Blockchain data can be freely read by anybody with the right tool, usually a web app written by a developer.
But in order to make a change to blockchain data such as sending funds to someone or minting an NFT, you need to send a "transaction" to the blockchain.
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A "transaction" (Tx) is an action that changes blockchain data. It has four primary components:
1⃣ What the Tx will do? (ex: transfer funds)
2⃣ Information needed for the Tx? (ex: amount, recipient)
3⃣ Tx fees (aka "gas")
4⃣ Authorization for the Tx via a digital signature
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A digital signature here isn't just your scribbled signature in picture form. It specifically means using cryptographic techniques to create a sealed digital envelope that mathematically proves that "you" approved the Tx.
The "you" in this case is not you, the person.
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"You" really means someone or something in possession of a special piece of information called a "private key"
The private key is a secret piece of information associated with your blockchain account that is used by a special tool to digitally sign the sealed Tx envelope.
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The commonly used name for the special tool that is used to sign the sealed Tx envelope is...
🎉 Wallet 🎉
In a nutshell, a crypto Wallet is a tool used to manage a list of accounts and their private keys that are necessary to sign blockchain transactions.
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You're probably thinking, "But wait, Nik. That doesn't sound right. My crypto Wallet contains my BTC, ETH, NFTs, Doge 😜. Your definition of Wallet doesn't mention how my crypto is stored in it. What gives?"
That friends, is the biggest misconception about crypto Wallets.
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Repeat after me — crypto Wallets do NOT contain any crypto assets. No coins. No tokens. No NFTs.
Crypto Wallets are a tool to manage your accounts and private keys — that's it.
Your crypto assets are ALWAYS data entries on the blockchain ledger, not in your crypto Wallet
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This means you can use any number and type of crypto Wallets to transact for an account whose private key you know, and it will work swimmingly.
Your cryptocurrency — not in your Wallet
Your tokens — not in your Wallet
Your NFTs — not in your Wallet
So where are they?
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Your crypto assets are actually just blockchain data:
Coins you own — an entry for your account in the ledger of the blockchain on which that Coin is a native cryptocurrency
Tokens and NFTs you own — an entry for your account in the Smart Contract that issued the token
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Summary:
A crypto Wallet is a tool used to manage blockchain accounts and associated private keys.
Crypto assets are never in a Wallet, they always remain on the blockchain.
You can use multiple Wallets for the same account — just the UI will be different not the data.
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I hope you found this thread useful. If so, please Like, RT and Follow.
Here's a video with more information about crypto Wallets
https://t.co/wfzEIVyUkQ 🧵/12