There’s a misunderstanding about the way the crypto wallet works, even though there are millions of people using it. When we speak about wallets, the first thing that comes to our mind is the traditional wallet or pocket wallet where we store tangible currency. A crypto wallet is not a traditional wallet as it does not store tangible currency.
Actually, the cryptocurrencies are not stored anywhere or exist anywhere in a physical form. What exists are the records of the transaction on the blockchain.
As we know a crypto wallet stores the public and the private keys and interacts with other blockchains helps to check on balance and helps to conduct other operations.
Technically, when a user sends you any type of cryptocurrency, they are actually signing off the ownership of the coins to your wallet address.
To enjoy these coins and unlock the funds, the private key stored in your crypto wallet should match public address to which the currency is allocated to. The balance in your digital wallet will increase and decrease in the sender’s wallet, only after the private key and the public key match.
There is actually no exchange of real coins. The transaction of sending and receiving the coins is monitored by a transaction record on the blockchain and a change in balance in your cryptocurrency wallet.
There can be many types of cryptocurrency wallets/Bitcoin Wallets which are used to store and access your digital currency. Wallets are broken down into three main categories namely, software, hardware, and paper. The software has more sub-categories namely, desktop, mobile and online.