Also known as your address. This is the address you enter when you want to send something to your wallet. It’s easy to find and is what you send to someone when you want them to send you something.

This key is generated with your public key. This is the most important key because it’s what’s used to send things from your wallet to another wallet. No one can take anything from your wallet without this key. If they have this key however, nothing can stop them from taking anything you want. At that point your only option is to send everything to another wallet before they can empty your wallet.

Your actual private key is a 256 digit long number. It’s not very practical for you to use. Lots of potential for mistakes, especially when moving from one wallet software to another for example. So whenever you first make your wallet, the software will also generate you your seed phrase. This is a 12, 18 or 24 word combination derived from your private key. It is essentially your private key. These words are chosen from a list of 2048 words. This is what allows you to “move” your wallet from software to another. You enter your seed phrase and the wallet uses that to derive and store your private key. So whether it's your private key or the seed phrase, keep it hidden because whoever owns that, owns your wallet.

Custodial wallets are when someone else has custody of your private key. Non-Custodial custodial wallets are where no one else has custody of your private keys. You do. The easiest way to know is if when you make your account, you’re given your private key or a seed phrase.

Usually exchanges like Binance, Coinbase or Kraken will have custodial wallets. Meaning when you make your account, you pick a username and password, and when you sign in you’ll see your public key (your address) but you won’t have access to the private key for the wallet. There are benefits to this in that you can’t really lose access since you can talk to customer support to request a new password, etc. The danger is of course that if the exchange gets hacked, it’s possible to lose your funds. Also, the company can choose to freeze accounts and there isn’t anything you can do about it.

This goes against one of the central tenets of blockchain technology which is that there shouldn’t be any central entity in control. Everyone should be in control of their own funds. This isn’t true with custodial wallets but is true with non-custodial wallets. However, that doesn’t mean non-custodial wallets are safe. They are safer than custodial wallets but it’s still possible that someone steals your private key.

In terms of safety, custodial wallets used by exchanges are at the bottom. You really only keep funds here when you want to exchange funds from one chain to another that isn’t connected. Like Bitcoin and Ethereum for example. Or if you want to withdraw to a fiat like USD or Euros. You don’t want to store too many funds in your exchange wallet.

When you use a wallet software, you have what’s called a hot wallet. There are many hot wallets out there. Metamask is the most popular for Ethereum. Ledger and Tezos are probably two of the most popular blockchain wallets. That’s because they offer both a hot wallet and cold storage. Hot wallets are better than exchange wallets but Cold Storage is the standard when it comes to security.

Cold Storage is what we call the little USB looking things that Ledger and Tezos sell. I personally use ledger but they’re both great from what I hear.

The reason they are called cold storage is because the private keys never leave the device. Whenever you want to make any transaction from cold storage, the device has to be connected to your computer and you have to click submit on the device itself. Hot wallets exist on your computer and so there is always a chance that someone installs spyware on your computer, or a keyboard logger. The private keys are connected to the internet at some point and so are “hot.”

With cold storage, unless the person has the physical device, they cannot steal anything from your wallet, due to how the keys are stored. If you lose the device or it gets destroyed, you can still recover your account by getting a new wallet and entering your seed phrase, which will generate the private key and address. So even with a cold storage, your private key/seed phrase is still the most important thing when it comes to security. (Which is why it’s recommended to write them down on a piece of paper, not on the computer. Some companies sell metal plates you can write them on.)

If you have any crypto assets, whether it’s tokens or NTFs, you want to keep them in cold storage and only move them to a hot wallet when you plan to sell or exchange them. Think of cold storage like your bank account, except you have full control. Your hot wallet is like the wallet you keep in your pocket. You keep your “spending money” there.

Also it’s important to consider what blockchain the address your sending or receiving to is on. If you send Ethereum to a Bitcoin address, the transaction obviously won’t work. You’ll probably lose your funds too. So it’s very important to double check the address. Try sending a small amount first to verify, before sending the full amount.

This is especially important when you consider layers. Loopring or Immutable are two examples of layer 2 chains on Ethereum. So the address will be the same between both layers. So if you accidentally send funds on layer 2, but the other wallet hasn’t activated it’s layer 2 account, it’s also possible you might lose the funds. Again, a small test amount will ensure you don’t mess this up.

Also known as your address. This is the address you enter when you want to send something to your wallet. It’s easy to find and is what you send to someone when you want them to send you something.

This key is generated with your public key. This is the most important key because it’s what’s used to send things from your wallet to another wallet. No one can take anything from your wallet without this key. If they have this key however, nothing can stop them from taking anything you want. At that point your only option is to send everything to another wallet before they can empty your wallet.

Your actual private key is a 256 digit long number. It’s not very practical for you to use. Lots of potential for mistakes, especially when moving from one wallet software to another for example. So whenever you first make your wallet, the software will also generate you your seed phrase. This is a 12, 18 or 24 word combination derived from your private key. It is essentially your private key. These words are chosen from a list of 2048 words. This is what allows you to “move” your wallet from software to another. You enter your seed phrase and the wallet uses that to derive and store your private key. So whether it's your private key or the seed phrase, keep it hidden because whoever owns that, owns your wallet.

Custodial wallets are when someone else has custody of your private key. Non-Custodial custodial wallets are where no one else has custody of your private keys. You do. The easiest way to know is if when you make your account, you’re given your private key or a seed phrase.

Usually exchanges like Binance, Coinbase or Kraken will have custodial wallets. Meaning when you make your account, you pick a username and password, and when you sign in you’ll see your public key (your address) but you won’t have access to the private key for the wallet. There are benefits to this in that you can’t really lose access since you can talk to customer support to request a new password, etc. The danger is of course that if the exchange gets hacked, it’s possible to lose your funds. Also, the company can choose to freeze accounts and there isn’t anything you can do about it.

This goes against one of the central tenets of blockchain technology which is that there shouldn’t be any central entity in control. Everyone should be in control of their own funds. This isn’t true with custodial wallets but is true with non-custodial wallets. However, that doesn’t mean non-custodial wallets are safe. They are safer than custodial wallets but it’s still possible that someone steals your private key.

In terms of safety, custodial wallets used by exchanges are at the bottom. You really only keep funds here when you want to exchange funds from one chain to another that isn’t connected. Like Bitcoin and Ethereum for example. Or if you want to withdraw to a fiat like USD or Euros. You don’t want to store too many funds in your exchange wallet.

When you use a wallet software, you have what’s called a hot wallet. There are many hot wallets out there. Metamask is the most popular for Ethereum. Ledger and Tezos are probably two of the most popular blockchain wallets. That’s because they offer both a hot wallet and cold storage. Hot wallets are better than exchange wallets but Cold Storage is the standard when it comes to security.

Cold Storage is what we call the little USB looking things that Ledger and Tezos sell. I personally use ledger but they’re both great from what I hear.

The reason they are called cold storage is because the private keys never leave the device. Whenever you want to make any transaction from cold storage, the device has to be connected to your computer and you have to click submit on the device itself. Hot wallets exist on your computer and so there is always a chance that someone installs spyware on your computer, or a keyboard logger. The private keys are connected to the internet at some point and so are “hot.”

With cold storage, unless the person has the physical device, they cannot steal anything from your wallet, due to how the keys are stored. If you lose the device or it gets destroyed, you can still recover your account by getting a new wallet and entering your seed phrase, which will generate the private key and address. So even with a cold storage, your private key/seed phrase is still the most important thing when it comes to security. (Which is why it’s recommended to write them down on a piece of paper, not on the computer. Some companies sell metal plates you can write them on.)

If you have any crypto assets, whether it’s tokens or NTFs, you want to keep them in cold storage and only move them to a hot wallet when you plan to sell or exchange them. Think of cold storage like your bank account, except you have full control. Your hot wallet is like the wallet you keep in your pocket. You keep your “spending money” there.

Also it’s important to consider what blockchain the address your sending or receiving to is on. If you send Ethereum to a Bitcoin address, the transaction obviously won’t work. You’ll probably lose your funds too. So it’s very important to double check the address. Try sending a small amount first to verify, before sending the full amount.

This is especially important when you consider layers. Loopring or Immutable are two examples of layer 2 chains on Ethereum. So the address will be the same between both layers. So if you accidentally send funds on layer 2, but the other wallet hasn’t activated it’s layer 2 account, it’s also possible you might lose the funds. Again, a small test amount will ensure you don’t mess this up.