bank account, where you deposit your money, and the bank looks after it. But it means you have to trust the third party. They can close your account at any time, preventing you from accessing your funds, and can restrict what you can do. 
  • Non-custodial: Only you have control of your wallet unless you share your private key. Do not do this. Using a non-custodial wallet means you can do whatever you like with your crypto. But if you lose your private key, there is no way to regain access. 

How do non-custodial wallets differ?

A smart contract wallet is a non-custodial option. But before we explain what a smart contract wallet is, let's explore other non-custodial options: 

  • Paper wallets: Your private keys are written down on paper and then stored in a location you think is safe. If anything happens to that paper, then you lose your private keys. Or if someone finds it, then your crypto is now theirs. 
  • Browser extension wallets: These let you interact with Dapps directly in your browser. These are convenient to use as most Dapps are on browsers. But they can get hacked, making them vulnerable
  • Mobile wallets: They make storing crypto on your phone easy. And with WalletConnect, you can interact with Dapps that you approve. But as mobile wallets need a password, if someone else gets it, then you’re at risk.  
  • Desktop wallets: These wallets allow users to store crypto on their desktops. And some provide Dapp integration. But like browser extension wallets, if your computer gets infected with malware, your crypto won't be secure. 
  • Hardware wallets: This is a secure option to store your crypto. But if you lose the device and haven't got a backup, you've lost your crypto. 
  • Smart contract wallets: These are a breakthrough in the security and usability of crypto wallets. By using smart contracts, they offer programable features like social recovery and blocking transfers to untrusted contacts.

Argent 

Argent is an Ethereum only smart contract wallet and is the easiest way to access DeFi. With Ethereum co-founder Vitalik Buterin calling for the mass adoption of smart contract wallets like Argent, why not give it a go? 

Creating a wallet is easy. Just watch this video:

Further resources

Breaking Down Ethereum Wallets Options | by Eric Conner 

Ethereum accounts | ethereum.org 

Why we need wide adoption of social recovery wallets 

A Look Back at the World’s First Cold Storage, Ethereum Multi-Sig Wallet… 

How Bitcoin Wallets Work (Public & Private Key Explained) 

Ready to get started with DeFi?

Argent is a simple, secure, all in one wallet for investing in DeFi

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