Introduction
Cryptocurrency wallets use specialized terminology to describe their functionality. Understanding these terms—wallet, accounts, and addresses—is crucial for managing digital assets securely. This guide builds on our previous discussion about Seed, PIN, and Passphrases, explaining how these components interact within your hardware wallet.
Wallet: Your Cryptocurrency Hub
A wallet is the foundation of your crypto holdings. Think of it like a physical wallet:
- Multi-currency support: Stores Bitcoin, Ethereum, Litecoin, and more.
- Seed-derived: Generated from a single Recovery Seed (one seed = one wallet).
- Passphrase options: Optional passphrases create separate, isolated wallets for enhanced security.
💡 Pro Tip: Using a passphrase? Remember: both the seed and passphrase are required to recover funds.
Accounts: Organizing Your Currencies
Each wallet contains accounts—similar to bank accounts:
- 10-account limit per currency (e.g., 10 Bitcoin SegWit accounts).
- Independent balances: Transactions in Account A don’t affect Account B.
- Bitcoin variations: Supports Taproot, SegWit, and Legacy account types.
👉 Ethereum Difference: ETH uses single-address accounts (no change addresses). Learn more about Ethereum wallets.
Addresses: Transaction Privacy Tools
Bitcoin & Similar Blockchains
- Multiple addresses per account improve privacy.
- Change addresses: Automatically receive leftover funds from transactions.
- XPUB caution: Sharing an account’s extended public key exposes all linked addresses.
Ethereum & ERC-20 Tokens
- One address = one account.
- ERC-20 requirement: Always hold ETH in the same address as tokens for transfers.
FAQ Section
Q: How many wallets can a Trezor hold?
A: One per seed, but passphrases create additional wallets.
Q: Can I merge funds from two Bitcoin accounts?
A: No—accounts are independent.
Q: Why does Ethereum lack change addresses?
A: ETH’s design treats each address as a standalone account.
Q: Is sharing my Bitcoin XPUB safe?
A: Avoid it—this reveals all addresses in an account.
Conclusion
Mastering wallet hierarchy (seed → wallet → accounts → addresses) ensures better security and organization. For advanced topics like address types, explore our Bitcoin Addresses Guide.
Trezor: The world’s most trusted hardware wallet, offering unmatched security since 2014.
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