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Definition

A cryptocurrency storage and management system that is a combination of a software wallet (stored on your own computer) and a web wallet (stored on a third-party server).

The bulk of your digital currency account information is stored on the wallet host’s server, except for one important thing…your private key (the code that uniquely identifies you).

The private key is stored only on your own device.

When you make a transaction, your private key is encrypted on the way to the exchange’s server, so they never see it. This is an impressive security feature, but access to your private key also includes a password (that only you know).

If you lose or forget that password, access to your account could be denied, and you could potentially lose the money in your account forever.