When sending cryptocurrency to a friend, you are actually sending it to their blockchain address, not their wallet. While people often confuse these two terms, they serve different functions. A blockchain address is like a virtual location on the blockchain that determines where a transaction is sent. It’s created through asymmetric cryptography, which generates a public key and a private key. The public key is hashed to produce the blockchain address, while the private key remains confidential and allows the owner to control the funds associated with that address.
A wallet, on the other hand, doesn’t store cryptocurrency itself but rather manages the keys that allow access to funds on the blockchain. It can manage multiple addresses and retrieve balance information from the blockchain by querying the network.
This distinction between blockchain addresses and wallets is important for anyone using cryptocurrency. Many people mistakenly think that the wallet stores the cryptocurrency, but in reality, the wallet is just a tool for managing keys. Understanding this can help users avoid confusion and better secure their funds. Blockchain’s reliance on cryptography for security is impressive, but it also places the responsibility on users to protect their private keys.
Source: https://youtu.be/TBFYSRL8-oQ?si=Frit2fQMfL-FCUOB Show Less
