Now more and more people begin to participate in the blockchain project. People who know and participate in it believe that they will all use the blockchain wallet. The "wallet" here refers to a virtual tool for storing and using virtual currency.

wallets are mainly divided into cold wallets and hot wallets, which include private keys, public keys and auxiliary words. Next, I will explain their differences and functions in detail.

cold wallet: a cold wallet refers to a wallet that is not connected to the internet and stores digital currency offline. Users generate digital currency address and private key on an offline wallet, and then save them. The cold wallet integrates the functions of digital currency storage, multiple transaction password setting, publishing the latest market and information, and providing hard fork solutions, which can effectively prevent hackers from stealing.

hot wallet: a hot wallet refers to a wallet that needs to be used online, which is more convenient to use. However, the network is complicated and there are many phishing websites, which is risky. Therefore, when using wallets or exchanges, it is best to set different passwords and turn on secondary authentication to ensure the safety of your assets.

in summary, a cold wallet is safer than a hot wallet.

private key: a private key is a string of data generated by a random algorithm. It can calculate the public key through an asymmetric encryption algorithm, and the public key can then calculate the address of the currency. The private key is very important. As a password, it is hidden except the owner of the address. Blockchain assets are actually on the blockchain, and the owner actually only owns the private key, and has absolute control over the assets of the blockchain through the private key. Therefore, the core issue of blockchain asset security lies in the storage of the private key, and the owner needs to keep it safe. Compared with the traditional user name and password, the biggest advantage of using public key and private key transaction is to improve the security and integrity of data transmission. Because of their corresponding relationship, users basically don't have to worry about the possibility of data being intercepted or modified by hackers in the process of transmission. At the same time, because the private key encryption must be decrypted by the public key it generates, the sender does not have to worry about the data being forged by others.

public key: the public key appears in pairs with the private key, which forms a key pair together with the private key and is stored in the wallet. The public key is generated by the private key, but the private key cannot be obtained by backward calculation of the public key. The public key can get the address of the wallet through a series of algorithms, so it can be used as a certificate to own the wallet address.

mnemonics: mnemonics are used to convert private keys into more than ten common English words by using a fixed algorithm. The mnemonic and the private key are interoperable and can be converted to each other. It is only a friendly format for the private key of the blockchain digital wallet.

Keystore: it is mainly common in the Ethereum wallet App (bitcoin is similar to the Ethereum Keystore mechanism: BIP38). It is obtained by encrypting the private key through the wallet password. Unlike mnemonics, it can generally be saved as text or JSON format. In other words, the Keystore needs to be decrypted with the wallet password before it is equivalent to the private key. Therefore, the Keystore needs to be used with the wallet password to import the wallet. When a hacker steals the Keystore, it is possible to unlock the Keystore by violently cracking the Keystore password without a password. Therefore, users are advised to set the password slightly more complicated, such as bringing special characters, at least 8 digits, and storing them safely.

To sum up, the function of wallet is to protect our private key, and the private key is the full authority to control assets. Only those who have the private key can use the virtual currency in this account. Remember not to disclose your wallet's private key, mnemonics, Keystore and other information to others when using your wallet. These information are important information that can directly steal your digital assets.

Precautions for using wallet:

1. Make a backup of private key and mnemonic words, except for writing a copy on your mobile phone.

2. Don't click on unknown websites easily.

3. Don't take screenshots or take photos to save.

in short, the most important thing is to keep your private key.