Crypto glossary
Crypto wallet
A crypto wallet is software or hardware that stores the keys to your cryptocurrency and lets you send, receive and manage digital assets.
Despite the name, a crypto wallet does not hold coins. The assets live on the blockchain; the wallet stores the private keys that authorize moving them and shows balances by reading the chain. It also generates addresses for receiving funds and signs the transactions you approve.
Wallets come in several forms: mobile and browser apps, desktop programs and dedicated hardware devices. Hot wallets stay connected to the internet and are convenient for frequent use, while cold wallets keep keys offline for long-term storage. Custodial wallets, such as an exchange account, hold the keys for you; non-custodial ones leave you in control.
The trade-off is between convenience and responsibility: with a non-custodial wallet nobody can freeze your funds, but nobody can restore them if you lose the seed phrase either.
Example
A user who installs a browser wallet such as MetaMask gets an Ethereum address and a 12-word seed phrase, and can then connect to decentralized apps to swap or lend tokens.
Related terms
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