A Cryptocurrency wallet is a place that stores your digital Cryptocurrency and validates your transactions when you’re using your Cryptocurrency. A wallet keeps secret information, called a private key or a seed, which is used to validate transactions and “sign” them so that your Cryptocurrency can be used to make purchases or exchanged for another asset. This prevents someone else from using your Cryptocurrency or the transaction being altered by a third-party.
Often when people refer to a Cryptocurrency wallet they are referring to a crypto exchange that offers a wallet as part of their account features. In this sense, the wallet is just the place where all of your cryptocurrencies are kept, or where you can keep fiat money for future use.
A blockchain is a shared public ledger where all Cryptocurrency transactions are conducted, from Cryptocurrency wallets. When a transaction occurs, there is a transfer of value between more than one Cryptocurrency wallet. Typically, a single party is exchanging some value of Cryptocurrency for another asset or service with another Cryptocurrency wallet. When this occurs, every individual Cryptocurrency wallet will use its secret data to sign and validate transactions, providing a mathematical proof that the buyer or seller is the owner of their Cryptocurrency wallet. Your wallet can safely keep as much Cryptocurrency as you’d like without any limit.
Using a Cryptocurrency wallet doesn’t cost you anything if you’re just storing Cryptocurrency in the wallet. However, if you're completing a transaction, then the owner of the exchange or device that is housing your wallet will charge you various fees depending on what you're trying to do. Purchasing a wallet could cost you anywhere from $0 to $200 or more. If you're using a wallet as part of the exchange then you'll likely pay either a flat fee of a few dollars or a percentage of the total transaction value.
You can’t convert Cryptocurrency to cash directly whenever you feel like it, but you can sell your Cryptocurrency anonymously on the blockchain in exchange for the fiat currency you desire. A crypto exchange can handle the transaction on your behalf and find a buyer so that you can quickly convert the value of your Cryptocurrency into the cash you need. Every wallet has different rules and periods for transferring your fiat currency over to your bank account, but most can be done in 1 to 3 days after the Cryptocurrency sale is complete.
If you are sending an ERC-20 token (eg. USDC, DAI, BAT, and MKR, etc.): You will need ETH in your Cryptocurrency Wallet account to pay a miner's fee when sending this cryptocurrency. This is because ERC-20 tokens are issued on the Ethereum blockchain and transactions on the Ethereum network, such as sending ERC 20 tokens, require Ether. You can send cryptocurrency using a cryptocurrency address, Coinbase Wallet username.
