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Online wallet
In this guide
Quick definition
Copy link to sectionAn online wallet is a way of storing and accessing your cryptocurrency on the internet.
Key details
Copy link to section- Online wallets allow you to manage your crypto holdings online
- Many online wallets are easy to access and are available as part of a cryptocurrency exchange account
- Online wallets are the least secure type of crypto wallet, particularly if you don’t control your own private keys
What is an online crypto wallet?
Copy link to sectionAn online wallet is like an online banking portal for cryptocurrency. Like online banking, you can log on with your password and carry out transactions, see your balance, and look at your transaction history on the website of your wallet provider.
In other words, it’s a wallet that runs on your browser, just like a website. Online wallets are regarded as more vulnerable to hacks than other types of wallet, but they are very convenient as you can access your wallet anywhere as long as you have an internet connection.
How do online crypto wallets work?
Copy link to sectionWeb wallets are designed to be very user-friendly. You begin by signing up with your preferred provider, which is simple and quick. You will then access your account with a username and password. Sending or receiving crypto is easy because all you need is your wallet address (for receiving money) and the address you want to send cryptocurrency to (for transferring out).
Can online wallets be connected to crypto exchanges?
Copy link to sectionIn some cases, online wallets are exchanges. If you use an option such as Coinbase, you can not only store your coins but also buy and trade other cryptocurrencies that are then automatically held in the wallet. Other online wallets that hold multiple currencies will often allow you to transfer between different cryptocurrencies within the wallet.
Can I back up an online wallet?
Copy link to sectionYes, but exactly how will depend on your chosen platform. As a web wallet is like an online account, each company will have security features that allow you to gain access in case you forget your password. Wallets such as Blockchain allow you to set up your recovery seed and enter the 12-word recovery phrase when you lose your password in order to create a new wallet with your balance.
Others such as Coinbase have an option for resetting your password, where you get an email with a link to set up a new password. Just to be safe, its better you write down your password somewhere and keep it safe in case you ever forget it.
Are online wallets free?
Copy link to sectionYes, online wallets are typically free. All you need to do is choose your preferred provider, sign up, and start using your wallet. However, there’s a small transaction fee charged when you send crypto from your wallet to someone else’s. These transaction fees are to pay the miners or stakers who verify the movement of cryptocurrency on a blockchain.