In the case of a hosted wallet, the wallet hosting company stores your cryptocurrency on its servers for you. When you withdraw the crypto by sending it to another wallet, the company holding your funds is the one actually making the transaction.
Personal Cryptocurrency Wallets
A personal wallet is software that you run locally. You can have a cryptocurrency wallet on your phone, laptop, or desktop PC. When you install a personal wallet, it creates a private key that provides proof that you own the cryptocurrency stored in the wallet.
This private key also gives a user the ability to withdraw, or spend, said cryptocurrency. You don’t own Bitcoin, you own the private keys needed to spend the coin associated with them.
What Exactly is Blockchain Technology?
Bitcoin, Litecoin, Etherum, and just about every other cryptocurrency relies on something called Blockchain Technology.
Blockchain technology is a distributed, decentralized ledger that records the digital assets and makes cryptocurrencies possible.