Crypto wallet

Mushee is a Layer launchpad protocol

When we get in touch with the world of cryptocurrencies, Crypto Wallet is a topic that you’ll definitely run into. Crypto beginners, they might get confused by new terms such as public key, private key, address, and mnemonic phrase. So what is a Crypto Wallet? What does it do?

Definition​

Crypto Wallets are also referred to as digital currency wallets or blockchain wallets. Simplified, a Crypto Wallet is an account to hold cryptocurrencies. It works like an online bank account for your cryptocurrencies but with a few differences: In this decentralized environment, Crypto Wallets are not backed by government deposit schemes.

They store cryptocurrencies instead of fiat currencies, and you are in control of your funds at all times. Beginners should have a general understanding of the function of the Crypto Wallet by reading the content above, but it is not strictly accurate. Technically, Crypto Wallets store the private key, rather than actual cryptocurrencies.

Private Key​

Since we mentioned “Crypto Wallets store the private key”, what is the private key? When we have a bank card, its password will give us access to the assets stored within it. In Crypto Wallets, the private key works like our bank account and password.

It is the most significant data stored in a wallet. It allows you to transfer or trade assets, giving you control over the assets contained in a Crypto account. Moreover, the private key works as your identification in the blockchain network.

Unlike bank account and password, which can be retrieved by your real-name identity, the blockchain networks are decentralized and anonymous, the private key is irretrievable. If you accidentally lose your private key, you will lose control over the assets in your account.

Public Key and Address​

The public key is generated by the private key through an asymmetric encryption algorithm. Simplified, the public key works as a bank account number, which can be disclosed to someone else without incurring security risk, because they will not be able to get your private key based on your public key. You can acquire a public key using the private key, but not vice versa.

We have introduced the function of the public key, which is working as the bank account of our Crypto Wallet. In fact, the public key is mainly responsible for operations such as verification. When we use a Crypto Wallet, what we provide for the receipt of the Crypto transfer is our address.

It can only be used for receiving payments and checking balances and transaction records. The address was generated by a public key when it was converted into a new string of characters through a fixed algorithm. Same to the public key, disclosing your address will not incur any security risks.

Mnemonic Phrases​

As we mentioned, the private key is the most important thing about your account. You can’t lose it. However, it’s difficult to remember an actual private key. The private key is a 64-bit hexadecimal string, which contains multiple combinations of numbers and letters. You might make mistakes even if you were to copy it down.

This encouraged the emergence of another form of private key-mnemonic phrases. It generally consists of 12-24 common English words and shares the same functions as the private key. Since mnemonic phrases are equivalent to the private key, you must keep them properly, without losing them or disclosing them to anyone else.

On the other side, you can disclose your address and public key to others for verifying signatures, receiving payments, and checking balances and transaction records.