Glossary
Crypto wallet
A crypto wallet is an app, device or service that stores the private keys controlling your cryptocurrency addresses, lets you see your balances and signs the transactions you send.
Also called Cryptocurrency wallet, Wallet, Digital wallet, Bitcoin wallet, Web3 wallet
See also
A crypto wallet is the tool you use to hold, send and receive cryptocurrency. Despite the name, it does not contain coins. Your coins always live on the blockchain; the wallet stores the secret private keys that prove you control them and uses those keys to sign transactions.
How a crypto wallet works
When you create a wallet, it generates a private key (or, more often, a seed phrase from which many keys are derived). From each private key it computes a public key and then an address, the string you share to receive funds. To send coins, the wallet builds a transaction, signs it with the private key and broadcasts it to the network. Nodes check the signature without ever seeing the key.
The main types of wallets
- Custodial wallets: an exchange or app holds the keys for you. Easy to use, but you depend on that company.
- Non-custodial software wallets: mobile, desktop or browser apps such as MetaMask or Phantom, where you hold the keys.
- Hardware wallets: small devices such as Ledger or Trezor that keep keys offline and sign transactions inside the device.
- Paper or metal backups: not wallets in themselves, but a way to store the seed phrase offline.
Software wallets connected to the internet are called hot wallets; devices that keep keys offline are cold wallets.
A concrete example
Sam installs a non-custodial wallet app, writes down the 12-word recovery phrase on paper and buys $200 of ETH on an exchange. He withdraws the ETH to the address shown in his app. If his phone breaks, he can install the app on a new phone, type the 12 words and see his ETH again, because the funds were never on the phone.
Why it matters for users
The type of wallet decides who really controls your crypto. With a custodial wallet, you hold a claim on a company. With a non-custodial wallet, you hold the asset itself, along with full responsibility for its security.
Risks and good practice
Anyone who gets your keys or seed phrase can empty the wallet, and there is no customer service to reverse the theft. Download wallets only from official sources, never share your recovery phrase, and check the receiving address before every transfer. Our guide Crypto wallets explained compares the options in detail.