Setting Up a Wallet & Basic Transactions

What is a Crypto Wallet? 

A cryptocurrency wallet is a tool that helps you manage your digital assets, like Bitcoin or Ethereum. Think of it as the equivalent of a physical wallet, but for your cryptocurrencies. Whether you want to buy, store or send digital money, having a wallet is essential. Understanding how to set one up and make basic transactions is your first step into the crypto world. 

There are two types of keys: 

• Public Key: This is like your bank account number. You can share it with people so they can send you cryptocurrency. 
• Private Key: This is like your password, which gives you control over your wallet and assets. It’s crucial to keep this secure and never share it with anyone, as anyone with your private key can access your funds. 

Types of Wallets 

There are different types of wallets that suit different needs: 

• Hot Wallets: These are wallets that are always connected to the internet, like mobile apps or web-based wallets. The majority of people use hot wallets to store small amounts of crypto that they wish to use due to the fact they’re more vulnerable to hacks than cold wallets. 
• Cold Wallets: These are wallets that store your keys offline, like hardware wallets (e.g., Ledger or Trezor) or even paper wallets. Cold wallets are considered safer by many because they are not exposed to online threats, making them a good choice for long-term storage. 

Setting Up a Wallet  

Setting up a wallet is generally straightforward:

1. Download a Wallet App or Purchase a Hardware Wallet: For hot wallets, download a wallet app online. For cold wallets, buy a hardware wallet from the official manufacturer.
   Note: For Ethereum-based chains, you can use wallets such as MetaMask, Rabby and TrustWallet. For Solana, you can use a wallet like Phantom. For Bitcoin, Xverse.  
   
   
2. Create a New Wallet and Backup: When creating a wallet, you'll be given a "seed phrase" (a series of random words). This phrase acts like a backup that can recover your wallet if you lose access. Write it down and store it safely—never share it with anyone.
   Remember, if you store it digitally, there’s always a chance it can get hacked. The best way to store a seed phrase is always the old-fashioned way... in physical form and locked away somewhere secure! 
   
   
3. Set Up Security Features: Most wallets will prompt you to set up a password and may offer extra security options like Multifactor Authentication.

Making Basic Transactions

Once your wallet is set up, you can start sending and receiving crypto. Here’s how: 

• Receiving Crypto: To receive crypto, you need your wallet address. You simply provide this address to the sender, and they can send you funds. This is usually found by clicking the “Receive” button on the wallet.
  
  

  Remember – NEVER send out your private key or seed phrase! Every wallet has a public 'Receive' address – this is the one you should be using to receive crypto too.

• Sending Crypto: To send crypto, enter the recipient’s wallet address and the amount you want to send in your wallet app. Be careful when entering the address—crypto transactions are irreversible, and a wrong address means the funds could be lost forever.
• Network Fees: When sending crypto, you'll notice a fee attached. This is a small payment to incentivise miners or validators to process your transaction on the blockchain. 

Common Wallet Features

Most wallets have some additional features: 

• Balance Checking: You can see the amount of cryptocurrency you hold, similar to checking your bank balance. 
• Transaction History: Wallets also keep a record of your transactions, so you can review all the amounts sent or received, including dates and times. 
• Security Alerts and Backups: Wallet apps often remind you to make backups of your keys and keep security settings updated. 

To Sum It Up 

A crypto wallet helps you store and manage your cryptocurrencies. Hot wallets are online and convenient, while cold wallets are offline.