What is a Crypto Wallet?

by SafeX

A crypto wallet is a piece of software that has been created for the purpose of communicating with a specific blockchain. We need a crypto wallet to keep cryptocurrencies safe and to be able to send them to others, or send them to a crypto exchange for trading. However, the Safex wallet has even more functionalities than the regular wallets.

Hot vs. cold wallet for cryptocurrencies

A hot wallet is any wallet that is connected to the Internet, while a cold is not. This makes a big difference between them and makes cold wallets generally safer for storing cryptocurrencies. In contrast, hot wallets are better for sending coins quickly from one address to another.

If your hot wallet is connected to the Internet (desktop or mobile wallet), your wallet is ready to send the coins. If the device is not connected to the Internet, it behaves more like a offline storage.

Hot wallets

We distinguish:

  • Desktop wallet for cryptocurrencies - on a personal computer or laptop
  • Mobile wallet - on the phone
  • Browser wallet - in an Internet browser

Cold wallet

These wallets are mainly made for safekeeping, although hardware wallets have the option of sending coins.

  • Hardware wallet - a device specially designed for storing cryptocurrencies
  • An external device that serves as a wallet
  • Paper wallet

Note: In some wallets, it is possible to keep coins that are on one blockchain (Safex Wallet), and in some other wallets - many different coins (Trust, Exodus).

The most important is what is IN the wallet

In addition to private and public keys, wallets usually have seed phrases that can be used to restore the wallet. These seed phrases are a series of words that allow you to restore your wallet in case you lose your original wallet code. Therefore, always keep the keys and seed phrase safe for the case you need to restore your wallet and thus the funds in it. Generally speaking, each crypto wallet is slightly different and takes a little time to see all its options. They all function on a similar principle, and when you understand how one works, then using any other will not be a problem for you.

The basic crypto wallet performs two main functions:

1. Reads historical blockchain transaction records and notes all transactions for the user’s public address. This results in the wallet displaying:

  • Transaction history for the address
  • Balance of available funds

2. Creates transactions based on user input and sends those transactions to the blockchain for processing. For the vast majority of blockchains, this is limited to only sending coins from the user’s wallet to another wallet address.

Safex Wallet

In Safex Wallet, you can only store Safex coins: Safex Cash and Safex Tokens. The official Wallet release is a full-function cli wallet. The first GUI wallet available, called the Safex TWM Wallet, has been produced by Safex Market Inc, the first corporate entity to create a user-friendly marketplace interface on the Safex blockchain.

A community-developed wallet now also exists. Called the Safex Big Box Store wallet, it also has companion Store Front software that allows anyone, anywhere to independently list their goods for sale on the Safex Marketplace.

A Safex Wallet is not a regular crypto wallet. It has advanced options to perform, not just the regular send/receive coins functions, but also the staking/unstaking of Safex Tokens, plus the marketplace platform for buying and selling goods and services

For the Safex Blockchain, with its advanced marketplace protocol, the Safex Wallet is also capable of:

Per (1.) above, displaying:

  • Goods and services available for purchase
  • Price Peg information
  • Feedback/Rating
  • Staked SFT outputs
  • Accumulated revenue share awaiting collection for said Staked SFT outputs

Per (2.) above, the following additional transactions:

  • Create/Edit Safex (Merchant) Account
  • Create/Update Price Peg
  • List/Edit Goods or Services
  • Purchase Goods or Services
  • Provide Feedback on a previous Purchase
  • Stake/Unstake SFT

The wallet contents shown in a crypto wallet are merely a reflection of the blockchain history - the same wallet address can be restored onto multiple computers, and they will all show the same balances and transaction history. This is because the coins aren’t on the PC - they exist only on the blockchain. The crypto wallet is merely a representation of the blockchain history.

Novices often get the mistaken idea that their coins are on their PC, and they somehow need to move them when they get a new PC. This is wrong. If the user has followed good backup practices, they can simply restore the wallet address onto another PC via the wallet’s Restore functions.

Keep in mind:

  • Always remember your restored Safex Wallet password, and remember that your wallet file (and by default, your coins in the wallet address) is only as safe as the strength of the password, so use a strong password (21+ characters).
  • Always keep your Private Keys, Mnemonic Seed Phrase, and any exported wallet files in a safe place, if possible, in 2+ different locations.
  • Never share your private keys and seed phrases with anyone.