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What is a Wallet?

A wallet is a tool to give you access to your IOTA tokens. One very important fact that you need to understand directly from the beginning is this: your IOTA tokens are never stored INSIDE a wallet.

This is a common misunderstanding. All your IOTA's are only existing in the Tangle network and they cannot leave this network, so you are not “storing” them physically “inside” anything.

A wallet is a tool to access, transfer and manipulate your tokens on the IOTA network. It gives you a comfortable solution to store your secret keys and use them in the network to control your tokens.

The wallet knows the private key and the public key of your SEED. With this two cryptographic informations, a wallet can access the addresses of all your tokens on the network and has full control over all functions of the ledger. The wallet takes care of securely storing this important information for you. But if you would lose access to the wallet you would lose access to this information, so it is essential that you always have proper backups of these secrets stored in a safe location.

Think of a wallet more like a browser that knows exactly the place where your tokens sit in the huge IOTA network and that makes it possible for you to control them. But again, never forget - the tokens are always and only on the Tangle and never in your wallet. In Crypto, we divide those wallets into two categories:

  • Software Wallets
  • Hardware Wallets

Software Wallets#

A Software Wallet is a computer program that is executed in the operating system of your device (computer / mobile phone). It has no representation in a physical device and the program code is not written (hard-coded) into a computer chip. Software wallets are user-friendly and therefore a very common way to handle your tokens. They usually need a short setup process where you once enter your secret Seed and then afterward will never have to enter this complicated list of words or characters again. You log in to the software wallet with a password that you create and have access to your tokens. You can send and receive tokens now easily and comfortably.

But as software wallets are part of your operating system, the security of a software wallet can always be only as good as the security of the whole operating system. So you need to make sure that your operating system is free of malicious software, otherwise, it will be easy for an attacker to get access to your secrets and so to your tokens. Always have an up-to-date system, run quality Antivirus and Anti - Malware programs and follow best practices for cybersecurity if you use a software wallet to handle your IOTA tokens.

The IOTA Foundation has developed a software Wallet that follows the highest standards possible to keep your secrets safe. Read everything about the Firefly Wallet here:

Firefly Wallet

And download the Firefly Wallet here:

Firefly - official website

Hardware Wallets#

Hardware Wallets are physical devices that are solely constructed to handle the secret information (Seeds, private keys) of your tokens. They use cryptographic technics and software coded into the chips of the device to hide and never reveal these secrets to the outside world. The big advantage of those devices is that they are not part of your normal computer operating system. And not even part of the physical hardware of the devices that you use for your normal daily use cases, like browsing the internet or using all kinds of software. This makes them an encapsulated safe vault which’s only purpose is to protect your crypto secrets.

Only when you have the intention to do something with your tokens, you need to establish a connection between this hardware wallet and the IOTA network where your tokens are. Usually, this connection is established by a software wallet that runs on your computer. For this purpose, you need to connect the hardware wallet to your computer (via cable / USB). This connection is extremely well protected and does never transfer secrets between hardware and software Wallet. The user of the hardware wallet establishes a connection to the software wallet, and the software wallet establishes the connection to the IOTA network.

Through clever cryptographic concepts, the user can now interact with the IOTA network, without the possibility that malicious software stored on the computer of the user having a connection or access to the secrets that are stored on the hardware wallet. So it adds a second wall of security that keeps the secrets outside of the reach of the potentially infected user computer.

A hardware wallet is therefore the most secure way to keep your secrets safe, but it adds a layer of complexity to the use of your Crypto on top of what a software wallet provides.

IOTA supports currently the use of the Ledger Nano hardware wallets.

Read how to use it here.

Purchase a Ledger only directly from the official store:

Ledger Hardware Wallets - official Ledger website




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