What is a wallet?

In the context of cryptocurrencies, NFTs and the blockchain, the term "wallet" has one or two specific meanings beyond (but related to) the ordinary meaning of the word wallet as a container for currency, documents or provisions.

For the most part, a "wallet" in this context is what it sounds like - somewhere to store money or other assets.

Blockchain, tokens and accounts

A blockchain is a distributed ledger used to create an immutable record of transactions. With each change to the information detailing, for example, the transfer of a token, a new record (a block) is created and added to the chain, hence the term blockchain. Because a copy of the blockchain is held on every computer in the network (each referred to as a node), and because the previous information is never erased, only added to, it is very difficult to falsify or corrupt the record.

There are different blockchains with subtly different modes of operation. Two such blockchains are Ethereum and Polygon, used by pax.world for its land and PAXW token respectively.

When a digital asset is created (or "minted") in the form of an NFT - non-fungible token - or another type of (fungible) token such as cryptocurrency, what is happening is that a record of the creation or transfer of that token is being added to the blockchain.

When someone creates a new series of NFTs (such as pax.world's land NFTs) or a crypto token (such as the PAXW token), they do so by deploying a smart contract to the blockchain. A smart contract is a little bundle of computer code stating certain key information about the token including the name and total supply, as well as any specific parameters about its behaviour or transferability. When a token is transferred, what is really happening is that a block - a ledger entry - is being added to the blockchain linking the unique identity of the NFT (or a certain number of the fungible tokens out of a total supply) to the receiving account or address.

Accounts, addresses or wallets?

In the above scenario, one can talk almost interchangeably about the ownership of a token being transferred to a given account on the blockchain or to the address pertaining to that account. In reality, nothing is being tangibly transferred per se - the blockchain has simply been updated to say that that particular account/address now owns the digital asset - or one of the numbered supply of digital assets - detailed in the smart contract.

Anyone can have one or several accounts identified by an address - a short form of the public key to that account - which is paired with a private key which is what you use to identify yourself as the owner of the account. The address is a bit like a bank account number - it is the string of characters you provide in order to receive a transfer, without giving access to other parties to dip in and help themselves! The private key, by contrast, is a bit like your online banking password, known only to you, providing access to, and control over, the funds within.

As an example, here is the first ever Bitcoin address: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa

Where do wallets come in? We're getting to that!


Strictly speaking, a wallet is a means of accessing one or more accounts. This can take the form of a hardware wallet such as Ledger, online self-custodial wallets such as Metamask, or custodial wallets such as user accounts on an online exchange. These wallets are a way of storing the private keys for all the accounts you associate with them, with a single means of access for the whole lot. It's a little bit like putting several purses of gold into a safety deposit box.

Wallet ≠ Account?

While there is a technical difference between account, address (and public key), and wallet, these terms are used colloquially to mean more or less the same thing. In particular, people talk about wallet and wallet address when it might be more precise to refer to an account or account address being accessed by means of a wallet of one sort or another.

Wallets and pax.world

You will be asked to provide a "wallet address" or to "connect a wallet" in order to receive purchased land NFTs or PAXW tokens (or any other tokens or NFTs for that matter). The "wallet address", as mentioned above, is really the address of an account on the blockchain (Ethereum for land, Polygon for PAXW), which you may well access or provide using a wallet such as Metamask.

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