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What’s in a wallet?

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The wallet is where everything begins as far as your cryptocurrency is concerned. When you create a wallet file, the wallet software will create a private key. That private key is used to create a public key, and the public key is used to create an address. The address has never before existed in the blockchain and still doesn’t exist in the blockchain yet.

After you have an address, you have a way to store cryptocurrency. You can give the address to someone from whom you’re buying cryptocurrency or an exchange, for example, and they can send the cryptocurrency to that address — in other words, they send a message to the blockchain saying “Send x amount of crypto to address x.” Now the address exists in the blockchain, and it has cryptocurrency associated with it.

A wallet program is a messaging program that stores your keys and addresses in a wallet file. The wallet program does these primary things:

 It retrieves data from the blockchain about your transactions and balance.

 It sends messages to the blockchain transferring your crypto from your addresses to other addresses, such as when you make a purchase using your cryptocurrency.

 It creates addresses you can give to other people when they need to send cryptocurrency to you.

Cryptocurrency Mining For Dummies

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