Coinbase Extension

Discover a new level of crypto convenience with Coinbase Extension. Streamline portfolio management, track prices in real-time, and execute trades seamlessly – anytime, anywhere.

Choosing a reputable wallet to store crypto assets is extremely important when participating in the cryptocurrency market. Besides security, Coinbase Wallet is also an excellent choice for beginners, and here is the reason.

Cryptocurrency wallets are essential for buying, trading, and selling cryptocurrencies. Traders need them to store cryptocurrencies securely, as well as to protect and validate transaction information.

Be it hardware or software, also known as hot and cold crypto storage, custom crypto wallets offer traders specialized solutions compared to those from exchange’s electronic currency translation.

Specifically, the following article will share with you about Coinbase Wallet and how it works.

How it works

Coinbase Wallet uses BIP39, the industry standard, to generate a 12-word recovery phrase. This recovery phrase is the key to your wallet. Anyone with the recovery phrase can recreate your purse and take control of your crypto assets, so you should store it carefully.

In the background, a 12-word phrase associated with a private key (a long string of letters and numbers) allows you to control your wallet assets on the blockchain.

The wallet also uses the public key to generate the wallet address. Coinbase Wallet supports multiple networks (on mobile) and multiple accounts so that you can have multiple addresses.

All your Coinbase Wallet assets share the exact 12-word recovery phrase.

Coinbase Wallet is a hot wallet, meaning that the keys of the wallet are generated and stored on a device connected to the internet. You can connect your Ledger hardware wallet (cold wallet that generates offline private keys) to your Coinbase Wallet to further secure your assets. However, it would be best to do this with the new Coinbase Wallet using the Chrome extension.

When you send cryptocurrency or connect to a decentralized application, your wallet will ask permission to “sign” the transaction with your private key. Put, your wallet acts as a validator.