Digital Asset Wallets
What is a Digital Asset Wallet?
In order to own and use bitcoin or other digital assets, you need a digital asset wallet. A digital asset wallet stores private and public keys to enable users to interact with various blockchains. Digital wallets allow users to monitor balances and send and receive funds.
Unlike a traditional wallet or bank account, digital wallets do not store funds. In fact, digital assets are not stored in any single location or exist anywhere in any physical form. All that exists are records of transactions and/or balances stored on a blockchain .
There are several types of wallets with varying degrees of security and convenience. Desktop and mobile wallets store private keys locally on the computer or device running the software. These wallets are only as secure as the device running the application. Hardware wallets, such as the Ledger Nano S, store keys on a separate encrypted device and offer the ideal security and convenience. Online wallets, such as wallets managed by most exchanges (Coinbase, Binance, Poloniex,...), introduce third-party risk and are often victim to security breaches.
Ultimately, you are responsible for your security. If you lose your private keys, the assets associated with them are lost as well. Similarly, if you send assets to a scammer/phishing website, there is no way to reverse the transaction or recover lost assets. Learn more about private keys and securing your digital assets here .