The digital currency world mimics in many aspects the physical paper money world. One of these aspects is the fact that your money is kept in a secure place, like your wallet.
Let’s say you got a few dollars change after buying a coffee in Starbucks. The natural thing to do with this change is to take your wallet out of your pocket, open it and store the currency in it.
You could also leave the change in your car for next time you stop at the gas station or at another starbucks.
Or you could take the cash home and place it in a shelf so your wife or kids can grab it anytime they need to buy something.
These situations are describing exactly what you could do with an ether wallet. You could have a wallet online and throw some money at it anytime you need to buy something., you could have a wallet in your computer, stored locally to save some ether money and use it whenever you need, you could have an offline wallet stored securely at home, so nobody can access it, you could share a wallet with your family and you could even have a paper wallet full of ether, completely off the digital world.
An ether wallet consists of two identification numbers:
Your account number, which is a long hex number like the following one: 0xbb9bc244d798123fde783fcc1c72d3bb8c189413 (That one is for the DAO wallet)
Your private access key, which is a even longer number like the following *totally fake* number: 7216fc44e1de2af9af5d173342eb4970c67f4297900aa59f875a9859909803ad95a3924a33fa72f4a804111152a8a8fa161e01acf77c665fcd3117b01d20528a
That’s it. There’s no need for digital storage, no need for a bank holding your money, no need for a complex system protected by passwords for you to “enter to your account”, nothing is needed! Just your account and private key numbers.
Now, let’s make two things clear so you can advance in this world without doing something really stupid:
- Your account number is public. You’ll share it with whoever you want, you’ll use it to transfer ether or receive ether from anybody. It will get logged in the ether chain ledger. Everybody will be able to see it!
- Your private key is private. You share this with the anyone and you’ll die poor! This is literally the key that opens your account and let you get the funds.
Come back with me to the real physical world for a minute: You have your wallet in your jeans, it is closed, securely stored, nobody has access to it. You will share the details of your wallet with everybody (is brown, leather, branded with a logo, etc) but you would never give the wallet wide open to anybody! The moment you do that, you’re giving them full access to the content and they can decide what to do with it for you.
So, to conclude, an ether wallet is exactly the same as a physical wallet. You can have as many as you want, and you can store as much money as you want. You can have one for work, one for personal expenses, one to share with your wife or husband, one for the kids or one stacked with cash and securely stored in a safe box in your house.
I hope this explanation gets you in the right track to start using your ether wallet. There are a few considerations and important technicalities you should now before creating a wallet for yourself, like creating an offline wallet, storing the numbers securely and not letting anybody to ever steal the private key, even at the moment of creating the wallet!
Read this article on how to securely create a new ether wallet.